Fan Rong: Pathways to Legalizing Electronic Prescriptions

Fan Rong is the Director of the Office for Doctor-Patient Relations at Beijing Tsinghua Changgung Hospital. With a background as a clinician, he later transitioned into hospital administration and has many years of experience in handling medical disputes. He offers his own insights and perspectives on legal and medical matters, hoping to share them with others for mutual improvement.

At the end of last year, an internet-based electronic prescription issued in Wuzhen, billed as “China’s first,” sparked widespread discussion. Many viewed this as a loosening of restrictions on the online purchase of prescription drugs, especially since the national draft for public comment mentioned considering the appropriate relaxation of regulations on online sales of prescription medications. In reality, there may be significant discrepancies between the draft and the final official document, so the ultimate outcome remains to be seen.

There are currently several models for electronic prescriptions; however, certain models may run afoul of laws and regulations during implementation. All stakeholders aim to develop their businesses within a legal framework. How, then, can current electronic prescription practices be rendered compliant? In the absence of explicit provisions in existing laws and regulations, it is imperative to explore pathways toward their legalization.

The Necessity of Applying Electronic Signatures to Electronic Prescriptions

• Prescriptions and medical records should both be classified as medical documentation.

Article 2 of the Measures for the Administration of Prescriptions defines a prescription as follows: A prescription is a medical document issued by registered licensed physicians during the course of diagnosis and treatment, reviewed and dispensed by qualified pharmaceutical professionals, and serving as proof for patients. Prescriptions are medical documents, including medication order sheets for inpatient wards in medical institutions.

Article 16 of the Basic Standards for Medical Record Documentation stipulates the content of inpatient medical records, listing numerous items, including physician order sheets. This creates a contradiction.

In the common perception of most people, prescriptions are used in outpatient and emergency settings, with the new A5-sized format referred to as a “prescription,” while “medical records” typically refer to inpatient medical records. However, it becomes evident that there is an area of overlap: the medication order sheet for inpatients. This order sheet functions both as a prescription and as part of the medical record. Furthermore, according to the Basic Data Set for Electronic Medical Records issued by the National Health and Family Planning Commission, the third section is titled “Outpatient and Emergency Prescriptions.” This indicates that, when issuing relevant documents, the national authorities have explicitly defined outpatient and emergency prescriptions as an integral component of electronic medical records.

Furthermore, from the perspective of the definition itself, Article 2 of China’s “Provisions on the Administration of Medical Records in Medical Institutions (2013 Edition)” defines medical records as an integration of textual data, symbols, charts, imaging slices, and other materials generated by healthcare personnel during medical activities. In other words, all forms of documentation produced during the diagnosis and treatment process should be considered part of the medical record.

Therefore, regardless of whether prescriptions are classified as part of the medical record in our country, at a minimum, both prescriptions and medical records should be considered medical documents.

Medical record documentation refers to the process by which healthcare professionals summarize, analyze, and organize information obtained through medical activities—such as patient interviews, physical examinations, auxiliary tests, diagnosis, treatment, and nursing care—as well as relevant data, thereby creating records of these medical activities. From this perspective, when physicians prescribe medications, they are, in effect, documenting medical record information as part of their clinical practice.

Therefore, we can more confidently assert from a definitional standpoint that both prescriptions and medical records constitute medical documentation. Furthermore, to some extent, prescriptions can even be classified as part of the medical record.

• Evidentiary Attributes of Medical Records

Why have we elevated the importance of medical documentation to an unprecedented level? This shift can be traced back to the 2002 Regulation on the Handling of Medical Accidents, which accorded greater legal status to medical records, designating them as foundational materials for the assessment of medical accidents. In the same year, the Supreme People's Court issued the Provisions on Several Issues Concerning Evidence in Civil Litigation, which explicitly established the principle of reversal of the burden of proof in tort lawsuits involving medical practices. In other words, healthcare institutions bear the burden of proving that they did not cause harm to patients. If a patient raises reasonable doubts and the healthcare institution fails to demonstrate its non-liability, it may be held liable. Thus, the burden of proof rests with the healthcare provider, not the patient.

In 2010, the principle of reversal of the burden of proof was abolished and replaced by the principle that “the party making a claim bears the burden of proof.” This shift indirectly reflects a significantly heightened national emphasis on medical documentation. Consequently, in 2002—the same year the Regulations on Handling Medical Malpractice were promulgated—the former Ministry of Health issued the Basic Norms for Medical Record Writing (Trial Implementation) to standardize medical record documentation practices in healthcare institutions, improve the quality of medical records, and ensure medical quality and patient safety.

