China’s in online pharmacy tie-up with Shanghai Pharma

PUBLISHED : Monday, 18 May, 2015, 11:25am
UPDATED : Monday, 18 May, 2015, 11:25am

Chinese e-commerce giant has tied up with leading Chinese drugmaker Shanghai Pharmaceuticals to develop its online healthcare business, the drugmaker said in a filing on Monday.

The move reflects a growing rivalry between Chinese e-commerce firms over China’s fast-growing online healthcare market, with technology seen as a potential cure for a sector that is bogged down by high prices, snarling hospital queues and frequent allegations of corruption.

Larger rival Alibaba Group said it joined forces with US drugmaker Merck & Co last week to explore developing online health services such as warehousing logistics and health data analysis.

The sale of prescription drugs online in China is currently prohibited, but Beijing is expected to open up the market soon and is finalising the list of medicines that will be approved for online sale, industry sources said.

READ MORE: Doctor consultation app seeks to disrupt China's health care market

“The government has recently announced a series of policies to encourage the development of online pharmacy and we expect this area to be a huge market opportunity,” Shanghai Pharma said in a filing to the Hong Kong stock exchange.

A spokesman declined to give immediate comment.

China is a magnet for drugmakers, medical device firms and hospital operators looking to tap the world’s second-biggest pharmaceutical market, where spending is set to hit as much as $185 billion by 2018, according to estimates from IMS Health.

Shanghai Pharma added a note of caution, reflecting wider concern over regulation of the sector: “China’s online drug market is still at an early stage, and there are still some uncertainties around policies governing this sector,” it said.