In January 2026, the U.S. Supreme Court decided to hear the case of Hikma v. Amarin, marking the peak of the dispute surrounding the "infringement by label" theory. The core of this theory is that even if generic drugs have legally "carved out" the patented uses from their labels, generic drug manufacturers may still face charges of inducing infringement once the court believes that the remaining content of the label or its marketing communications (like simply referring to the product as a "generic version" of the brand-name drug) could be interpreted as encouraging infringement.

China's exploration: characteristics and challenges of the "Chinese-style" patent linkage mechanism

Unlike the United States’ primarily developing rules through judicial precedents, China established a patent linkage mechanism combing administrative and judicial procedures through regulations in 2021 such as the "Implementation Measures for the Early Resolution Mechanism of Drug Patent Disputes (Trial)". Using US framework for reference, this mechanism exhibits a distinct "administrative-led" characteristic in key aspects, aiming to resolve disputes at the early stage of market approval.

According to comparative research of the Chinese and American systems, the differences are mainly followed as:

Here are two aspects China's challenges mainly concentrated in:

First, the operability of the system itself, such as the completeness and accuracy of patent information registration and the fulfillment of notification obligations by generic drug companies. Second, the "patent thicket" strategy responding to the increasingly sophisticated of multinational pharmaceutical enterprises, which uses peripheral patents such as crystal form, formulation, and use to build multi-layered protection. Generic drugs may still be blocked by other patents though they successfully challenge core patents.

US-China Competition and Cooperation: the convergence of the innovative drug market and the interaction of institutional environments

According to relevant data, of the 511 new molecular entity drugs approved in the U.S. from 2015 to 2025, 231 (45%) have already been launched in China, the vast majority of which are imported innovative drugs from multinational pharmaceutical companies. Particularly in the areas of major diseases such as oncology and infectious diseases, the drug coverage in the Chinese and U.S. markets shows a high degree of consistency.

In the meantime, China's domestic innovative drug ecosystem has achieved leapfrog development in the past decade. The number of world-first innovative drugs approved in China has increased from 3 in 2015 to 39 in 2024, ranking second globally and nearly on par with the U.S. (41). The number of innovative drugs for which clinical trials were first initiated in China reached 704 in 2024, ranking first globally and far exceeding the second-place United States (440). Additionally, China's share of international licensing transactions for innovative drugs reached 17% in 2024, making it the world's second-largest source of licenses.

This pattern of cooperation and competition indicates the following:

1. Highly intertwined markets: A large number of U.S. innovative drugs rely on the Chinese market to achieve global returns, while Chinese innovative drugs also urgently need to enter the U.S. market to validate their value and make a profit.

2. Mutually influential rules: Any major change in the patent system of one party directly affects the industrial interests of the other. The establishment of "infringement by label" theory by U.S. Supreme Court will not only suppress competition in the U.S. generic drug market but may also indirectly affect the patent battles of multinational pharmaceutical companies in the Chinese market through their global strategies.

3. China’s dual role: China is not only a huge consumer market and a battleground for generic drugs for imported drugs already on the market, but also a "parallel player" or even a "leader" transforming from a "follower" for drugs in the R&D. Therefore, China needs to improve its systems to promote the development of domestic generic drugs and ensure drug accessibility, while also to establish a patent environment sufficient to protect and incentivize domestic original innovation.

Implications for China: Optimizing the domestic patent linkage mechanism with a focus on enhancing institutional "certainty"

In terms of the "patent thicket": take introducing more substantive formal examination during the patent information registration process into account, or exploring stricter examination of the inventiveness or necessity of peripheral patents in administrative rulings and judicial procedures to prevent the abuse of the patent evergreening strategy.

In terms of incentives for first generic drugs: carefully evaluate current stringent conditions of "double first" limited to "patent invalidation", and study whether the scope of "successful challenge" (such as including effective rulings that "do not fall within the scope of protection") can be appropriately expanded to truly realize the incentive effect of the market exclusivity period.

From IPLEAD

March 1st, 2026