In 2007, the state promulgated the Measures for the Administration of Prescriptions, also aimed at standardizing prescription writing. With the revision of the Basic Norms for Medical Record Writing in 2010, China’s current two major regulatory frameworks governing prescriptions and medical records were established, thereby imposing legal and mandatory requirements on the documentation of medical records.

• Legality and Necessity of Electronic Signatures

The Electronic Signature Law of the People's Republic of China, promulgated in 2005, establishes electronic signatures as a means of certifying the legal validity of data messages. Against this backdrop, China subsequently issued the Basic Specifications for Electronic Medical Records (Trial).

Article 7 of the Electronic Signature Law: Data messages shall not be denied admissibility as evidence solely on the grounds that they are generated, sent, received, or stored by electronic, optical, magnetic, or similar means.

Therefore, data messages are admissible as evidence.

Article 8 specifies certain factors for the authentication of evidence. First, the reliability of the method used to generate, store, or transmit data messages; second, the reliability of the method used to maintain content integrity; third, the reliability of the method used to identify the sender; and fourth, other relevant factors. Only when these four factors are satisfied may the evidence be admitted.

Why do we need to implement this for our electronic prescriptions? Because a prescription is, in itself, a medical document. Currently, many practices in internet-based healthcare are skirting the edges of China’s relevant medical laws and regulations. In particular, there remains ongoing debate regarding the distinction between consultation and diagnostic/treatment services. With the issuance of China’s first internet-based prescription, internet healthcare activities have become increasingly integrated into the nation’s overall medical practice.

Why Are E-Prescriptions So Popular Now? Because They Symbolically Serve as a Gateway to Internet Healthcare.

Where there is medical practice, there is risk; this is why medical documentation serves as a key element of legal evidence. Since medical records are admissible as evidence, electronic health records (EHRs) and electronic prescriptions must necessarily be treated as such as well. To serve as valid evidence, data messages in this format must possess the four aforementioned criteria.

What measures must be taken to render data messages admissible as evidence in legal proceedings? According to Article 2 of the Electronic Signature Law, the answer is to employ electronic signatures.

Electronic signature is an authentication tool for data messages. Only data messages authenticated by electronic signatures are valid and possess legal evidentiary effect.

Article 14 of the Electronic Signature Law explicitly stipulates that reliable electronic signatures have the same legal validity as handwritten signatures or seals. A prescription is a medical document, and medical documents serve as evidence; therefore, a prescription constitutes evidence. For an electronic prescription to also serve as evidence, it must utilize a reliable electronic signature.

So, what benefits can electronic signatures bring us? Why do they carry legal validity?

First, it can verify the identity of the physician who signed the electronic medical record; second, it can attest to the authenticity of the content of the electronic prescription; third, it enables physicians to assume responsibility for the accuracy and completeness of the electronic prescription.

Under what conditions can an electronic medical record be considered a true electronic health record?

Reliable electronic signatures, trusted timestamps, and standardized documentation and usage procedures for medical records are mandatory. Only when these three conditions are met can an electronic medical record be considered legally valid in the true sense.

Similarly, electronic prescriptions must also meet these three conditions.

What is a reliable electronic signature? It must meet four conditions.

First, the data used to create an electronic signature must be exclusively owned by the signatory when the electronic signature is applied. Second, the data used to create the electronic signature must be controlled solely by the signatory at the time of signing. Third, any alteration to the electronic signature after signing must be detectable. Fourth, any alteration to the content and form of the data message after signing must be detectable.

What does this mean? We regard the electronic signature as the pen in our hand. For a signature to be legally valid, four conditions must be met: First, I must use my own pen, not someone else’s. Second, I must maintain control over the pen throughout the signing process. Third, after signing, I must be able to detect whether anyone has altered my signature. Fourth, I must be able to determine whether the content of the signed document has been tampered with by others. Only when these four criteria are satisfied can I confirm that the signature is indeed mine.

• Definition of Electronic Prescription

In fact, China currently has no official definition for electronic prescriptions, with only a standardized definition available for electronic medical records (EMRs). According to the Basic Specifications for Electronic Medical Records (Trial), EMRs are defined as digitized information—including text, symbols, charts, graphics, and data—generated by healthcare professionals using medical institution information systems during medical activities. These records serve as a fundamental form of medical documentation and support storage, management, transmission, and retrieval.

