Big Pharma thought India was a problem when it comes to drug patents, but now it looks like China may become the industry’s next big patent headache.

China’s State Intellectual Property Office (SIPO) has revoked the patent on Gilead Sciences Inc.’s drug Viread (tenofovir), used to treat HIV/AIDS and hepatitis B, meaning any drug maker will be able to produce the drug in that country.

China’s largest manufacturer of active pharmaceutical ingredients, Aurisco, had challenged the patent, arguing that the drug was not novel because the core patent for its active ingredient has been in the public domain since 1985 and other patents are for auxiliary ingredients that aid absorption, according to China health analyst Robert McTiernan of IHS Healthcare. Viread’s patent protection was scheduled to continue until 2017.

The drug had been at the center of China’s push to get drug companies to be more flexible with pricing, while at the same time offer IP protection to drug makers to attract foreign investment. Last year it amended its patent law so compulsory licenses could be issued to companies to produce generic versions of patented drugs under certain circumstances or if deemed in the public interest.

China has more than 30 million chronic hepatitis B sufferers—one-third of the world total, according to the Worth Health Organization. And HIV/AIDS cases in the country are also on the rise, causing 11,575 deaths in 2012 – an increase of 25 percent from the previous year, IHS Global Insight said. The Geneva-based The Global Fund to Fight AIDS, Tuberculosis and Malaria ceased providing grants to China to fight HIV this year.

But rather than demand a compulsory license for Viread, China chose to revoke Gilead’s patent on the drug altogether. The pharmaceutical company started offering the drug in China at a discount after the compulsory license law went into effect, but this evidently was not enough.

“It is a fairly groundbreaking decision, IHS’s McTiernan told BioWorld. “The big trend is that they want pharma companies to be more flexible on pricing. They will likely be able use this decision to negotiate lower prices on more drugs.”

Although the move to revoke the patent was dramatic, it is unclear that China will make a habit of taking such severe actions with other drugs. Viread may have been an easy target. Gilead twice successfully defended its patent in the U.S., but courts in Brazil and India have declared the patent invalid, and Indonesia has issued a compulsory license.

No one from Gilead was immediately available to comment.

The news comes on the heels of a decision by India’s patent office to cancel patents for two separate breast cancer drugs. India's Intellectual Property Appellate Board last month revoked GlaxoSmithkline PLC’s patent on the breast cancer drug Tykerb, which is a derivative salt of a previously patented medicine. The move follows the landmark Novartis court ruling in April that disallows patents for incremental innovations.

And last week India’s patent authority stripped Roche Holding Ltd. of some of its patents for Herceptin, saying they were not filed correctly. A secondary patent on the drug granted in 2007, however, appears to still be valid and is set to expire in 2019.

India has come under fire from Big Pharma, from the U.S. Trade Representative and from members of Congress for its intellectual property policies. Worried Last year, India revoked patents for Roche's hepatitis C drug Pegasys, Pfizer Inc.'s cancer drug Sutent, and Merck & Co's asthma treatment aerosol suspension formulation. All were revoked on grounds that included lack of innovation.

And yesterday, India’s patent appeals board revoked patents covering Allergan's glaucoma drugs Ganfort and Combigana after they’d been challenged by Indian drugmaker Ajanta Pharma.

(By Lisa Shuchman/ Source: www.law.com)