Patent System to Catch Up with Pharmaceutical Industry Expansion

The execution of Zheng Xiaoyu for corruption and dereliction of duty made headlines last year. As former director of Chinese watchdog the State Food and Drug Administration (SFDA), Zheng's death sentence reflects the PRC government's determination to protect consumers. For the pharmaceutical industry, the execution represented a step in the right direction. This sector has been widely criticized due to the prevalence of fake drugs and the lack of intellectual property (IP) protection from the government. The 2003 SARS attack, worldwide anger over deaths caused by the exportation of contaminated food and fake drugs, and Zheng's approval of unsafe drugs in violation of new rules all exposed China's lack of enforcement in the health care system. The Zheng scandal alerted the government to the need to reform the nation's pharmaceutical image by promulgating new measures and regulations. At the opening of the National People's Congress Premier Wen Jiabao emphasized the importance of the protection of public health, but the issue of IP infringement remains unresolved.

“In China, 90% of the [pharmaceutical] market is either counterfeit or generics,” said Ho Ling, partner and head of IP at Clifford Chance China.