An electronic prescription is defined as a digital medical document issued by physicians for patients during diagnosis and treatment using an information system, capable of being stored, managed, transmitted, and reproduced; it is subject to pharmacist review, dispensing, and verification, and serves as proof of medication for the patient. Electronic prescriptions can be stored, transmitted, managed, and reproduced among medical institutions, patients, pharmaceutical retail outlets, and insurance institutions via networks, mobile communications, data storage devices, and other means.

Note the four terms “storage, management, transportation, and reproduction”; this is one of the distinctions between electronic medical records (EMRs) and traditional paper-based medical records, as well as between electronic prescriptions and traditional paper-based prescriptions.

Returning to Article 5 of the Electronic Signature Law, only data messages that meet the following conditions shall be deemed to satisfy the requirements for original form as prescribed by laws and regulations.

To grant electronic prescriptions legal validity, they must be deemed equivalent to original documents. Under what circumstances can electronic data messages be considered as meeting the legal and regulatory requirements for originals?

First, it must effectively present the contained content and be accessible for retrieval and reference at any time; second, it must reliably ensure that the content remains intact and unaltered from the moment of its final creation, although format changes occurring during storage and display do not affect data integrity. In other words, only by ensuring that the issued electronic prescriptions are accessible for retrieval and reference anytime and anywhere, and that their content remains unaltered, can they be considered legally valid electronic prescriptions.

Among these, storage, management, transportation, and reproduction are also required. How to ensure lawful preservation? It is required that the content contained therein can be effectively represented and made available for retrieval and reference at any time, and that the form and format of the data message remain identical to those at the time of its generation, sending, or receipt; or, if the form and format differ, they must still accurately represent the original content generated, sent, or received.

Third, it is capable of identifying the sender and recipient of a data message, as well as the time of sending and receipt.

Only in this way can it be considered compliant with the storage requirements stipulated by laws and regulations. This is why we must impose stricter legality requirements on the use and architecture of electronic prescriptions.

According to China's Prescription Management Measures, prescriptions must be properly retained by the medical institutions that dispense the prescribed medications. Ordinary prescriptions and pediatric prescriptions shall be kept for one year; prescriptions for toxic drugs and Class II psychotropic substances for two years; and prescriptions for narcotic drugs and Class I psychotropic substances for three years, thereby imposing stringent requirements on prescription storage.

If we transition to electronic prescriptions, who should be responsible for their custody, and how should they be stored? This is a practical issue, and we must address the legal concerns surrounding the retention of electronic prescriptions.

Many people, upon hearing the term "electronic prescription," immediately respond: "Isn't our hospital already issuing electronic prescriptions?" Alternatively, some internet companies claim that what they are doing constitutes electronic prescribing. They believe that any transmission of prescriptions via information systems qualifies as an electronic prescription.

In fact, within our medical institutions, we can only refer to these prescriptions as "digitized prescriptions." While all electronic prescriptions are necessarily digitized, only those digitized prescriptions that meet specific criteria and possess legal validity can be truly termed "electronic prescriptions." Previously, when medical institutions used Hospital Information Systems (HIS) or mobile applications to transmit and display prescriptions, these could only be classified as digitized prescriptions, not electronic prescriptions in the true sense.

Current Issues in the Promotion of Electronic Prescriptions

In the first part, I explained why electronic signatures should be applied to electronic prescriptions. Next, I would like to discuss the issues currently faced by existing electronic prescriptions in our country.

• Prescription Out-of-Pocket Purchase Issues




• Issues with Signed Retention Samples




• Drug Formulary Issues




• Prescription Cancellation and Modification Issues




• Prescription Transmission Issues




• Data Security Issues




• Medical Insurance Reimbursement Issues




• Legal Liability Issues




• Prescription Out-of-Hospital Purchase

The First Internet Prescription Is Not a True Electronic Prescription

Why are internet healthcare companies so eager for the relaxation of regulations on online sales of prescription drugs? Because it represents an unpredictable market with substantial profit potential.

Article 42 of the Measures for the Administration of Prescriptions stipulates that, except for prescriptions for narcotic drugs, psychotropic substances, and pediatric patients, medical institutions shall not restrict outpatients from purchasing medications at enterprises with their prescriptions. This demonstrates that national laws have never restricted the external circulation or external purchase of prescriptions; consequently, medical institutions are also prohibited from restricting patients from purchasing medications externally with their prescriptions.

