China's patent compensation system for drugs has been a topic of heated discussion among scholars and industry experts. The system was established under the revised Patent Law in 2020, providing up to five years of extended patent protection for relevant invention patents of new drugs that have obtained marketing approval in China. The aim of the system is to compensate for the time taken for the evaluation and approval of new drugs and to encourage innovation in the pharmaceutical industry. However, it has also sparked debates on issues such as eligibility for compensation, calculation methods for compensation periods, and whether improved new drugs should be eligible for compensation.

The drug patent compensation system originated from the Drug Price Competition and Patent Term Restoration Act of 1984 in the United States and has since been implemented in many countries and regions, including the European Union, Japan, and South Korea. The main purpose of the legislation is to compensate patent owners for the time and benefits lost due to the clinical trials required to demonstrate the safety and efficacy of drugs for marketing approval. In China, the algorithm used to calculate compensation is based on the time elapsed from obtaining the patent to the drug's marketing approval, with the remaining valid patent period set at 14 years.

Currently, in the field of drug patents, domestic innovation is accelerating, and the time difference between the launch of multinational enterprise drugs at home and abroad is significantly narrowing. Domestic and foreign cooperation is also becoming more frequent, and improved new drugs have become an important strategy for companies. Against this backdrop, Article 42 of the Patent Law introduced the concept of "new drugs." There are differing opinions on whether "new drugs" refer to "Chinese new drugs" or "global new drugs." Those who support "Chinese new drugs" believe that only new drugs that obtain marketing approval for the first time in China can fulfill the legislative purpose and encourage domestic companies to develop new drugs that meet China's needs and affordability. Those who support "global new drugs" believe that any new drug that has undergone clinical trials and registration in China should receive compensation; otherwise, the rights of multinational and cooperative enterprises will be undermined.

Regarding whether improved new drugs should be eligible for compensation, the current "Draft Amendments to the Implementation Rules of the Patent Law (Solicitation of Comments)" and "Draft Amendments to the Patent Examination Guidelines (Solicitation of Comments)" limit them to some categories of 2.1 and 2.4 drugs. From the perspective of legislative purposes, any improved new drug should be eligible for patent compensation. Improved new drugs that lack sufficient patents or sufficient periods of patent protection are not conducive to encouraging companies to develop them. However, excessive compensation may exacerbate the problem of product hopping and have an impact on drug accessibility.

Therefore, when formulating specific regulations, various factors should be considered comprehensively, balancing multiple goals such as industrial development, promoting drug technology innovation, and ensuring drug accessibility, to provide clear guidance and basis for the implementation of China's drug patent compensation system.