Taiwan took a major step forward a year ago in protecting intellectual property rights when legislators passed a law to establish a “Patent Linkage” system for safeguarding patents on pharmaceuticals.

Distressingly, the government now appears to be preparing to take a big step backward by limiting the coverage of that law. Rules being proposed by the Ministry of Health and Welfare for implementing the legislation would be restricted to protecting patents of conventional drugs (derived from chemical sources) from infringement by generics.

While requiring biologic drugs (derived from biological sources) to register their patent information, the rules would do nothing to prevent “biosimilars” from infringing on the patents of biologics.

Emasculating the legislation in this way would be a huge blow to the industry. Within just a few years, biologics – which can include vaccines, blood products, and gene therapy – are expected to account for more than half of the worldwide pharmaceutical market.

Even more significantly, excluding biologics from the patent protection would be a major setback to Taiwan’s efforts to position itself as a tech-savvy, knowledge-based economy – especially in the growing field of biomedicine, a key piece of the Tsai administration’s “5+2 Innovative Industry” strategy.

The Patent Linkage system alerts manufacturers of patented drugs about a generic product that might enter the market before the patent on the original drug expires. The warning gives companies time to mount a legal defense for products they’ve spent millions researching, developing, and marketing.

For more than 10 years, AmCham Taipei – through the Taiwan White Paper and other channels – has urged Taiwan to implement Patent Linkage. The issue has also been a key item in U.S.-Taiwan trade talks. After the law was passed last December, Taiwanese leaders held it up as a great example of how the country values and protects intellectual property.

Now, if Taiwan becomes the first country in the world to adopt a Patent Linkage system while not protecting biologics, it would call that commitment to IP rights into serious question. Instead of Taiwan becoming a regional leader in the biomedical sector as it has envisioned, its competitiveness would be put at risk, not only as a base for international companies but also for its own innovative enterprises.

Pressure to limit the Patent Linkage coverage has come from the domestic drug industry. But that stance is short-sighted. Without a steady stream of biologic drugs entering the market, the opportunity will be reduced for future development of “biosimilars” – less costly imitations of biologics that are different from generics in that they’re not exact copies.

AmCham Taipei has been one of numerous business organizations that have strongly urged the Taiwan authorities to reverse course. That message has come not only from the other major international chambers of commerce in Taiwan, but also from:

• PhRMA (Pharmaceutical Research and Manufacturers of America)
• The U.S.-based Biotechnology Innovation Organization (BIO)
• Japan Pharmaceutical Manufacturers Association
• International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) headquartered in Switzerland.

After more than 10 years of fighting for Patent Linkage – and having celebrated what last year appeared to be a significant step forward – AmCham Taipei appeals to the Taiwan authorities to stay on the right path of ensuring full and fair IPR protection. Don’t squander the widespread international goodwill that Taiwan gained a year ago with passage of Patent Linkage.