China’s IP Protection Reform on Patent Term Extension (PTE): Impact on Drug Development and Regulatory Strategies

Harmonized regulatory framework & enhanced IP protection

Since 2015, China has been undertaking a comprehensive reform in the pharmaceutical industry. The initial focus was on the regulatory framework with review and approval efficiency, then the harmonization of industry guidelines with the international world by joining the International Council for Harmonization (ICH) in 2017 and the full implementation of ICH guidelines. At the same time, China is also releasing new laws, regulations, and guidelines on intellectual property (IP) protection for drugs, benefiting both innovative local and international companies.

The protection of drug data relies on three primary regulatory mechanisms: PTE, regulatory data protection (RDP), and market exclusivity. Among these, market exclusivity remains the least defined, as specifics are still pending final regulatory developments. Meanwhile, draft rules for RDP have already been released for public consultation, outlining clear timelines for data protection across different drug categories. Based on indications, this framework is expected to be finalized and enacted with minimal revisions in the near term.

In this article, we will delve into PTE in detail, exploring its current landscape and implications. Detailed analysis of Market Exclusivity and RDP will follow once their respective frameworks are fully enacted, allowing for a more comprehensive assessment of their practical applications.

PTE regulations: Patent Law of the People’s Republic of China (2020 Amendment)

Article 42 introduces patent term extension to compensate for the time consumed in the review and approval process for new drugs.

• Implementing Regulations of the Patent Law (2023 Revision): It further clarified the specific conditions, details, and procedures for requesting patent term extension.

The Detailed Rules of PTE in China

The patent term compensation system in China contains two main parts, which include PTA (Patent Term Adjustment) and PTE. China’s PTA originates from the 2020 Patent Law amendments and the 2024 revisions to the Implementing Regulations and Patent Examination Guidelines. Similar to the US PTA, it compensates for patent term losses due to examination delays. However, China’s PTA requires applicants to proactively request it, while the USPTO automatically calculates PTA in the US. Additionally, China’s PTA is primarily for invention patents, whereas the US PTA applies to all patent types. Hence, core patents related to drugs are eligible for the PTA in China.

PTA and PTE can be applied for the same patent for one drug, depending on your product development and market strategies, however, this article discusses the PTE only.

To make it more understandable, we compared the details of PTE in China with the PTE in the US and the EU (Table 1).

Table 1 The comparison of PTE in China, the US, and the EU.

Innovative Drugs Submitted NDA/BLA in China Before or Simultaneously in Other Regions are Eligible for PTE

The authorities encourage overseas sponsors to include China in their global development plans. This inclusion can enhance Chinese patients’ access to innovative drugs. To promote this, the China National Medicine Product Administration (NMPA) also issued many rules to encourage China to be integrated into multi-regional clinical trials (MRCTs) and seeks simultaneous market authorization submissions with other key regulatory bodies, such as the US FDA and the EU EMA.

One key requirement for eligibility in PTE is that the drug must qualify as an “innovative drug” under China’s regulatory framework. The definition of an innovative drug hinges on the NDA/BLA filing category submitted to the NMPA. Specifically, eligibility is granted to drugs that:

• Have not yet been marketed either domestically or internationally (New Drug), or
• Are existing marketed drugs that have undergone modifications to create novel therapeutic effects (Modified Drug); however, not all Modified Drugs are eligible for the PTE requirements.

This determination is directly tied to the type of NDA/BLA filing submitted to the NMPA, which classifies drugs based on their novelty and development context. In essence, the eligibility for PTE is closely aligned with the regulatory classification of a drug as innovative under Chinese regulations.

Development & Regulatory strategies and PTE

As mentioned above, the eligibility for PTE is related to the drug filing categories. To gain PTE protection in China, we suggest that sponsors include the China region in their global development plan to collect efficacy and safety data in the Chinese population and demonstrate the ethical differences. Then, the sponsors can file the drug market authorization with the NMPA simultaneously with other countries or before approval in other countries to avoid losing the identity of an “innovative drug” in the NMPA. On the other hand, not including China in the global development plan will delay the drug marketing process in China by several years.

Will the inclusion of China in the global development plan slow down the global clinical development process?

In the past, sponsors outside China often hesitated to include Chinese regions in their global clinical trials, fearing that it might slow down the process. Because the trials’ approval and start-up process in China took longer than in many other countries, leading to delays in subject enrollment in China, which in turn may potentially delay the initiation of the global Phase 3 trial. However, the landscape has changed significantly since China’s regulatory reforms. Since 2018, China has implemented a 60-working-day (approximately 3-month) silent approval policy for IND filings. This policy has been in place for seven years, and nearly all IND filings now receive a decision within this timeframe or even earlier. Additionally, most clinical sites in China can complete the ethical review process within 30 days. These changes have streamlined the clinical trial process, making China a more attractive place for global drug development.

Also, Chinese authorities are encouraging the sponsors to include the China region in their MRCT.

• For MRCT, the ethical review can be conducted before the IND approval, which can accelerate the clinical trial start-up.
• In June 2025, the NMPA issued a new policy seeking public opinions to accelerate the clinical trials for drugs that include the China region in their global development plan. It states that the IND filing approval can be within 30 working days for drugs in globally synchronized development which includes the China region. Those trials can be phase I and phase II clinical trials conducted under global synchronization, as well as phase III MRCTs. And we assume this policy will be effective very soon as well.

Besides, ICH guidelines related to global clinical trial development have been implemented in China. Those include ICH E5(R1): Ethnic Factors in the Acceptability of Foreign Clinical Data/Q&As（R1）and ICH E17: General Principle on Planning and Designing Multi-Regional Clinical Trials.

When and how should China be involved in the drug’s global development?

In general, the phase 1 pharmacokinetic (PK) trial should be designed to assess safety and determine whether there are any differences in the PK profile between Chinese and non-Chinese populations. And the dose selected for the Phase 3 trial should be utilized in the PK trial. It is highly recommended that the PK trial be completed as early as possible before the submission of the IND for the Phase 3 trial. Also, the Chinese subjects should reside in China, which means the clinical trial should be conducted on the Chinese mainland, but not overseas or in Taiwan, Hongkong or Macao. For phase II, unlike the requirements in Japan, Chinese subjects may not be a must. And phase III must have enough Chinese patients.

However, all drug development should be discussed on a case-by-case basis and then the most appropriate development and regulatory strategy. It’s recommended to communicate with NMPA to discuss the clinical development plan and a detailed and specific trial design. VCLS can help you decide which stage is most appropriate and how to communicate with the NMPA.

It’s important to note that delaying your NDA/BLA submission to the China NMPA until after your product is approved in other countries may result in the loss of Patent Term Extension (PTE) eligibility in China. Early alignment with China’s regulatory requirements can help avoid this risk. Understanding the specific expectations of the NMPA and integrating them into your global development strategy can be key to maintaining market opportunities.