Regulators in China are looking to allow online sales of prescription medicines starting in early 2015, according to Reuters. A senior healthcare policy worker told the publication the China Food and Drug Administration (CFDA), “Is actively working on [the policy].”

Online Marketplace

Presently, state-run nonprofit hospitals sell about 70% of all prescription drugs sold in China. The rest are purchased through retail pharmacy locations. The new policy could work to liberalize pharmaceutical distribution in China by opening up a new avenue for prescription drugs sales.

It is unclear how China will regulate online sales of prescription drugs; however, it appears that at least initially the drugs sold online will be limited to those on a government list. It also remains to be seen whether the policy will allow for direct-to-consumer sales, business-to-business, or through a government or middleman-run hub.

Regulating Online Pharmacies

Online pharmaceutical sales are nothing new in China, and many jurisdictions regulate what types of drugs may be sold online. The Internet is also a major source for black market drugs (anyone who regularly checks their spam folder can attest to this) whose safety and efficacy cannot be vouched for. Drugs purchased through rogue or unregulated online pharmacies run the risk of being counterfeit, adulterated, misbranded or mislabeled, which can result in serious unintended side effects or death.

By creating a regulated environment for online pharmacies, regulators can provide legal alternatives to rogue pharmacies on the web.

Another Area of Reform

In spring 2014, China’s National Development and Reform Commission (NDRC) announced it would be lifting price controls set on over 500 low-cost and essential drugs. The move was seen as an effort to ease shortages of a number of drugs following a highly publicized shortage of the hyperthyroid drug Tapazole. Some experts cautioned that removing the price controls may not reduce shortages, citing China’s Centralized Bidding Procurement (CBP) process as a source of pricing pressure. In China, all state-run hospitals are required to use the CBP when purchasing most types of drugs.

Reuters