On February 25, 2022, Llinks Law Offices successfully held the seminar on pharmaceutical industry together with LCOUNCIL at its Shanghai Office. The seminar focused on the booming pharmaceutical industry under the COVID-19 situation, and attracted more than 50 legal counsels from well-known domestic and foreign pharmaceutical companies, CROs and Internet medical companies. Llinks partners, Dr. David Pan and Mr. Bill Zhou, and Ms. Susan Deng had a heated discussion with the guests on the hot topics in the pharmaceutical industry including drug licensing transactions, commercial bribery and internal investigation, and data compliance.
Dr. David Pan shared on the topic of "Key Legal Issues in Drug Licensing Transactions" from the aspects of "Core of Licensing Transaction: Valuation and License Fees", "New Drug Valuation Methods" and "Critical Terms of License Agreement". At the beginning, Dr. Pan raised the guests' thoughts on "the key factor of a successful pharmaceutical license transaction" through the Q&A, and pointed out that "the unanimous determination of the value of the licensed object by both parties is the prerequisite for a successful license transaction". During the speech, Dr. Pan briefly introduced the technical difficulties and risk allocation in the research and development of new drugs, elaborated the main methods, considerations and valuation process of new drug valuation through several examples, analyzed the risks of continuing research and development in licensing transactions after licensing and the determination of valuation and Profit Split Ratio (PSR) under the three modes of cost identification, and explained the considerations about different countries in the evaluation of new drugs, such as the sales and value determination of innovative drugs in China and the United States. Regarding the critical terms of the license agreement, Dr. Pan analyzed the enterprise stage of the licensor and the licensee and the choice of complex and simple contract terms, explained the considerations of the nature and scope of the licensing, the composition and determination of the entry fee, milestone fee and license fee, as well as the governing body, contract withdrawal and other terms. In terms of drafting and reviewing licensing agreements, lawyers must have comprehensive quality, in addition to knowledge and skills related to patent and commercial, they also need to have knowledge in other fields such as financial models, anti-trust and export control. Based on his rich experience in legal services related to drug licensing transactions, Dr. Pan provided ideas for legal professionals to better review licensing agreements and participate in transaction negotiations in consideration of business needs.
Under the background of the regulatory authorities cracking down on bribery in the pharmaceutical industry, Mr. Bill Zhou shared his practical experience on the topic of "Commercial Bribery and Internal Investigation in the Pharmaceutical Industry". In the first part, Mr. Zhou clarified the consequences and characteristics of commercial bribery in the pharmaceutical industry through a number of cases, i.e., "involving criminal and not involving criminal" and "diversification of bribery methods", and emphasized that commercial bribery will result in loss of reputation of pharmaceutical companies. After introducing the relevant laws and regulations on commercial bribery, he focused on the manifestations of commercial bribery in the pharmaceutical industry. Combined with his rich experience, he discussed how to initiate and proceed an internal investigation, difficulties in practice and result evaluation, and provided suggestions for the aftermath, and pointed out non-reporting of information and internal collusion are common difficulties of pharmaceutical companies in the investigation in the second part.
Ms. Susan Deng discussed on "Key Issues of Data Compliance in the Pharmaceutical Industry" with guests. Taking typical data compliance scenarios (e.g., clinical trial, clinical study, connected device, real world study, etc.) and digital transformation scenarios (e.g. online seminar, patient journey management, patient education, etc.) as the starting points, she analyzed the unclear issues in medical health data, including the restrictions of the collection, storage and cross-border transfer of different types of specially regulated data, and explained on how to manage conflicts between data compliance and data usage, how to reasonably control compliance cost and other common questions. Other compliance issues related to digital transformation were aroused for guests' thinking and discussion, such as qualifications, data usage limitation, and intellectual property protection.
The speakers and guests discussed on the topic of this seminar, strengthening the understanding of opportunities and challenges of the development of the pharmaceutical industry. The atmosphere of the communication was lively. Llinks will keep paying attention to and analyzing the frontier issues and hot issues in the industry, with the principle of professionalism and pragmatism, and will provide the communication platform for professionals in the industry to participate extensively through seminars and other means.
