China FDA stops online med sales

Industry watchdog says that consumers' interests could not be well safeguarded

Chinese e-commerce giant Alibaba Group Holding Ltd has ceased online sales of medicines on its Tmall platform as the government tightens its control over the country's nascent e-pharmacy industry.

Tmall, the business-to-consumer site of Alibaba, told its online vendors that the site will stop the online sales of medicines as of August 1, citing changes in government regulation.

Tmall said in a statement that it will "adjust its business model based on the new regulation in order to provide better service to customers within the law".

The change of regulation put an end to China's trial of selling drugs products directly to consumers via online third-party platforms. The change of regulation does not apply only to Tmall. Other e-commerce companies involved in selling drugs on third-party platforms, such as Yhd.com have also received the same ban.

A news report posted on the official website of China Food and Drug Administration said that "it is unclear which party (the e-commerce site or the online vendors) should take responsibility when drug products are sold online via third-party platforms".

"It is difficult to monitor the quality of drug products sold this way and it is not possible to protect the interests of consumers and ensure safe usage of drugs. Therefore, we decided to end the trial operation", said the report.

Analysts said that the regulation will not significantly hurt Tmall's medicine business, as only an estimated 20 percent of its sales are drug products. The other 80 percent are health products and medical equipment.

"However, the regulation is a setback for the country's online pharmacy industry," said Lu Zhenwang, an independent internet expert and chief executive officer of the Shanghai-based Wanqing Consultancy.

"Many of China's brick-and-mortar drug chains are allowed to sell medicine to consumers directly online. But they are too small to make a big impact," he said.