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Blog
The past, present and future of China’s internet healthcare ecosystem
Jul 05, 2021
As China recovers from the economic drawbacks caused by the COVID-19 pandemic, we can take a step back and see impact to the development of internet medicine. Much like the effect of SARS on e-commerce in 2003, where e-commerce giants like JD and T-mall (Alibaba) boomed at exponential rates, the COVID-19 pandemic has been a catalyst of growth.
Both encouraging government regulatory policies and innovative technologies, have stimulated the quick growth of internet hospitals. The trigger for the e-commerce boom and rise of internet hospitals is the same: consumers needed safe, efficient, convenient access to products or treatment with minimum human contact. Before 2010, China’s policies did not enable internet hospitals or the ability to purchase medicine online. However, e-commerce platforms started to test the waters of internet hospitals by selling over-the-counter (OTC) products on-line, and the policy changed to allow this but only on selected platforms. Despite a State Food and Drug Administration (SFDA) ban on online prescription drug sales, the “Healthy China 2030” policies highly prioritized internet healthcare at a national strategic planning level. In addition, 5 SFDA approved provinces started to test “distant diagnosis and treatment”.
Finally, in 2018 the ban on selling Rx drugs online was revoked, and was followed by policies and regulations on medicine selling, distant diagnosis and treatment, etc. While, COVID-19 was a catalyst, China was already ready for internet hospitals. During COVID-19, the State Council, the National Health Commission and the National Insurance Bureau emphasized the importance of aggressively expanding and growing the internet hospital practice, backed by Basic Medical Insurance (BMI).
Is China benefitting fully from what internet hospitals have to offer? In reality, this is just the beginning. Eventually there will be a complete internet healthcare ecosystem, with different players contributing and building into the system. Presently, the majority of online sales under the internet hospital umbrella are medicines, ─overall drug sales accounts for over 85% of all internet hospital sales. Other related services such as online registration, consultation, diagnosis and treatment are either not mature enough or limited by a difficulty to see any profit potential.
However, there will be change in China for a more complete internet hospital ecosystem in the near future. The concept of internet healthcare will, over time, grow in scope, acceptance and adoption. The near future will offer us a complete picture put together by pieces from providers in hardware, software, digitalization, AI, big data, among other elements.
For more information on internet hospitals, please feel free to contact us.