Context: AstraZeneca’s oral drug dapagliflozin, sold under the brand name Farxiga, first received approval to be marketed in China for treating adults with type 2 diabetes in 2017. The drug has been very profitable for AstraZeneca on an international level, with the company making US$5.9 billion in sales of Farxiga in 2023 – a 36% increase on 2022 (February 8, 2024 AstraZeneca 2023 financial report). In 2023, it was the most frequently used oral hypoglycemic drug in Chinese hospitals, with sales recorded at approximately 3.5 million Chinese yuan (US$481 million). However, in 2021, 13 local Chinese generics manufacturers launched an invalidation campaign against three of the patents related to dapagliflozin. AstraZeneca quickly became the target of the highest number of patent invalidation complaints (33) ever filed over one drug in China.
What’s new: AstraZeneca successfully defeated all 33 invalidation claims related to its dapagliflozin drug before the China National Intellectual Property Administration (CNIPA) and the Patent Re-examination Board in two rounds – one in June and the other in August. The decisions have not yet been published.
Direct impact: AstraZeneca’s invalidation decisions are significant because they diverge from the CNIPA’s past practice around crystalline form patents – which until this case were not considered strong enough. Such patents are not as stable as typical pharmaceutical compound patents, but the CNIPA and the Patent Re-examination Board held up their validity, which was “very encouraging” and indicates a shift in their inventiveness assessments, King & Wood Mallesons partner Tina Tai, who was counsel for AstraZeneca, says.
Wider ramifications: The decisions upholding the validity of the patents reassure multinational companies seeking to enforce their IP in China that the idea of “local protectionism” – one of their biggest concerns – is not a thing, according to Mrs. Tai. The case adds to China’s ongoing efforts to make its market more attractive to overseas IP owners. In July, for example, the CNIPA held a roundtable with 11 different multinational companies, including AstraZeneca, to discuss how they could make China’s IP system a more attractive venue for IP owners in the life sciences and technology industries.
Dapagliflozin, the world’s first SGLT2 inhibitor approved for the treatment of type 2 diabetes, was originally developed by Bristol-Myers Squibb in 2002 and is currently available in the US, the UK, several EU markets, Japan and China. The company later sold the global sales rights to the drug to AstraZeneca. The patents filed in China related to the drug are due to expire between 2027 and 2041 (February 26, 2024 AstraZeneca investor relations report).
The invalidation claims were brought by the following Chinese generics companies:
- Chia Tai Tianqing Pharmaceutical Group Co., Ltd. (CTTQ)
- Beijing Foyou Pharma Co., Ltd.
- Sichuan Guowei Pharmaceutical Co., Ltd.
- CSPC Ouyi Pharma
- Nanjing Zhengda Tianqing Pharmaceutical Co., Ltd.
- Nanjing Huaxun Intellectual Property Consulting Co., Ltd.
- Shandong Xinhua Pharmaceutical Co., Ltd.
- Jiangsu Hausen Pharmaceuticals
- Beijing Shuanglu Pharmaceuticals
- Yiling WH Group International Pharmaceuticals
- Hunan Jiudian Pharmaceutical
- Zhejiang Huahai Pharmaceutical
- Qilu Pharmaceutical
The patents in question include:
- China Patent No. 101479287B (“Crystalline solvates and complexes of (is) -1, 5-anhydro-l-c- (3- ( (phenyl) methyl) phenyl) -d-glucitol derivatives with amino acids as sglt2 inhibitors for the treatment of diabetes”).
- China Patent No. 102743340B (“Pharmaceutical formulations containing dapagliflozin propylene glycol hydrate”)
- China Patent No. 101686988B (“Pharmaceutical formulations containing dapagliflozin propylene glycol hydrate”)
Pharma patent enforcement in China
After the first batch of decisions were handed down in June, AstraZeneca’s chief IP counsel in China Xu Feng stated that the protection of this patent had further strengthened the company’s determination to invest in China. AstraZeneca has already indicated the way it feels about China’s overall IP environment improving, having invested over US$700 million in a new Qingdao factory in 2023 and a further US$475 million for a small molecule drug factory in Wuxi earlier this year, Mrs. Feng disclosed.
“Local protectionism is one of the biggest concerns faced by multinational companies when they are seeking to enforce their patents in China, but this case will reassure them that this is not the case,” says King & Wood Mallesons partner Tina Tai, who was counsel for AstraZeneca. “The company’s patents were challenged by more than a dozen major Chinese generics manufacturers, including pharma giants Foyou Pharma, Guowei Pharmaceutical and CTTQ, yet the CNIPA and the Patent Re-examination Board maintained their validity – confirming the Chinese patent system’s impartiality”, Mrs. Tai adds.
AstraZeneca also recently took part in a roundtable hosted by the CNIPA in July to discuss how to make China a more attractive place for foreign patent enforcement. Alongside a further 10 major foreign IP owners – Nidec Corporation, Bayer, Boehringer Ingelheim, Phoenix Contact, Merck, Schneider Electric, Ford, LEGO, Tesla and Siemens – the company “articulated their concerns” and the CNIPA will take them on board moving forward, the patent office said in a statement in July.
AstraZeneca’s record case also comes after a patent invalidation campaign was launched against Boehringer Ingelheim by domestic manufacturer Guangdong HEC over its diabetes drug Linagliptin. That case was settled by the CNIPA under its new special administrative procedure powers in 2022.
Shanghai is in particular trying to improve its IP system for patent owners, including with the recent introduction of an early resolution mechanism for drug patent disputes and a corporate voluntary commitment system. This procedure has helped pharmaceutical giants resolve major patent disputes more efficiently – such as Bayer, which was awarded 24.3 million Chinese yuan (US$3.3 million) in a dispute against a local Shenzhen manufacturer over high-pressure syringes in 2019. This is still one of the highest amounts of damages awarded in a patent case in China’s life sciences field to date. In a recent statement to the CNIPA, Bayer’s vice president of IP Liu Hongqiang said:
“We hope China continues to enhance its pharmaceutical patent term compensation system and early resolution mechanisms for pharmaceutical patent disputes to further strengthen pharmaceutical companies’ confidence in investing in China.”
AstraZeneca’s Farxiga patent challenges in China are some of several it has faced across the world. The company is currently facing a challenge by Generics (UK) Ltd. Teva Pharmaceutical Industries Ltd., and Glenmark Pharmaceuticals Europe Ltd. in the UK. A trial has been scheduled for March 2025. Meanwhile, in the U.S., the company celebrated a win against Zydus Pharmaceuticals in 2022 but has recently filed a dispute against Sun Pharmaceutical Industries Ltd. and Sun Pharmaceutical Industries, Inc. No trial has been set yet. In February 2023, AstraZeneca bagged a significant win in South Korea, when the Supreme Court confirmed for the first time that a compound patent related to its Farxiga covers generic prodrugs.