China's Pharmaceutical Patent Term Extension Cases Reveal New Landscape for Innovative Drug Protection

Authors:

• Aden Chen (Partner, Lawjay Partners, an associated law firm with Bird & Bird)
• Zheng Lu (Associate, Lawjay Partners, an associated law firm with Bird & Bird)

China's Pharmaceutical Patent Term Extension Cases Reveal New Landscape for Innovative Drug Protection

On 1 June 2021, China's newly revised Patent Law officially took effect, introducing Pharmaceutical Patent Term Extension (PTE) provisions that have garnered significant attention from the pharmaceutical industry. PTE is designed to compensate for time lost during the regulatory review and approval process for new drugs, effectively "reclaiming" portions of the patent protection period for innovative pharmaceutical companies. After three years of developing supporting regulations, PTE demonstrated its practical impact in 2024. To date, several landmark cases have been approved across three major categories—chemical drugs, biological drugs, and traditional Chinese medicine—with compensation periods ranging from 36 days to five years. This development marks China's entry into a new era of pharmaceutical intellectual property protection.

Development of PTE in China

China's pharmaceutical patent protection system has evolved significantly over the decades, progressing from non-existence to a robust framework. The 1984 Patent Law initially restricted patent rights for pharmaceuticals; this restriction was lifted in 1992. Subsequently, clinical trial infringement exceptions and compulsory patent licensing provisions were introduced in 2008.

The cornerstone of the current system is Article 42, Paragraph 3 of the 2021 Patent Law, which states: "To compensate for the time taken by the review and approval process for new drugs, for invention patents related to new drugs that have obtained marketing authorisation in China, the patent administrative department of the State Council shall, upon the request of the patentee, grant compensation for the patent term. The compensation period shall not exceed five years, and the total valid patent term after the new drug is approved for marketing shall not exceed fourteen years."

On 21 December 2023, the China National Intellectual Property Administration (CNIPA) issued revised "Implementing Regulations of the Patent Law" and "Patent Examination Guidelines," which took effect on 20 January 2024, formally implementing the PTE framework.

Key Elements of China's PTE Regulations

According to the relevant regulations, China's PTE framework encompasses the following key components:

Scope of Application

PTE is limited to innovative drugs and certain improved new drugs, specifically:

• Chemical drugs: Class 2.1 (esters/salts of known active ingredients) and Class 2.4 (new indications)
• Therapeutic biological products: Class 2.2 (limited to new indications)
• Preventive biological products/vaccines: Class 2.2 (limited to improvements in vaccine strains)
• Traditional Chinese medicine: Class 2.3 (new indications)

Application Conditions

• The patentee must submit a PTE request within three months after the drug receives marketing approval
• Where a drug is protected by multiple patents, only one patent may be selected for PTE
• Where one patent protects multiple drugs, PTE may only be applied for based on one drug
• The patent application date must precede the drug marketing approval date

Compensation Period Calculation

The compensation framework follows these parameters:

• PTE period = China marketing approval date - Patent application date - 5 years
• Maximum PTE period ≤ 5 years
• Total valid patent term after marketing approval ≤ 14 years

International Comparison

Application Timing and Supporting Documentation

Timing Requirements

When applying for pharmaceutical patent term compensation, patentees must submit their request to the Patent Office and pay corresponding fees within three months from the date the pharmaceutical product obtains marketing authorisation in China. For pharmaceutical products granted conditional marketing authorisation, the request must be submitted within three months from obtaining formal marketing authorisation, although the compensation period calculation is based on the conditional marketing authorisation date.

Required Supporting Materials

Applications must include: the request form, drug registration certificate, drug labelling, and a comparison table between the patent claims and the new drug's technical solution features. Where the patentee and the holder of the drug marketing authorisation are different entities, written consent must be submitted.

Recent Approved PTE Cases

1. Risdiplam for Oral Solution Powder

On 22 November 2024, CNIPA approved PTE for compound patent ZL201580027306.9, granting a compensation period of 36 days. The patent's original expiration date was extended from 11 May 2035 to 16 June 2035.

This represents the first small-molecule chemical drug to receive PTE approval. Risdiplam is used for treating spinal muscular atrophy (SMA) and is classified as a Category 1 chemical drug. The drug received marketing approval in China on 16 June 2021, with a patent application date of 11 May 2015.

2. Penpulimab Injection

On the same day, CNIPA approved PTE for antibody patent ZL201610705763.5, with a compensation period of 140 days. The patent's original expiration date was extended from 23 August 2036 to 10 January 2037.

This case represents the first biological drug to receive PTE approval. Penpulimab is used for treating various indications including lymphoma and lung cancer. The drug initially received conditional approval on 3 August 2021, with full approval granted on 10 January 2023 for the indication corresponding to this PTE.

