(Reuters) - China has rejected Gilead Sciences Inc's application for a new patent related to its costly hepatitis C drug Sovaldi, removing a potential barrier to generic versions of the drug there, a U.S. legal group announced on Friday.

The New York-based group, Initiative for Medicines, Access & Knowledge, or I-MAK, challenged Gilead's patent application this year as part of its campaign to make generic Sovaldi available in several countries. The group said on Friday it had received notice of the patent application rejection from officials in the China State Intellectual Property Office.

I-MAK said it challenged the Gilead patent applications in China and other countries so hepatitis C patients could get cheaper generic versions of the drug. Tahir Amin, I-MAK's director of intellectual property, said the latest decision makes it more likely that advocates may challenge another Gilead drug patent in China that currently prevents the introduction of generic treatments for hepatitis C.

The application China has rejected was on a so-called prodrug, a chemical used to activate Sovaldi's active chemical once it is in the body, according to I-MAK.
Gilead still has a patent in China on sofosbuvir, the main ingredient of Sovaldi, a highly effective treatment for hepatitis C which costs $1,000 per pill in the United States. That adds up to $84,000 for a typical 12-week course.

California-based Gilead agreed last year to make the drug available for lower prices in 91 developing countries, although I-MAK has said that more than 59 million low-income hepatitis C patients worldwide are still without access to the drug.

In May I-MAK said it had brought legal challenges against Gilead's patents or patent applications in five countries not covered by the agreement: China, Argentina, Brazil, Russia and Ukraine.

Amin said he believed the decision by China's patent office to reject the prodrug patent application would encourage challenges to the sofosbuvir patent as well.
If that patent were invalidated, he said, it would open the door for Chinese companies to sell generic Sovaldi, as well as to supply raw materials for the drug to manufacturers in other countries.

In January, India's patent office refused to grant Gilead a patent on Sovaldi, finding it was not inventive enough. Gilead is appealing the ruling.

Last month, the United Nations' World Health Organization added Sovaldi to its essential medicines list and urged lower prices, especially in middle income countries.