China FDA's troubled system to root out fake drugs gets high-level scrutiny

Questions are being raised and quick answers sought about the next steps on fake drug monitoring in the wake of China FDA's move to place the rollout of its barcode system designed by a unit of Alibaba Group ($BABA) on a moratorium. 

Alibaba chairman Jack Ma

The move by China FDA was sparked by industry complaints it gave the e-commerce giant's Hong Kong-listed Alibaba Health Information Technology, or Ali Health, an unfair advantage in the still-in-progress process of selling prescription drugs online.

Some of those issues were raised at the annual legislative meeting last week of Chinese leadership where health policy is a key focus, China Daily reported.

"For pharmaceutical enterprises, a market with fair competition is important," Wei Feiyan, board chairwoman of Guangxi-based Huahong Pharmaceutical and a deputy to National People's Congress, said according to China Daily.

"But a fair market cannot come out of nothing. You need fair rules and strict implementation of them."

She added that: "I advise the CFDA to introduce a new tracking system with more detailed columns ... and please be as quick as possible. Between the two regulating systems there is a short period without supervision and let's prevent illegal medicine producers from taking advantage."

The comments were directed at the troubles of Product Identification, Authentication and Tracking System known as PIATS, which as Caixin Online said in a lengthy article, is still vehemently opposed by the drugstore owners.

Their complaints led the China FDA on Feb. 20 to suspend operations just two months after a nationwide rollout that would see each package of approved medicine carry a unique barcode to track it from factory to sale point, Caixin said.

The cost for brick-and-mortar drug stores to adopt the system was a key complaint as was the related issue of allowing a direct competitor, an online service, to design a regulatory product, Caixin said.

Under the terms of the contract, China FDA owns the system and has full management rights. But the drugstores are convinced the service aids in tracking drug distribution data that would be useful for Ali Health to identify sales patterns.

Ali Health has said it is working with China FDA to address any concerns.

- here's a story from China Daily
- and one from Caixin Online