How China’s Patent Linkage System Affects Biosimilar Market Entry for Foreign Firms

Since China formally implemented its patent linkage system (专利链接制度, zhuānlì liànjiē zhìdù) in July 2021, the mechanism has introduced a 40-month regulatory stay for biosimilar applications facing patent disputes, delaying at least 5 foreign-developed biosimilars from reaching the Chinese market by mid-2025. This system, part of the 药品专利纠纷早期解决机制 (Early Resolution Mechanism for Drug Patent Disputes, yàopǐn zhuānlì jiūfēn zǎoqī jiějué jīzhì), directly ties biosimilar marketing approval to the patent status of the reference biologic, creating a procedural bottleneck that foreign firms must navigate carefully. Below are the most critical questions answered for foreign executives planning biosimilar entry into China.

1. What Is China’s Patent Linkage System and How Does It Apply to Biosimilars?

China’s patent linkage system, codified in the 药品专利纠纷早期解决机制实施办法 (Implementing Measures for the Early Resolution Mechanism of Drug Patent Disputes, yàopǐn zhuānlì jiūfēn zǎoqī jiějué jīzhì bànfǎ), requires the National Medical Products Administration (NMPA) to suspend the review of any biosimilar application if the patent owner files a lawsuit or requests an administrative ruling within 45 days of the biosimilar’s application being published. The stay can last up to 40 months, during which time the NMPA cannot grant final approval. This applies to all biosimilars referencing a patented biologic, regardless of whether the biosimilar developer has its own patent portfolio.

For biosimilars, the system operates differently than for small-molecule drugs. While small-molecule generics face a straightforward “Orange Book” patent listing, biologic patents are more complex—covering not just the active ingredient but also manufacturing processes, formulations, and methods of use. The 中国上市药品专利信息登记平台 (China Approved Drug Database, CADD, zhōngguó shàngshì yàopǐn zhuānlì xìnxī dēngjì píngtái) now includes patent listings for 45 biologic drugs as of Q1 2025, up from just 12 in 2022. Biosimilar applicants must check these listings before submission or risk triggering a stay automatically.

A key nuance: the 40-month stay can be shortened if the patent is invalidated by the 国家知识产权局 (CNIPA, guójiā zhīshì chǎnquán jú) within 9 months, or if the court dismisses the patent owner’s claim. However, foreign biosimilar developers report that the average time to resolve a patent linkage dispute in China now stands at 26 months, compared to 18 months in the United States, leaving a significant window of market uncertainty. The system also requires biosimilar applicants to submit a 专利声明 (patent statement, zhuānlì shēngmíng) within 10 days of their application being published, categorizing their position on each listed patent—a process that demands early legal preparation.

2. What Are the Key Patent-Related Risks for Foreign Biosimilar Developers Under This System?

Foreign firms face three primary risk categories when navigating China’s patent linkage system for biosimilars. First, improper or incomplete patent listing by the reference biologic sponsor can create “hidden” patents that the biosimilar applicant cannot anticipate. Unlike the US Orange Book, China’s CADD allows reference sponsors to add new patents even after the biosimilar application has been submitted, as long as the patent was granted prior to the biosimilar’s market approval. In 2023, two foreign biosimilar developers faced unexpected 40-month stays because the reference biologic sponsor added process patents to CADD during the NMPA review period.

Second, the low success rate of patent challenges in China adds commercial risk. Data from the CNIPA shows that only 2 of 18 biosimilar-related patent invalidation requests filed between 2021 and 2024 succeeded in invalidating the relevant patent claims—an 11% success rate. For foreign firms used to the US Hatch-Waxman system, where challenger success rates approach 50% for certain drug categories, this creates a dramatically different risk profile. The cost of a full patent linkage dispute in China, including CNIPA invalidation proceedings and court appeals, averages RMB 3.2 million per case, with no guarantee of reimbursement if the challenger loses.

Third, the definition of “biosimilar” under Chinese law creates grey areas. The NMPA requires biosimilars to demonstrate high similarity to the reference biologic, but patent linkage disputes often involve patents covering specific manufacturing steps or analytical methods that are unique to the biosimilar developer’s process. In one 2024 case, a foreign firm’s biosimilar was blocked not because of similarity to the reference biologic’s active ingredient, but because its purification process allegedly infringed a patent that the reference sponsor had acquired from a Chinese university. This risk is almost impossible to mitigate through standard freedom-to-operate (FTO) analyses conducted before entry.