Since policies have given the green light to patients, why are both the general public and pharmaceutical companies eager for the transparent disclosure of prescription drug information? The reason is that although regulations exist, healthcare institutions have failed to implement them. Why have healthcare institutions not complied? There are historical reasons behind this: in the past, healthcare expenditures became so excessive that they reached an unsustainable level for the state. To alleviate this burden, the policy of “subsidizing healthcare services through drug markups” was introduced.

Since then, drug revenue has accounted for the majority of medical institutions’ income. Many medical institutions have developed and continuously expanded under the policy of “subsidizing healthcare with drug profits.” Therefore, under this status quo, it is not easy to obtain a prescription and purchase medications from external pharmacies.

Moreover, a close examination of what is touted as China’s first internet-based prescription reveals a line of fine print at the bottom: “Note: This prescription is valid only for medication dispensing through our hospital’s delivery service. Self-downloaded prescriptions used for obtaining medications elsewhere are not valid.” In other words, although the prescription is provided via an online platform, it holds legal validity only if you use the hospital’s own medication delivery service; presenting this prescription at an external pharmacy to obtain medications is not permitted. Therefore, it is not a true electronic prescription in the genuine sense of the term.

The Separation of Prescribing and Dispensing Policy Drives the Outflow of Electronic Prescriptions

Therefore, for internet healthcare institutions or pharmaceutical retail entities, the primary driver of industry development lies in incentivizing hospitals to liberalize their prescription privileges. To achieve this, the policy of separating medical services from drug sales must be effectively implemented.

When that day arrives, hospitals will no longer be able to generate profits from pharmaceuticals, and the pharmacy department will transition from a former profit center to a cost center. Consequently, healthcare institutions will have less incentive to maintain in-house pharmacies. Therefore, at some point in the future, China’s healthcare institutions will likely follow international models, operating without pharmacies or with only very small ones.

I believe that in the near future, patients will be able to take prescriptions issued by hospitals to retail pharmacies or supermarkets to purchase medications. This is an inevitable outcome of our country’s policy to abolish the practice of subsidizing healthcare services with drug sales. Only then will the springtime of electronic prescriptions truly arrive.

On February 6, 2016, the Beijing Municipal People’s Government issued the Implementation Plan for the Comprehensive Reform of Urban Public Hospitals in Beijing. The plan reiterated the vigorous promotion of the separation of prescribing and dispensing, and proposed exploring pathways that allow patients to autonomously choose between purchasing medications at hospital outpatient pharmacies or at retail pharmacies with a prescription, thereby dismantling the mechanism of subsidizing healthcare services with drug profits. This implementation plan also serves to advance and emphasize the liberalization of prescriptions from national medical institutions.

• Signature and Sample Retention

Why Sign a Prescription?

Signature Specimen Filing is a practical requirement. According to Article 6 of the Measures for the Administration of Prescriptions, the signature and seal of the prescribing physician must be consistent with the specimen on file within the hospital and shall not be altered; otherwise, a new specimen must be filed.

Article 28 of the “Measures for the Administration of Prescriptions” also stipulates that when physicians transmit ordinary prescriptions via computer, they must simultaneously print out a paper prescription. The printed paper prescription shall only be valid after being signed and stamped by the physician. Pharmacists must sign and stamp the printed prescription before dispensing medications.

Why must physicians sign prescriptions? First, to certify that the prescription was issued by them; second, to endorse the content of the prescription; and third, to affirm the completeness of the prescription. Thus, the signature serves both to confirm the physician’s authorization of the prescription and to facilitate the pharmacist’s verification of its authenticity.

If electronic signatures are integrated into the issuance of electronic prescriptions, the scope of their application must be further expanded from medical institutions to include pharmaceutical retail outlets and pharmaceutical logistics providers. Only in this way can we achieve a complete digital replication of the entire traditional workflow for paper-based prescription issuance, dispensing, and distribution.

Electronic Prescriptions Require a "Three-Step" Signature Process

According to Article 38 of the Measures for the Administration of Prescriptions, after completing prescription dispensing, pharmacists are also required to sign or affix their seal on the prescription. This imposes higher requirements on the convenience of electronic signatures in the future: they must be easily applicable not only in medical institutions but also in pharmaceutical retail establishments.

