Alibaba Health Announces Construction of an Open, Market-Oriented Third-Party Drug Traceability Platform

On May 10, following the release of the “Opinions on Further Improving the Food and Drug Traceability System (Draft for Comment)” by the China Food and Drug Administration, Wang Peiyu, Vice President of Ali Health, announced that Ali Health would establish an open, market-oriented third-party traceability platform. Leveraging its extensive experience and technical capabilities in building traceability systems, Ali Health aims to collaborate with regulatory authorities, pharmaceutical companies, industry organizations, third-party technology service providers, and the public to construct a traceability ecosystem designed to prevent counterfeit drugs.

“Over the past two years, we have invested nearly RMB 100 million in upgrading and enhancing the electronic drug supervision network, as we believe that internet technology and big data are the most effective means of preventing counterfeit medicines. Although we encountered some skepticism and obstacles during this process, our original commitment to cracking down on counterfeit drugs has remained unwavering. Following the release of the Draft Opinion by the State Administration, we are willing to share our technological and data capabilities with industry stakeholders and consumers, working together to establish a third-party traceability system that encourages public participation and ensures full traceability,” said Wang Peiyu.

Alibaba Health’s new traceability platform, currently under development, is expected to officially launch its version 1.0 within one month. To minimize costs for participating enterprises, the new platform will be fully compatible with the technical standards of the “China Drug Electronic Supervision Code.” Meanwhile, healthcare institutions and pharmaceutical companies previously registered on the former China Drug Electronic Supervision Network will be granted free access to the new platform. Furthermore, Alibaba Health will waive fees for basic traceability services—such as code issuance and distribution tracking—for participating enterprises over the next three years, charging only for technical support services including data storage and API calls.

Wang Peiyu stated that, while ensuring the technical support costs for the new traceability platform itself, Alibaba Health will continue to increase its technological investment. It will gradually upgrade multiple technical indicators, including code standards, interface openness, and platform security, thereby making the platform more cost-effective, scalable, and feature-rich. Alibaba Health previously demonstrated robust technical capabilities in the operation and maintenance of the Drug Electronic Supervision Network. Reports indicate that in 2015, following the architectural restructuring and optimization by Alibaba Health, the Drug Electronic Supervision Network achieved a twenty-fold increase in system processing speed despite a nearly four-fold increase in data volume compared to three years prior, significantly improving efficiency and reducing costs.

In response to the “Shandong Problematic Vaccine Incident,” Wang Peiyu emphasized the social responsibility that a new traceability platform should uphold. “It is not easy to run a business, and it is even more challenging to operate one with a strong sense of social responsibility. However, given that Alibaba Health operates in the pharmaceutical industry, which directly impacts public health and safety, we are willing to rise to the challenge.” He stated that Alibaba Health would provide permanent, free traceability services for vaccine products manufactured by enterprises. Additionally, Alibaba Health would offer the public permanent, free access to drug distribution tracking services. In the event of a drug safety incident involving companies registered on the Alibaba Health traceability platform, Alibaba Health will fully cooperate with these enterprises in fulfilling their traceability obligations. By leveraging intelligent monitoring and data analytics within the traceability system to pinpoint drug distribution channels, Alibaba Health aims to minimize harm and losses to both the public and the enterprises involved.

Wang Peiyu stated that the aforementioned decision was made because the suspended drug electronic supervision network continued to play a positive role in the Shandong vaccine incident. According to media reports, following the outbreak of the vaccine incident, Ali Health actively cooperated with and provided analysis on the flow of vaccines to suspicious enterprises, as required by the China Food and Drug Administration (CFDA).

In Wang Peiyu’s view, to maximize the value of the new open traceability platform, it must evolve into an ecosystem built through broad participation: collaborating with industry associations to achieve joint industry participation and co-management; leveraging technology and personalized services to enable enterprises to experience diverse application scenarios for product management and marketing on the traceability platform; and empowering ordinary consumers to access information on drug origins and exercise their right to know about drug distribution channels simply by scanning a QR code with their mobile phones.

In this regard, he revealed that within the new traceability ecosystem, both enterprises and individuals will enjoy enhanced services. To address the personalized needs of pharmaceutical manufacturers, Ali Health will collaborate with third-party application service providers to use traceability codes as a gateway, connecting the information link between enterprises and the public. This will provide enterprises with customized value-added services such as member management, patient education, and interactive marketing. To meet the public’s demand for drug information queries, drug query interfaces will be opened to widely used social applications such as Mobile Taobao and WeChat. Furthermore, the recent incident involving 17,000 cans of counterfeit infant formula exposed the difficulties in food traceability. The new traceability platform may expand its system to cover food and agricultural products in the future, achieving “farm-to-table” traceability to ensure food safety.

