E-commerce firms in China to cash in on prescription drugs

Want China Times, Staff Reporter 2014-10-15

A pharmacy in Taiyuan, Shanxi province, April 11. (File photo/CNS)

E-commerce operators in China are setting their sights on the huge prescription medicine market, estimated to be worth 300 billion yuan (US$49 billion) a year and which is scheduled to be opened up in early 2015 at the latest, according to Guangzhou's Time Weekly.

The market opening has been made possible thanks to draft measures governing the online sale of food and medicine issued by the China Food and Drug Administration (FDA) in May. The measures explicitly point to an opening up of the online sale of prescription medicine and permission for pharmacies to apply for licenses for online sales.

E-commerce operators are gearing up to tap the huge business opportunities, including Yihaodian, which has obtained approval from the FDA for online retail of drugs, and hopes to expand into prescription drugs. E-commerce giants Jingdong Mall and Tmall are also preparing to sell prescription drugs online and are currently awaiting approval from the FDA.

"The approval for the online sale of over-the-counter medicine is but a prelude to the online prescription medicine business, as the latter is where the market potential really lies," said Peng Shugang, superintendent for external affairs at Yihaodian, adding that safety and control is critical for the latter.

E-commerce operators are upbeat about the liberalization of online prescription drug sales, estimating the market potential at 300 billion yuan a year, or 30% of the overall market, the paper said.

Yihaodian is also exploring the possibilities of partnering with hospitals.

Tmall expects the opening of the prescription drug market will give a strong boost to its existing online medicine sales, which topped 2 billion yuan (US$326 million) from 120 online pharmacies on its platform in 2013.