Therefore, a truly meaningful electronic prescription should involve two to three signatures from its creation and transmission to dispensing and issuance. These include the physician’s signature when issuing the prescription, which should contain not only the doctor’s digital information but also that of the medical institution; the pharmacist’s signature during prescription dispensing at retail pharmacies; and, similarly, we recommend that patients also provide a signature upon receiving their medications. This approach establishes a genuine closed-loop system, ensuring complete preservation of the entire prescription process.

• Drug Catalog

The Drug Catalog Is Primarily Influenced by the Medical Insurance Fund

For medical institutions, the drug formulary is not a significant issue; however, it has a substantial impact on retail pharmacies. In China, the drug formulary is heavily influenced by the medical insurance fund.

Article 16 of the “Measures for the Administration of Prescriptions” stipulates that the drug formulary of a medical institution shall be established in accordance with the nature, functions, and tasks of the institution, with the aim of regulating drug management within medical institutions. Furthermore, no more than two specifications are permitted for drugs sharing the same generic name.

However, the adoption of electronic prescriptions would entail a significant shift in this regard. Patients are likely to obtain their medications from retail pharmacies rather than directly from healthcare institutions. Furthermore, generic drug names should be used when writing electronic prescriptions.

E-Prescriptions Break Through the Restrictions of Medical Insurance Drug Formularies

To use an analogy, when I prescribe a sustained-release tablet, it could be from the originator manufacturer, domestic manufacturers, or various smaller manufacturers. Within medical institutions, there may be at most two options available; however, in retail pharmacies, there is a wide variety of such products, with prices varying across different manufacturers. This gives patients considerable choice, which poses significant challenges to the medical insurance system.

In such a scenario, the restrictions imposed by the medical insurance system on the drug formulary would become largely ineffective, thereby breaking the existing rule that limits each drug to no more than two specifications. Furthermore, as reimbursement rates under our medical insurance schemes continue to rise, patients will inevitably opt for higher-priced, more effective medications to maximize their benefits.

• Prescription Cancellation and Modification

Convenience of Refunds and Changes Affects the Implementation of Electronic Prescriptions

Prescription modification and cancellation refer to the process whereby, during prescription review, if a pharmacist identifies inappropriate medication use, they must notify the prescribing physician to issue a new prescription. For electronic prescriptions, this requires a highly efficient channel for prescription transmission; otherwise, cumbersome processing would become a burden.

How Can Electronic Prescriptions Establish a Convenient Channel Between Healthcare Institutions and Pharmaceutical Retailers? In terms of prescription transmission, there are essentially two models: one involves conveying digitized prescription information through an intermediary entity; the other entails direct transmission of prescription data from healthcare institutions to pharmaceutical retailers. The latter approach is more convenient, as it relies on network-based transmission.

• Data Security

Unidirectionality and Non-Replicability Ensure Data Security

Because prescriptions contain our personal medical conditions, diagnoses, and medication information, the greatest risk during online transmission is data security and leakage. This information differs from phone numbers, which can be changed if compromised; it is closely tied to our personal identity, and any leakage would cause significant harm to us.

Moreover, data security issues extend beyond privacy breaches to include the unidirectional flow and non-replicability of data, which are two critical concerns.

Why? A prescription must be non-replicable when transmitted from a medical institution to a pharmaceutical retail outlet. Otherwise, the prescription could be duplicated multiple times, allowing a patient who should only receive the prescribed quantity at one pharmacy to obtain excessive amounts of medication. This is why transmitting electronic prescriptions in the form of photographs, as adopted by some institutions, presents significant loopholes.

Currently, some implementations of electronic prescriptions involve taking screenshots of the prescriptions and transmitting or using them in image format, which poses significant risks. Why? It is extremely easy to manipulate images using Photoshop (PS) technology, and any altered information is difficult to detect by visual inspection alone. Once an electronic prescription is tampered with, it can lead to substantial medical risks.

Therefore, two issues must be addressed during the circulation of electronic prescriptions: first, non-replicability, and second, single-use.

• Medical Insurance Reimbursement

The Impact of E-Prescription Implementation on Restrictions Imposed by Healthcare Security Authorities on Medical Institutions

China has entered an era of universal health insurance coverage. According to 2014 statistics, 97.7% of the national population was covered by medical insurance. Under these circumstances, substantial health insurance funds are required to support healthcare services across the country. If policies were to liberalize external drug purchases and electronic prescriptions, it would necessitate a corresponding relaxation of regulatory controls over medical practices, given that current oversight of healthcare institutions by health insurance authorities is extremely stringent.

