China's e-pharmacy business eyes prescription drugs

 10-Apr-16, China Daily 

China's e-commerce giants are getting a hand in pharmaceuticals as the government directs prescription drug sales away from hospitals and into retail.

Image: Asia Pacific Daily News

China's online pharmacy business has grown from virtually nothing five years ago to more than 7 billion yuan (USD1.1 bn) in 2014, accounting for 3% of all retail sales of medicine in the country.

But analysts say the boom in online medicine sales is only a preview of explosive growth to come, provided that authorities allow online pharmacies to sell prescription drugs. So far online pharmacy sales consist mostly of over-the-counter medicine, which contributes very little to margins.

One of the key themes in China's ongoing medical reform is to reduce hospital reliance on drug sales for revenue. While regulations are ushering more prescription drug sales toward retail channels, including online pharmacies, the pace of that transition remains uncertain.

Access to prescriptions is the key for online pharmacies to get into prescription drug sales. Some local trials have managed to extend medical insurance coverage to online medicine purchases, an important incentive for patients to buy online. 

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