Alibaba Health back with new tracking system in China

The healthcare subsidiary of Chinese e-commerce conglomerate Alibaba has re-launched its drug-monitoring system in China after the country abandoned the firm’s tracking setup earlier this year.

The original system, which had been mandated by the government, electronically authenticated drugs that were made, distributed and sold in China but following a lawsuit and complaints it was restrictive and gave Ali Health an unfair competitive advantage, China's Food and Drug Administration dropped the Product Identification, Authentication and Tracking System (PIATS) in February. The move also followed a review of the country’s tracking requirements.

The loss of the exclusive contract was unfortunate as the firm's operational revenues had been largely dependent on the system, according to the firm’s recent annual report from 2015.

But in May, Ali Health announced it had developed a new version of the software, which was then quietly launched on 13 June.

Called "Mashang Fangxin", a homophone for "immediate relief" in Mandarin Chinese, the platform claims to be compatible with China's tracking standards as specified by the China Food and Drug Administration. The system will provide tracking services for manufacturers and distributors to ensure product quality and safety, and will also allow the public to verify their medical products.

When reports of the new software were first published, it was reported that the transition to the new platform would be free for companies that had previously signed up for the system, with all users exempt from tracking fees for the first three years, other than those collected for technical support concerning data storage or interface interchanges. The service was also to be free for use by the public.

However, the FT recently cited a Chinese report by newsmagazine Caixin, that said Ali Health was changing its registration fee from an annual sum of Rmb300 to monthly payments of Rmb200 with an annual cost of Rmb2,400.

Medicine tracking in China has come under fire in recent times and has been fraught with scandals. There are currently concerns over the robustness of the serialisation and reporting requirements. In response, the Chinese Government sought feedback on proposed changes to the system earlier this year.