Particularly in the realm of prescription issuance, if medical institutions prescribe inappropriate medications or issue excessive quantities, the healthcare security authorities will impose constraints by denying reimbursement. The implementation of online and electronic prescriptions would be hindered by this issue. When patients use electronic prescriptions to purchase medications from pharmacies, payment is made directly to the pharmacy without utilizing healthcare security funds; consequently, the healthcare security authorities lack the mechanism to deny reimbursement. Under such circumstances, the regulatory leverage of healthcare security authorities over medical institutions would be significantly weakened, while the operational flexibility for medical institutions would be substantially enhanced.

Under such circumstances, physicians’ clinical practices and their prescription-writing behaviors are subject to fewer restrictions, which may lead to the emergence of what we have previously termed “excessive prescriptions.” At the very least, the financial constraints on individual physicians would be weakened. In this context, we may in the future encounter instances where electronic prescriptions are outdated or non-compliant with medical insurance policies.

Regulatory oversight by healthcare security authorities should be considered in the implementation of electronic prescriptions.

At that time, whom should we ultimately deny payment to? Should we withhold payments from pharmacies’ revenues, or from healthcare institutions? Therefore, how the medical insurance authorities will implement future controls is also a question we must consider; otherwise, we will face the risk of insufficient medical insurance funds. If our medical insurance fund runs into deficit, it will affect the interests of each and every one of us.

• # Legal Liability

Abolishing the Practice of Subsidizing Healthcare with Drug Profits: Who Bears Legal Liability for Product Defects?

The final issue concerns legal liability, which is a highly practical matter. Article 59 of the Tort Liability Law stipulates that if a patient suffers harm due to a defect in a drug, the patient may claim tort compensation from the manufacturer and also seek compensation from the medical institution.

This legal liability actually stems from the relevant provisions of the Product Quality Law. Whether pharmaceuticals should be considered products of medical institutions is a subject of debate within the legal community. Some argue that pharmaceuticals are tools necessarily used in diagnostic and therapeutic activities, rather than products.

However, others argue that medical institutions rely on the drug markup policy to generate profits from drug sales, a practice that is difficult to distinguish. In fact, the drug markup policy represents a form of state subsidy; because the government cannot fully fund hospitals, it allows medical institutions to subsidize their operations through drug sales. Thus, this mechanism is essentially a form of subsidy rather than a profit-seeking activity by hospitals.

Nevertheless, after the promulgation of the Tort Liability Law, this definition, by reference to the Product Quality Law, ultimately gained recognition from civil law experts in China. However, with the gradual implementation of the policy separating medical services from pharmaceutical sales, the practice of healthcare institutions generating profits through drug markups has been progressively phased out or even abolished. In this context, whether we should still bear strict liability has become an urgent issue we face.

"If we do not have a pharmacy or sell medications, and these products generate no profit for us, why should we still bear strict liability?"

The eight points above essentially represent the current issues encountered in the application of our electronic prescriptions.

Exploring the Legality of Electronic Prescriptions

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Currently, there are many practical forms of electronic prescriptions in China. For instance, the Guangdong Provincial Online Hospital, which emerged early on, followed by Wuzhen Internet Hospital and Ali Health, have all made attempts in the realm of electronic prescriptions. However, each has its own characteristics. The Guangdong Provincial Online Hospital, for example, closely resembles traditional medical consultation processes, whereas Ali Health’s online hospital aligns more with Alibaba’s distinctive features, leaning toward an O2O (Online-to-Offline) model. Through Tmall Pharmacy, Ali Health issues electronic prescriptions via telemedicine services, enabling patients to participate in competitive bidding within the pharmacy platform to purchase medications. This approach reflects what is commonly known as Taobao’s bidding mechanism, which indeed offers certain cost benefits to patients. Nevertheless, questions remain regarding whether this method is lawful, compliant with existing laws and regulations, and whether it genuinely employs electronic signatures with legal evidentiary validity.

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Currently, the most widely used method in traditional medical institutions is the UKey, a USB drive-like device that stores physicians’ personal information. Physicians must insert the UKey into a computer and complete authentication before they can perform electronic signature operations. After use, the UKey must be kept on the physician’s person to ensure that the holder is the authorized physician. Of course, some electronic signatures also employ password-based authentication. With the development of mobile internet and the widespread adoption of electronic signatures and e-prescriptions, many applications will be completed via mobile devices such as smartphones. Therefore, from a trend perspective, electronic signatures are gradually transitioning to mobile platforms.

