group of Chinese pharmacy chains has demanded the abolition of a
medicine tracking platform run by Alibaba Health Information Technology,
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, 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 Guoda Drugstore,
China Jo Jo Drugstores Inc and Laobaixing Pharmacy Chain.
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.
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).
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.