Attachment

　　Opinions on Further Improving the Food and Drug Traceability System (Draft for Comment)

To thoroughly implement the Food Safety Law of the People's Republic of China, the Drug Administration Law of the People's Republic of China, the Regulations on the Supervision and Administration of Medical Devices, and other laws and regulations; to enforce the “four strictest” requirements for food and drug safety; and to adhere to the spirit of the Opinions of the General Office of the State Council on Accelerating the Construction of Traceability Systems for Important Products (Guo Ban Fa [2015] No. 95), in accordance with the working principles that the State shall establish traceability systems, enterprises shall establish traceability frameworks, and enterprises are encouraged to employ information technology to collect and retain production and operation information, the following opinions are hereby proposed to further improve the food and drug traceability systems:

I. The food and drug traceability system is an important component of the food and drug quality management system. Establishing a food and drug traceability system is the primary responsibility of enterprises and serves as a critical measure to effectively control product safety risks and safeguard the legitimate rights and interests of consumers.

II. The purpose of establishing a traceability system for enterprises is to facilitate timely product recalls and risk prevention and control in the event of product quality issues; it also enables distributors and consumers to verify product authenticity, thereby facilitating claims for compensation when consumer rights are infringed.

III. Food and drug manufacturers shall adopt appropriate methods for recording or labeling the sources of raw and auxiliary materials and the distribution channels of their products, accurately monitor the quality of such materials and the destination of product sales, and retain relevant records and documentary evidence in accordance with applicable laws and regulations.

IV. Food and drug business operators shall adopt appropriate methods for recording or labeling the products they purchase and sell, accurately track the sources of product procurement and the destinations of sales, and retain relevant records and documentary evidence in accordance with applicable laws and regulations.

V. Medical device user facilities shall adopt appropriate recording or labeling methods for purchased medical devices to track their sources of procurement; for Class III medical devices, original documentation must be properly retained to ensure traceability of information; usage records shall be established for implanted and interventional medical devices, with permanent retention of usage records for implanted medical devices and effective management through computerized systems.

VI. Food production enterprises shall strictly comply with legal and regulatory requirements, establish a food safety traceability system, and ensure the traceability of food products. Manufacturers of pharmaceuticals and medical devices shall strictly adhere to Good Manufacturing Practice (GMP), while distributors shall strictly implement Good Supply Practice (GSP), to guarantee that data generated during production and distribution processes are authentic, complete, and traceable.

VII. When the legitimate rights and interests of consumers are infringed, they may claim compensation from the seller or the manufacturing enterprise. Food and drug production and operation enterprises that receive compensation claims from consumers shall bear primary liability and seek recourse from the relevant responsible parties through the traceability system.

VIII. Appropriate traceability methods shall be adopted based on the distinct attributes, risk levels, and legal and regulatory requirements of food and drugs.

Food production and operation enterprises shall prioritize the establishment of traceability systems for categories such as infant formula, meat products, dairy products, edible vegetable oils, and baijiu (Chinese white spirits), implementing these measures on a categorized basis.

Pharmaceutical manufacturing and trading enterprises must carefully review and document operations related to material procurement, production, testing, release, as well as drug procurement, inspection and warehousing, storage maintenance, and sales distribution, ensuring that all records are complete, accurate, and authentic, and manage them effectively using computerized systems.

Medical device manufacturers, distributors, and user institutions shall prioritize the establishment of traceability systems for high-risk medical devices, such as implantable devices, and are encouraged to adopt universally applicable product identification methods.

IX. Food and drug regulatory authorities at all levels below the provincial level shall, in accordance with the provisions of relevant laws and regulations such as the Food Safety Law of the People's Republic of China, the Drug Administration Law of the People's Republic of China, and the Regulations on the Supervision and Administration of Medical Devices, urge relevant enterprises within their respective administrative regions to earnestly fulfill their primary responsibilities for product traceability, and supervise the implementation thereof. Illegal and irregular activities shall be investigated and corrected in a timely manner.

10. Encourage food and drug production and operation enterprises to apply information technology to establish traceability systems. Encourage information technology enterprises, as third parties, to provide professional product traceability services for production and operation enterprises. Food and drug regulatory authorities at all levels shall not mandate that food and drug production and operation enterprises accept traceability services from designated professional information technology enterprises.

XI. Support industry associations in organizing enterprises to establish traceability information query platforms, and promote the interconnectivity of information systems and information sharing among associations, enterprises, and government agencies.

XII. Manufacturers and distributors of narcotic drugs and psychotropic substances shall establish a traceability system in accordance with the requirements for the monitoring information network stipulated in the Regulations on the Administration of Narcotic Drugs and Psychotropic Substances. Specific provisions shall be formulated separately by the China Food and Drug Administration.