As far as I know, a company called “YiWangQian” is currently working on implementing electronic signatures via mobile terminals and has achieved significant progress. I believe that in the near future, using mobile devices for electronic signatures will become a prevailing trend.

The Emergence of a Major Platform for Electronic Prescriptions Is Needed, but Who Will Build It Remains a Question

Although there are multiple avenues for exploring electronic prescriptions, few are truly viable in practice. Why? First, electronic prescriptions must be legally valid. As previously mentioned, they must employ reliable electronic signatures. On one hand, the institution issuing the electronic prescription—namely, the hospital—or the prescribing physician themselves must possess a reliable electronic signature. On the other hand, pharmaceutical retail entities must also have reliable electronic signatures. The providers of these two electronic signatures may be the same company or different companies. If they are different companies, the transmission must adopt a mutually recognized format. If they are the same company, the process is simpler, as internal integration suffices to enable the transmission of electronic prescriptions.

As previously mentioned, electronic prescriptions involve sample retention and verification, as well as subsequent medical insurance reimbursement. Therefore, the question of who will build such a large-scale platform will inevitably arise in the future. Integrating both medical institutions and retail pharmacies into this platform would better facilitate the issuance, transmission, and storage of prescriptions.

So, who can establish such a platform? For instance, it could be established by the National Health and Family Planning Commission, by the China Food and Drug Administration, or by an officially accredited third-party company.

For example, the Alibaba Health model leverages Alibaba’s large platform to bring healthcare institutions and various manufacturers from the Tmall Pharmacy Pavilion onto a single ecosystem, facilitating the electronic transmission of prescriptions among them.

Certainly, this platform can also be established by an electronic signature company. With the electronic signature company serving as the platform provider, various vendors can join the electronic signature platform to obtain official certification—specifically, legal compliance certification. This approach satisfies both our requirements for legal validity and commercial needs.

Among the various models, I believe the most viable approach is for an e-signature service provider to offer a platform that connects medical institutions with retail pharmacies. This would enable electronic prescriptions from medical institutions to be transmitted online, allowing patients to select retail pharmacies, purchase medications, and make payments digitally. Pharmacists can review e-prescriptions and apply electronic signatures online, thereby facilitating medication dispensing and delivery. Additionally, this model supports real-time settlement through medical insurance and ensures the legally compliant archival of electronic prescriptions, representing the optimal outcome.

HighlightsQuestionAnswer

Question 1:DomesticElectricityChildPrescriptionFangExperiencethreeStepsegment, from improving hospital operational efficiency to patient-centricVCBeatVBInsightPharmaceuticals and ElectricityShang, to the hospital side completed onlineMedical Consultation、ElectricityChildPrescriptionIntegrated services including prescription and home deliveryTask, so the nextStageWhat will the segment be like?

Fan Rong:In my personal view, hospitals should subsequently eliminate their in-house pharmacies to achieve a genuine separation of prescribing and dispensing. This means that, after completing their clinical visits, patients would purchase medications from retail pharmacies or supermarkets, akin to the model in the United States. Such medication procurement can be conveniently conducted online—for instance, through competitive bidding platforms that allow consumers to compare prices and quality across vendors, thereby facilitating home delivery.

Question 2: Have hospitals in Beijing that have implemented the separation of prescribing and dispensing already eliminated their pharmacies?

Fan Rong:The hospitals in Beijing that are currently implementing the separation of prescribing and dispensing have not yet abolished their pharmacies; as these are still pilot programs, they cannot produce a widespread effect. However, to my knowledge, Beijing plans to fully roll out the separation of prescribing and dispensing across all major hospitals this year. Although many hospitals have not yet put this into practice, their directors have long entertained the idea of eliminating hospital pharmacies.

Moreover, future hospitals will retain clinical pharmacists rather than dispensing pharmacists. Clinical pharmacists will guide our clinical practice and the clinical application of medications, while pure dispensing pharmacists will transition back into the community, working in retail pharmacies. This represents a major trend for the future.

Question 3: What are the specific challenges in the operational process of electronic prescriptions?

Fan Rong:In my view, one of the most challenging aspects is achieving mutual recognition of electronic signatures or establishing a platform for the circulation of electronic prescriptions. Specifically, it involves how to genuinely achieve interconnectivity and integration between medical institutions and pharmaceutical retail entities. These are two distinct sectors that have historically had intertwined interests, yet they must collaborate closely in the future. How to integrate them, what methods to adopt, what platforms to use, and what forms of electronic signatures to implement all face standardization challenges. I believe this standardization process is also quite difficult.