3. Camrelizumab for Injection

On 3 March 2025, CNIPA approved the PTE request for antibody patent ZL201480011008.6, with a compensation period of 389 days. The patent's expiration date was extended from 14 November 2034 to 8 December 2035.

This currently represents the biological drug case with the longest compensation period. Camrelizumab has nine approved indications, including refractory classical Hodgkin lymphoma. This PTE likely corresponds to the seventh indication approved on 8 December 2021 for first-line treatment of oesophageal squamous cell carcinoma.

4. Shen'ge Bushen Capsules

On 17 December 2024, CNIPA approved the PTE request for composition patent ZL03156365.1, with a compensation period of 1,827 days (approximately five years). The patent's expiration date was extended from 5 September 2023 to 5 September 2028.

This represents the first traditional Chinese medicine to receive PTE and achieve "maximum term compensation." The product is used for treating mild to moderate depression and is classified as a Category 1 new traditional Chinese medicine drug. Marketing approval was granted on 29 December 2022.

Case Studies

1. Rongchang Bio's Telitacicept Achieves "Maximum Term Compensation"

In May 2025, Rongchang Bio announced receipt of the "Pharmaceutical Patent Term Compensation Approval Decision" from CNIPA, confirming that its core product, Telitacicept Injection, received patent compensation of 1,827 days, extending protection from 15 June 2027 to 15 June 2032.

This represents another case achieving "maximum term compensation" since implementation of China's new Patent Law in 2021. The 1,827-day patent compensation extends Telitacicept's market exclusivity from 2027 to 2032, effectively providing the company with an additional five-year patent life extension.

Telitacicept is the world's first dual-target (BLyS/APRIL) fusion protein new drug, indicated for autoimmune diseases such as systemic lupus erythematosus (SLE) and myasthenia gravis. The drug demonstrates strong competitiveness and significant growth potential in the global pharmaceutical market.

The patent term extension will deliver considerable economic benefits to Rongchang Bio whilst consolidating its market position and effectively preventing generic drug competition. Following health insurance coverage inclusion in 2023, sales volume surged 149% in 2024 (from 1.646 million to 4.105 million units), demonstrating the success of the "price-for-volume" strategy. According to available data, Telitacicept achieved revenue of 977 million yuan in 2024, representing a year-on-year increase of 94.87% and demonstrating strong market growth momentum.

2. Controversies in the Baricitinib Case

The Baricitinib case illustrates the complexities inherent in China's PTE implementation. This JAK inhibitor, developed by Incyte and globally licensed to Lilly, was first approved in China on 24 June 2019 for rheumatoid arthritis (Category 5.1 imported drug), with a new indication for alopecia areata (Category 2.4) approved on 27 March 2023.

On 13 June 2023, the patentee submitted a PTE request for compound patent ZL200980116857.7. However, on 4 July 2023, Nanjing Spark Pharmaceutical filed an invalidation request against the patent, and on 29 January 2024, CNIPA declared the patent entirely invalid.

This case raises a critical interpretative question regarding Article (2) of Section 3.1 Compensation Conditions: "At the time of filing the compensation request, the patent right shall be in a valid state." The meaning of "at the time of filing the compensation request" remains unclear—does this refer to the specific moment when the patent term compensation request is initially filed, or does it encompass the entire period from filing through completion of examination and approval?

This case highlights a crucial legal question: How should CNIPA handle PTE applications when patents are invalidated during the examination process? Should examination be suspended pending judicial outcomes, or should PTE be granted initially with the possibility of subsequent revocation? The current Patent Examination Guidelines do not provide clear guidance, necessitating further regulatory clarification or case law development.

Impact and Future Prospects

Whilst pharmaceutical PTE protects incentives for innovative drug research and development, it may also increase patient burden by delaying generic drug market entry. To address this concern, relevant regulations specify important limitations: only patents that have not previously received compensation may apply for extension; for drugs involving multiple patents, only one may be extended; and for single patents covering multiple drugs, extension may only be applied for based on one drug. These provisions prevent innovative pharmaceutical companies from obtaining repeated patent term extensions and avoid excessive protection period extensions, thereby balancing innovation incentives with drug accessibility.

The implementation of China's pharmaceutical PTE marks the country's entry into a new stage of pharmaceutical intellectual property protection. By compensating for time lost during the regulatory review and approval process, PTE effectively incentivises pharmaceutical companies to invest in innovative research and development, supporting China's transformation from a "generic drug powerhouse" to an "innovative drug leader."

As additional cases emerge and relevant regulations continue to evolve, PTE will play an increasingly important role in balancing innovation protection with public interests, providing a solid foundation for innovative development within China's pharmaceutical industry. Looking forward, we anticipate seeing more innovative pharmaceutical companies utilise PTE to bring high-quality new drugs to Chinese patients whilst enhancing China's competitiveness in the global pharmaceutical innovation landscape.