Xuzhou Xinbaisheng Protective Equipnent Co., Ltd. , https://www.xinparkson.com
Prominently enclosing the patented drugs also requires counter-institutional "killing"
The challenges surrounding patents have long been a major pain point for local pharmaceutical companies. While multinational corporations dominate core technologies, they have employed various strategies to suppress Chinese enterprises in the area of intellectual property. According to available data, the United States holds 59% of biotechnology patents, 51% of pharmaceutical patents, and 40% of human genetics patents, while all developing countries, including China, collectively hold only 5%, 4%, and 3% respectively in these fields. This imbalance highlights the deep-rooted disparities in innovation and technological leadership.
When it comes to balancing public health needs with patent protection, the interests of developed and developing nations diverge sharply. On one side, developing countries seek affordable medicines to protect public health and national security, while on the other, developed nations invest heavily in R&D to secure profitable patented drugs. As a result, governments often prioritize protecting their own interests, leading to a prolonged and complex struggle over intellectual property rights.
This tug-of-war is further complicated by the difficulty of developing new drugs. Domestic companies find it challenging to compete in the global market due to limited innovation capabilities, and under a profit-driven system, no company wants to give up its competitive advantages. Drug patents are a key source of revenue for pharmaceutical firms, and once a patent expires, drug prices typically drop by as much as 80%, causing a sharp decline in sales. To maintain their market dominance, multinational corporations often acquire smaller firms or expand through mergers to secure new patents and increase market share.
This dynamic has led to an imbalanced industrial ecosystem, where the core strength of many large pharmaceutical companies lies not in independent R&D, but in their ability to acquire and sustain patent rights through strategic moves. The situation is particularly tough for local players who must navigate this complex landscape while trying to build their own innovation capacity.
In response, China is expected to revise its Patent Law to better address these challenges. Facing the powerful patent strategies of multinational giants, the country is taking a more proactive approach. By leveraging the intellectual property system and its functions, China aims to gain a stronger position in market competition—a practical and direct way to counter the current challenges.
Interestingly, even in a major patent-holding country like the U.S., the use of flexible provisions under the TRIPS Agreement is just as strong as in developing nations. The U.S. has a well-established “patent exception system,†which includes several legal mechanisms such as the Bolar Exception, Sovereign Immunity, and Special Compulsory Licensing. These provisions allow for exceptions in cases of public interest, such as drug development, government use, and critical technologies like clean energy and nuclear power.
The Bolar Exception, in particular, has become a safe haven for managing patent risks during drug development. U.S. courts have increasingly broadened the interpretation of this clause, expanding its application beyond pharmaceuticals to include medical devices. Even if the research is conducted for commercial purposes, as long as it's aimed at collecting data required for FDA approval, it’s considered "reasonable and relevant." Moreover, even preclinical studies that may not be submitted to the FDA can still qualify for the Bolar Exception if they meet formal submission standards. The Supreme Court has also ruled that the Bolar Exception isn’t limited to human trials—it applies equally to animal testing.
At its core, the patent system grants inventors temporary monopolies over their creations, but respecting intellectual property doesn’t mean abandoning competitiveness. Although the patent landscape is fierce, flaws persist. For local companies, navigating this environment requires not only courage but also strategic use of tools like the Bolar Exception and compulsory licensing to defend their interests and drive innovation forward.