Question 4: How are electronic prescriptions handled abroad? Are there any practices worth learning from?

Fan Rong:Starting March 27, 2016—just a few weeks ago—dentists and other healthcare professionals in New York, USA, have been required to transmit prescriptions electronically directly to pharmacies, rather than handing paper prescriptions to patients. Why was this change implemented? The primary aim is to prevent identification errors associated with prescriptions; ultimately, it is about ensuring patient safety. Therefore, in the United States, electronic prescribing has been vigorously promoted to avoid the recognition errors that commonly occur after physicians write paper prescriptions.

The implementation of electronic prescriptions also facilitates regulatory oversight. For instance, in the United States, where substance abuse is prevalent, individuals may obtain illicit drugs by extracting active ingredients from pharmaceuticals or engage in other unlawful uses. Electronic prescriptions enable strict control over such activities, whereas paper-based prescriptions lack this advantage.

Question 5: Electronic signature orPatientCertificationIn terms of aspects, which companies in China currently perform better thanmoreOkay?

Fan Rong:As I have been based in Beijing, I may not be fully aware of the situation in other regions. However, based on my observations in Beijing, Beijing CA (BJCA) has done an excellent job in electronic signatures. They have partnered with numerous hospitals in Beijing, and many hospitals from other provinces have also sought collaboration with them. The “Yi Wang Qian” platform I just mentioned was developed by them.

Question 6: If a physician’s negligence results in the theft of signature information stored on a USB drive used for safeguarding electronic signatures, can such negligence be considered within the scope of medical diagnosis and treatment practices?

If a physician’s electronic signature device is misappropriated, what liabilities arise in such a scenario? Given that electronic signatures are subject to strict legal controls, their implementation involves robust safeguards. In practice, we have found that electronic signatures are not easily misused. Physicians who use UKeys understand that possession of the device alone does not grant access; multiple layers of encryption must be bypassed. Therefore, even if a physician’s UKey is lost, it cannot be used by others unless the password has also been compromised. By the same token, the risk of signature misappropriation can be mitigated through technical measures.

Question 7: Why have electronic medical records (EMRs) not been widely adopted? Is electronic signature a key factor?

Fan Rong: I believe the primary reasons for the limited widespread adoption of electronic medical records (EMRs) are cost and hospitals’ legal awareness. First, there is a cost associated with electronic signatures; although this cost was relatively high in the past, it has decreased significantly in recent years. Furthermore, while many healthcare institutions have implemented information-based EMR systems, I consider these systems to be relatively closed. Even with an EMR system in place, its functionality often remains limited to drafting and printing medical records, rather than constituting true electronic medical records. Consequently, if hospital administrators do not view the digital preservation of EMRs as mandatory—believing that paper-based storage suffices—there is no compelling need to adopt electronic signatures.

Furthermore, regarding the security management of electronic prescriptions, I believe that one aspect is data security, specifically the risk of information leakage. The second aspect is whether unidirectional circulation and non-replicability can be effectively ensured, which will be key to their actual clinical adoption. Only by addressing these aspects can we truly guarantee the rational and safe use of prescriptions. Additionally, whether our prescriptions operate within a platform or through other means, operating via a platform should, to some extent, offer the highest level of security.

Question 8: Is it possible that after the widespread adoption of electronic prescriptions, pharmaceutical representatives will change into“Pharmacy Agent”？

Fan Rong:I believe that the emergence of a “pharmacy rebate era” is possible, but it can be avoided. Why? Because in traditional healthcare, the relationship between patients and physicians has been an information-asymmetric sales relationship, leading to market imbalance. However, with the widespread adoption of electronic prescriptions, patients will be able to select medications and pharmacies across the entire internet ecosystem, making information more transparent. Under such conditions of information transparency, monopolies will be eliminated, and I believe that the scenario of pharmacy rebates can thereby be avoided.

I recall that during my graduate studies, my economics professor explained why monopolies emerge in the pharmaceutical industry, attributing it primarily to information asymmetry. In other words, patients are largely uninformed about medications and rely on physicians’ recommendations for drug prescriptions. However, once electronic prescriptions become widely adopted, physicians will only specify the generic name of the medication, leaving patients to choose the specific manufacturer and pharmacy. As patients select pharmacies or drug manufacturers through online platforms, all relevant information will be transparent. At that point, I believe such monopolies will be broken.