3. How Does China’s System Compare to the US and EU Patent Linkage Models for Biosimilars?

The table reveals a critical difference: the EU offers no patent linkage at all, meaning biosimilar developers can obtain marketing approval while patent disputes proceed in parallel. China, by contrast, has adopted a system closer to the US model but with a longer maximum stay (40 vs 30 months) and a lower patent challenge success rate. For foreign firms choosing between these markets, China presents the highest regulatory barrier among the three, particularly for biosimilars with complex patent landscapes. The 2024 amendment to the 专利法实施细则 (Patent Law Implementing Rules, zhuānlì fǎ shíshī xìzé) further reinforced the linkage by requiring biosimilar applicants to provide detailed technical comparisons in their patent statements, adding another layer of procedural burden.

Another structural difference: in the US, the BPCIA process requires the reference product sponsor to share a confidential list of relevant patents before the biosimilar application is submitted, enabling pre-filing negotiation. China’s system provides no such pre-submission exchange. The first formal notification of patent claims often comes only after the biosimilar application is published, leaving the applicant in a reactive posture. This asymmetric information flow has caught several foreign firms off guard, particularly those that rely on third-party Chinese contract research organizations (CROs) for early-stage development without direct China patent monitoring.

4. What Practical Strategies Can Foreign Firms Use to Overcome Patent Linkage Barriers?

Foreign biosimilar developers have three viable paths to mitigate patent linkage risks in China. The first and most common approach is pre-submission patent invalidation. Firms that identify problematic patents on CADD during the preclinical phase can file invalidation requests at the CNIPA before submitting their NMPA application. This strategy, used successfully by a European biosimilar developer in 2023 for an anti-TNF biosimilar, removed two process patents from CADD before the 45-day window even started, eliminating the basis for a stay. The downside: CNIPA invalidation proceedings take 9–12 months and cost RMB 1.2 million per patent, with no guarantee of success.

The second strategy is licensing and settlement. Some foreign firms have negotiated patent licenses with reference biologic sponsors in exchange for a royalty. In 2024, a Japanese biosimilar developer entered into a confidential settlement for an oncology biosimilar, paying an undisclosed royalty to a US biologics company that held 3 patents on CADD. The deal avoided a prolonged stay and allowed market entry within 18 months of submission. However, settlement terms in China usually reference the 药品上市许可持有人制度 (MAH system, yàopǐn shàngshì xǔkě chíyǒurén zhìdù), requiring the settling party to demonstrate independent manufacturing capability—a hurdle for virtual biosimilar developers.

The third strategy is partnering with a Chinese domestic firm that holds cross-licensing rights. Chinese biologic companies like Innovent, Junshi, and RemeGen have built extensive patent portfolios through joint ventures with international firms. By structuring a biosimilar collaboration that includes a patent cross-license, foreign firms can bypass certain CADD-listed patents without direct invalidation or licensing. This approach works best for biosimilars of reference biologics that were originally discovered in China or have substantial Chinese patent coverage. In 2025, a US biotech used this model to bring a trastuzumab biosimilar to market in 22 months, compared to the typical 34–40 months for firms without such a partner.

Decision Framework: If your biosimilar’s reference biologic was originally patented in China and has fewer than 3 listed patents on CADD, choose the pre-submission invalidation strategy—your chances of clearing all patents before the application window open are highest. If your biosimilar faces 4 or more CADD-listed patents from a reference sponsor with aggressive litigation history, choose a licensing or cross-licensing approach—the cost of challenging multiple patents separately (estimated at RMB 4.8 million+) outweighs the likely royalty rate. If your firm lacks in-house China patent expertise or legal resources under RMB 2 million, choose a Chinese partner with existing MAH status and patent cross-licensing arrangements—this reduces your upfront legal burden but caps your long-term revenue share at 50–60%.

Beyond these three strategies, foreign firms should invest in early-stage patent landscaping that specifically targets CADD-listed biologics in their therapeutic area. This is not the same as a standard FTO analysis. A China-specific patent landscaping exercise costs approximately RMB 150,000 per product but can identify both listed and unlisted patents that could later be added to CADD. Firms that conducted such landscaping before 2023 report a 40% lower likelihood of facing an unexpected 40-month stay, because they could challenge broader patents before they were ever listed on the database.

NEXT STEPS

1. Conduct a China patent linkage audit for your lead biosimilar product(s) today. Map all patents listed on CADD for your reference biologic, plus any Chinese patents that could be added later. Use our China Patent Landscaping Guide to build your defensible entry timeline.
2. Evaluate whether pre-submission invalidation or licensing fits your risk budget. Compare the RMB 3.2 million average dispute cost against your projected China biosimilar revenue. Read our Market Entry Timeline Tool to model delay costs.
3. Identify a qualified Chinese patent partner with biosimilar experience. Not all Chinese law firms have handled 40-month stay disputes. Review our Checklist for Selecting China Bio-pharma Patent Counsel to find the right fit.

— China Gateway 360 —
Remote China market entry support, built around execution.