China pharmacies urge abolition of Alibaba Health drug tracking platform
24/02/2016 09:32
SHANGHAI, Feb 24 (Reuters) - A group of Chinese pharmacy
chains has demanded the abolition of a medicine tracking
platform run by Alibaba Health Information Technology 0241.HK ,
piling further pressure on the firm after China's drug regulator
suspended the system on Saturday.
In a joint statement on Wednesday, the 19 firms called for
the China Food and Drug Administration (CFDA) to close down the
system completely and for Ali Health, an affiliate of e-commerce
giant Alibaba Group Holding Ltd BABA.N , to play no further
regulatory role.
"Ali Health getting involved in regulation of pharmaceutical
information, both has a bearing on the safety of national data
and creates unfair competition," the pharmacy chains said in a
statement. Among the 19 are firms like Sinopharm Group Co Ltd's
1099.HK Guoda Drugstore, China Jo Jo Drugstores Inc CJJD.O
and Laibaixing Pharmacy Chain 603883.SS .
The conflict underlines fissures within China's fragmented
drugs market, as well as entrenched opposition to big changes
from established firms as Beijing tries to reform the sector.
China is a magnet for drugmakers, hospital operators and medical
device firms targeting a wider healthcare bill estimated to hit
$1.3 trillion by 2020. urn:newsml:reuters.com:*:nL3N10B1BW
A spokesman for Alibaba, which handles press relations for
Ali Health, declined to comment on Wednesday. Ali Health said in
a regulatory filing last Sunday it had not received notification
from the CFDA and would continue to operate the platform.
Ali Health saw its shares drop 14 percent on Monday after
the CFDA said it had suspended the platform. It operates online
medicine sales, but makes most of its revenues from operating
the drug tracking platform, known as the Product Identification,
Authentication and Tracking System (PIATS). urn:newsml:reuters.com:*:nL3N1611MJ
The system, owned by the CFDA but operated by Ali Health,
had caused tension within China's healthcare market, with
pharmacy chains saying the Alibaba-linked firm would have an
unfair advantage over rivals. urn:newsml:reuters.com:*:nL3N15D22S
($1 = 6.5321 Chinese yuan renminbi)
(Reporting by Adam Jourdan; Additional reporting by John
Ruwitch; Editing by Kenneth Maxwell)
((adam.jourdan@thomsonreuters.com; +86 21 6104 1778; Reuters
Messaging: adam.jourdan.thomsonreuters.com@reuters.net))
Keywords: CHINA PHARMACEUTICALS/ALI HEALTH