Celebrating the Start of Patent Linkage

Taiwan’s establishment of a well-formulated Patent Linkage system for pharmaceuticals is a landmark development not only for the drug industry but for this country’s intellectual property rights protection in general. In addition, it boosts Taiwan’s status in the global trading community and improves its prospects for eventually concluding bilateral or multilateral free trade agreements with other countries.

The necessary revision to the Pharmaceutical Affairs Act to accommodate Patent Linkage was passed by the Legislative Yuan on December 29, 2017, and the implementation rules drafted by the Taiwan Food and Drug Administration (TFDA) of the Ministry of Health and Welfare went into force on August 20 this year.

After many years of discussion and preparation, Taiwan can be proud of having an effective Patent Linkage mechanism in place. The new system, which is quite similar but not identical to the U.S. model, is designed to safeguard the rights of patent-holders of original drugs – thus encouraging investment in R&D to develop new medications – while providing a stable and predictable legal environment that also benefits manufacturers of generic drugs.

Patent-law specialist Lee Su-Hua, associate professor of law at National Taiwan University, hails the passage of Patent Linkage as ushering in a “new era with new opportunities for Taiwan’s pharmaceutical industry.” Considering the relatively small size of Taiwan’s domestic market, local drug companies will have little choice but to look to international markets to help support their growth. “Now, after they have familiarized themselves with the mechanics of Patent Linkage in Taiwan,” Lee says, “it will be much easier for them to enter the market in the U.S., South Korea, Singapore, Australia and other countries where Patent Linkage is applied.”

Lee, who led the research team that helped the TFDA draft the Patent Linkage amendment bill, stresses that for the local industry to “grow up and be competitive,” it is crucial for them to pay more attention to patent rights than they have in the past. She notes that while some local manufacturers strongly opposed the Patent Linkage bill, “there is another group that is engaged in trying to develop innovative products and so consider that Patent Linkage is important to them, as they hope to be among the brand-name companies in the future.”

The content of the implementation rules also became a matter of controversy. In particular, some scholars and members of the local industry argued that the Patent Linkage provisions should not be extended to cover “large molecule” drugs known as biosimilars – roughly the equivalent of a generic for a drug derived from a biological rather than chemical source.

Lee commends the TFDA for taking those arguments into due consideration, but in the end opting to include biosimilars in the system. “For me, it’s not a real issue,” she says. “So far the local industry doesn’t really have the ability to launch biosimilar drugs.” At the same time, she doesn’t see Patent Linkage as a serious impediment to Taiwan developing a biosimilar industry sometime in the future.

Another reason put forward against the inclusion of biosimilars was that they are not covered in the Patent Linkage system operating in the U.S. But biosimilars do receive patent protection in the U.S., although under a more complicated mechanism known as the “patent dance.” That route was regarded as necessary because the Patent Linkage system was already in existence in the U.S. when the first biologic drugs came onto the market. The same need is not present in Taiwan when a Patent Linkage system can be introduced to encompass all drugs.

An additional argument posed by Patent Linkage detractors is that the amendment to the Pharmaceutical Affairs Act should be supported by revision to the Patent Law in order to be binding. In Taiwan an amendment to the Patent Law drafted by the Taiwan Intellectual Property Office is still before the Legislative Yuan, and it is uncertain whether it will come to a vote in the current session, which means it would have to be resubmitted next year.

“It would be nice to have the Patent Law amendment passed, but it is hardly necessary since amendment to the Pharmaceutical Affairs Act is sufficient for Patent Linkage to be valid,” Lee says. “By way of comparison, Singapore did not amend their patent laws, and Patent Linkage is working there.”

Bringing Patent Linkage to Taiwan has been an effort of more than a decade. “It’s a very challenging and complicated subject, but the outcome should be quite valuable for Taiwan,” Lee says. “It potentially opens a world of possibilities for our companies.”

For more information, please contact:
International Research-based Pharmaceutical Manufacturers Association (IRPMA)

9F-8, 188 Nanjing E. Rd., Sec. 5, Taipei 10571, Taiwan
Tel: +886-2-2767-5661             Fax: +886-2-2746-8575