Online drug sale plans in China see furious smoke, no fire yet

China drug regulators have provided no clue as to when they will allow online sales of prescription drugs, but the players who would be involved and those with a vested interest are positioning themselves to be ready. The clearance is expected sometime this year.

China's drug market is estimated at $149 billion, about 75% of the sales to hospitals where kickbacks and other corruptive practices have drawn the attention of a government that has made a reduction of corruption the linchpin issue of its term. Changes in the hospital purchasing procedures recently were put in place around the country.

Analysts and others watching the transition both occurring and planned told Bloomberg it could take years for the government to work through all the problems associated with online sales of prescription drugs. They must, for example, ensure that the drugs sold are not counterfeit or substitutes, have a way of authenticating that the proffered prescription is real, determine how reimbursements would be made and determine the impact on public hospitals that still rely largely on profits from sales for their financial support.

Alibaba ($BABA), the nation's giant Internet company, and Shanghai Pharmaceuticals, the nation's largest medicine distributor, are poised to compete in the online market for prescriptions. Alibaba has begun selling over-the-counter drugs and has readied social media with apps to conduct transactions.

Major pharmacy chains across China also are gearing up for online sales to allow them to expand beyond their current territories to national sales.

- here's the story from Bloomberg