111 Group Partners with Eli Lilly to Expand into China's 'Fourth Terminal' Healthcare Market

Investment Circle (WeChat ID: pedaily2012) reported on July 10 that 111 Group, the first Chinese internet healthcare company to list in the U.S., has entered into a comprehensive and in-depth strategic partnership with multinational pharmaceutical giant Eli Lilly and Company, becoming Eli Lilly China’s “Cialis Strategic Partner.”

As the “4+7” volume-based procurement policy continues to be implemented and prescription outflow accelerates, the out-of-hospital market, particularly new pharmaceutical retail channels, is receiving unprecedented attention from pharmaceutical companies. Senior executives at Eli Lilly China stated that the share of chronic disease prescription drugs in China is gradually shifting toward the out-of-hospital market, and Eli Lilly is seeking strategic partners for innovative models.

It is understood that 111 Group became a first-tier distributor for Eli Lilly China in 2018. The two parties deepened their cooperation this January by signing a Strategic Cooperation Memorandum of Understanding. They will engage in in-depth collaboration focusing on key areas such as the development of the “fourth terminal” in pharmaceutical distribution, big data, electronic prescriptions, doctor-patient services, and patient education, while also exploring innovative cooperation models in areas including online medical insurance reimbursement and Pharmacy Benefit Management (PBM).

In the early stage of cooperation, 111 Group leveraged technologyPeaceLeveraging its channel advantages to help Eli Lilly rapidly achieve coverage of its product Cialis in private hospitals, Eli Lilly has entrusted the entire private hospital channel for this product to 111 Group for operation. Both parties jointly engage in channel development and maintenance, and provide patient education training for hospitals. Furthermore, starting this year, 111 Group has begun undertaking the distribution of Cialis for some of Eli Lilly’s major e-commerce platforms.

Senior executives at 111 Group revealed that the scale of collaborative performance between 111 Group and Eli Lilly is expected to double this year, driving a 40%–50% incremental growth in sales of Eli Lilly’s Cialis.

As of March 31, 2019, 111 Group had established direct-procurement strategic partnerships with 98 renowned pharmaceutical companies both in China and abroad, providing services to over 170,000 pharmacies. The B2B business has become a key driver of revenue growth for 111 Group.