Alibaba Group Holding Ltd (NYSE:BABA) AliHealth To Offer Drug Tracking Software

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Alibaba Group Holding Ltd (NYSE:BABA) subsidiary AliHealth will be launching their revamped drug-tracking software that allows consumers to check products voluntarily listed by drug companies.

AliHealth, the healthcare arm of the Alibaba Group listed in Hong Kong, updated the software after it was stopped by China Food and Drug Administration last February. China’s FDA has previously asked for comments about a new drug tracking system to help the leadership’s crackdown on counterfeit drugs.

China has been fighting the onslaught of illegal and adulterated drugs in the country after pressure has been mounting from citizens. The application is owned by the government and is aimed towards identifying counterfeits, resold drugs, and is to discourage illegal manufacturing companies. However, the association halted the operation of the AliHealth’s system after it decided to make changes to existing rules. The amendments will allow other tracking methods for medicines to be traced back to their origins.

The new version will be released within a month, according to Marbridge Consulting, and will feature the use of a barcode method drug tracking system. Those who wish to sign up for the first time may enjoy waived fees for the first three years when they sign up. Those who signed up with the old version will not be charged for transfer to the new version.

The group’s pharmacy business will also not be integrated into the system anymore, contrary to their April 2015 announcement. The deal was priced at $2.5 billion, given the growth of online health-related businesses. In fact, a three-hour delivery service of health care products, including over-the-counter drugs, was already being assessed.

Alibaba shares plummeted last February after China FDA scrapped their proposed drug tracking system. Shares fell by 14% to HK$4.14 in Hong Kong due to the announcement. Earlier, stock price declined by 20% after the China FDA announcement of their plan to scrap AliHealth’s operating rights for the system. Revenue from the platform accounted for almost the whole of AliHealth’s revenue for the year ended last March 31, 2015.

The drug PIATS, which stands for product identification, authentication and tracking system, is also being planned to be used in the food industry.

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