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Direct-to-patient pharma firm Yiyao eyes expansion after acquisition

COLDSKY.CN – Shanghai Pharma is expected to accelerate its growth in e-commerce of prescription drugs through its booming unit Shanghai Pharmaceuticals Health Cloud after acquiring Cardinal Health China’s pharmaceutical and medical product distribution business.

Shanghai Pharmaceuticals Health Cloud, developed from a major DTP (direct-to-patient) network by the national industry group now called Yiyao for short, combines both online solutions and offline retail resources over three platforms — “electronic prescriptions”, “drug data” and “patient data” — that are the center of its business model.

Patients, especially those with chorionic illnesses, can get prescription drugs delivered directly to their homes after seeing a doctor, freeing them from the trouble of queuing in China’s often crowded hospitals. For their part, hospitals can also reduce the burden of running a pharmacy.

The bigger policy backdrop, however, is that Chinese authorities are pushing for a separation of prescription drug sales away from hospitals that often rely on the sales for revenue, which can lead to over-prescription of medicines and medical tensions. The long-term aim of the medical reform, slow progress so far, is to allow patients to choose between hospitals and retail pharmacies for prescription drug purchases.

Yiyao, supported by Shanghai Pharma’s own retail pharmacies, adopts the e-commerce model to provide all-encompassing services offering diverse prescription drugs and health management for three stakeholders – patients, hospitals and drug retail stores.

On its official websites, Yiyao said it has established cooperation with more than 200 hospitals in Shanghai connected to its centralized distribution center and runs nearly 40 drug stores in 13 provinces. It plans to open the first such hub in Guangzhou this year.

Among other services, Yiyao app users can also get interest-free deals, receive training or donate drugs for public good. The acquisition of Cardinal Health China, the second largest DTP network with 30 stores, will further expand its DTP business.

Yiyao runs its own cold-chain logistics system for the medical products distribution, but SF Express and JD.com couriers help deliver ordinary dugs.

Yiyao finished a round of Series A fundraising in 2015 from Shanghai Pharma, JD.com and IDG Capital Partners. According to the agreement, China’s second-largest e-commerce website JD.com will launch a drug wholesale B2B platform targeting retail outlets, and small and medium-sized medical institutes. In 2016, Yiyao secured a 135 million yuan investment from SBCVC and Shanghai Shengtai Investment Management under the Shanghai Charity Foundation. Then in June last year, Yiyao and Tencent entered into strategic cooperation in the fields of digital payment for electronic prescriptions and health insurance.

(Contact the author ukingsun@qq.com/WeChat:ukingsun)

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