|
 The China Food and Drug Administration (CFDA) is finalising which
prescription medicines to approve for sale, a senior healthcare
policy adviser told Reuters.
The policy would help reform a fragmented and opaque market
controlled by state-run distributors and hospitals, brought into the
spotlight last year by a bribery case which saw drugmaker
GlaxoSmithKline PLC fined nearly $500 million.
"The policy will be released in January or February and the CFDA is
actively working on it," said the adviser, who was not authorised to
speak with media on the matter and so declined to be identified.
Hospitals currently account for around 70 percent of drugs sold to
consumers. Among retailers, online pharmacies are restricted to
selling over-the-counter medicines and healthcare products such as
cough remedies and vitamin tablets.
The new policy could eventually allow online retail pharmacies such
as Alibaba Health Information Technology Ltd and the pharmacy
platform of JD.com Inc to wrest sales from hospitals.
Frank Zhao, chief financial officer at pharmacy chain China Jo-Jo
Drugstores Inc, said the CFDA had was reviewing the list of
prescription drugs for sale online.
"It may be a couple of days or weeks before the final list," he
said.
ONLINE WINNERS
Pharmacies with an online presence, such as U.S.-listed Jo-Jo
Drugstores and China Nepstar Chain Drugstore Ltd, as well as general
online retailers also stand to benefit. Marketplaces Alibaba and
JD.com already have licences to sell over-the-counter drugs online,
as does U.S. retailer Wal-Mart.
Initially, online prescription drug sales are likely to be
business-to-business (B2B) before spreading to retailers. The
potential size of the B2B drug market ranges from 300 billion yuan
to as much as 800 billion yuan, according to Deutsche Bank.
[to top of second column] |
At risk could be offline middlemen such as Sinopharm Group Co Ltd,
Shanghai Pharmaceuticals and China Medical Systems Holdings Ltd.
It will take considerable time for companies and consumers to get
used to the new model, said Jo-Jo Drugstores' Zhao, adding the
policy would allow his firm to expand significantly online. In the
U.S., around a third of drugs are sold online compared with almost
zero currently in China, Zhao said.
Drugs sold online may be up to 10 percent cheaper than those sold
through traditional channels, analysts say.
"The government has a common theme - to improve quality of care for
the masses and at the same time contain costs," said Andrew Chen,
head of PwC's China Consulting Healthcare practice. "So, the
e-pharmacy side is definitely going to be a trend."
($1 = 6.2092 Chinese yuan renminbi)
(Additional reporting by SHANGHAI newsroom; Editing by Christopher
Cushing)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
