Government Tightens Control in the E-Pharmacy Industry in Direct Selling of Online Medicines
Alibaba Group Holdings Ltd. has suspended their online sales of medicines in their Tmall platform as the government tightens the control in the e-pharmacy industry as industry watchdogs said that consumers interest are not safeguarded as well as they hoped for. Tmall, advised online vendors that the site is stopping online sales of medicines citing the new changes in government regulations. Tmall will also be adjusting their business model that will be based on the new regulation to provide better services to customers within the law.
Changes in the regulation will put to the end Chin’s trial of selling drug related products directly to consumers using online third party platforms. These changes in the regulation does not apply only to Tmall but to other e-commerce companies that are involved in selling drug related products in third party online platforms.according the website of China Food and Drug Administration which stated that it is still unclear which party, meaning the e-commerce site or online vendor will take responsibility if the drug related products is sold online through third party platforms.
It is difficult to monitor the quality of these drug related products that are sold this way and it is not possible in protecting the interests of consumers and ensuring the safe usage, thus the decision to end trial operations was made. Analysts say that that regulations will not hurt Tmall medicine business since its 20 percent of the sales are drug related products, while the remaining 80 percent are health care products or medical equipment. Although the regulation is a setback in the online pharmacy industry, many of the brick and mortar drug chains are still allowed to sell medicine to consumers directly online.