Alibaba, other e-retailers may foray into Rx drugs in China
- The China Food and Drug Administration could approve Internet sales of prescription drugs by the end of the year, according to Bloomberg.
- Chinese consumers are profligate Internet shoppers and feel comfortable buying everything from high-end jewelry to very personal items online.
- Assuming that the Chinese government opens up Rx sales to e-retailers, one major player will most likely be Alibaba Group Holding, Ltd.
One major impetus driving the Chinese government to consider e-retailing for prescription drugs, a $149 billion market in China, is that fact that hospitals have a stranglehold on the prescription drugs market in the country. In fact, hospitals sell about three-fourths of all prescription drugs in China, which amounts to a monopoly.
The biggest downside to that monopoly is government corruption and higher prices for consumers. Therefore, allowing companies such as Alibaba and Shanghai Pharmaceuticals Holding Co., the second biggest medicine distributor in China, would bode well for a more competitive pricing landscape for consumers—and help the process of healthcare-related reform that is currently underway in China.