Eight Key Policy Challenges in Implementing Electronic Prescriptions

On December 10, 2015, healthcare media outlets were flooded with a headline: “Wuzhen Internet Hospital Issues China’s First Electronic Prescription.” The long-restrained internet healthcare sector suddenly stirred with excitement. The loosening of regulations on electronic prescriptions largely signaled that the downstream online retail of prescription drugs was beginning to test the waters.

So, what exactly is an e-prescription? Why was it previously restricted? What policy limitations were in place? And how should we break through and explore new possibilities?

The Core of E-Prescriptions Is Digitalization

First, there is an overlap in the definitions of prescriptions and medical records. In hospital management, it is customary to regard prescriptions as outpatient and emergency prescriptions, while medical records refer to inpatient medical records.

However, according to Article 2 of the Measures for the Administration of Prescriptions, “a prescription refers to a medical document issued by registered licensed physicians and licensed assistant physicians (hereinafter referred to as ‘physicians’) for patients during diagnosis and treatment activities, which is reviewed, dispensed, and verified by pharmaceutical professionals qualified in pharmaceutical technical positions (hereinafter referred to as ‘pharmacists’), and serves as proof of medication for patients. Prescriptions include medication order sheets for inpatient wards in medical institutions.” Meanwhile, according to Article 2 of the Provisions on the Management of Medical Records in Medical Institutions (2013 Edition), “medical records refer to the aggregate of written materials, symbols, charts, images, slides, and other data generated by medical personnel during medical activities, including outpatient (emergency) medical records and inpatient medical records.” Furthermore, according to Article 16 of the Basic Standards for Medical Record Writing, “inpatient medical records include the front page of the inpatient medical record, admission notes, progress notes, surgical consent forms, anesthesia consent forms, informed consent forms for blood transfusion therapy, informed consent forms for special examinations (special treatments), notices of critical (severe) condition, physician’s order sheets, auxiliary examination reports, temperature charts, medical imaging examination data, pathological data, etc.” As can be seen from the above, physician’s order sheets constitute both prescriptions and part of the medical records.

Moreover, the "Basic Data Set for Electronic Medical Records," issued by the National Health and Family Planning Commission, includes specific provisions for "outpatient and emergency prescriptions" as part of its third section. This indicates that outpatient and emergency prescriptions are also considered an integral component of electronic medical records.

Thus, it is evident that prescriptions are similar to medical order sheets, both serving as carriers for licensed physicians to document pharmacological treatment. Medical record documentation refers to the process by which healthcare professionals obtain relevant data through medical activities such as patient interviews, physical examinations, auxiliary tests, diagnosis, treatment, and nursing care, and then summarize, analyze, and organize this information to create records of medical activities. Therefore, from a definitional perspective, the issuance of prescriptions also constitutes the documentation of treatment information within medical records. Broadly speaking, both prescriptions and medical records fall under the category of medical documents.

Currently, the more commonly used terms in reports include "electronic prescription," "online prescription," and "internet prescription." The term "electronic prescription" emphasizes its basic form, whereas "online prescription" and "internet prescription" focus more on the medium of transmission and use. Regardless of the medium or method of transmission and application in the future, the core remains a digitized prescription. Therefore, comparatively speaking, it is more appropriate to adopt the term "electronic prescription."

Therefore, with reference to the definition of electronic medical records in the Basic Specifications for Electronic Medical Records (Trial), an electronic prescription should be defined as a digital medical document issued by physicians for patients during diagnosis and treatment activities using information systems, capable of being stored, managed, transmitted, and reproduced; reviewed, dispensed, and verified by pharmacists; and serving as proof of medication for patients. Electronic prescriptions can be stored, transmitted, managed, and reproduced among medical institutions, patients, pharmaceutical retail establishments, and insurance institutions via networks, mobile communications, data storage devices, and other means.

To constitute an electronic medical record in the true sense, three conditions must be met: reliable digital signatures, trusted timestamps, and standardized usage and management. The same applies to electronic prescriptions.Some healthcare institutions have optimized outpatient workflows by leveraging Hospital Information Systems (HIS) to enable digital, paperless prescription issuance, transmission, and printing; however, these prescriptions do not constitute true electronic prescriptions. Furthermore, as electronic prescriptions are not limited to in-hospital use and are frequently utilized in retail pharmacies, their scope of application is broader than that of electronic medical records, imposing higher requirements on storage, management, transmission, and reproducibility.

“Bundled” Electronic Prescriptions8a question

Management of Electronic Prescriptions: Currently, there are no specific laws or regulations dedicated to this area, with the Measures for the Administration of Prescriptions being the most relevant. However, based on the Measures for the Administration of Prescriptions and other laws and regulations, several policy issues require breakthroughs.

1. Issues with Out-of-Hospital Prescription Purchases

Article 42 of the Measures for the Administration of Prescriptions stipulates that, “except for prescriptions for narcotic drugs, psychotropic substances, medicinal toxic drugs, and pediatric prescriptions, medical institutions shall not restrict outpatients from purchasing medications at pharmaceutical retail enterprises with their prescriptions.” Article 2 of the Interim Measures for the Classified Administration of Prescription Drugs and Over-the-Counter Drugs provides that, “prescription drugs may only be dispensed, purchased, and used upon presentation of a prescription issued by a licensed physician or a licensed assistant physician; over-the-counter drugs may be self-assessed, purchased, and used without such a prescription.”

Although national policies have opened up the option for patients to purchase medications externally, most medical institutions, constrained by insufficient government funding and the drug price markup policy, continue to prevent prescriptions from being filled outside their facilities under various pretexts. This is particularly true for prescription-only medications. For instance, a widely circulated electronic prescription included a small-print disclaimer at the bottom stating, “Note: This prescription is valid only for dispensing within this hospital; downloading it for external pharmacy use does not constitute a valid prescription.” In other words, this electronic prescription ultimately left retail pharmacies disappointed.

For pharmaceutical retail institutions, the key driver of industry development lies in how to stimulate the external fulfillment of prescriptions from medical institutions, given their inherent price advantages. It can even be argued that it is precisely the strong demand for prescriptions by pharmaceutical retailers that has continuously propelled the digitization of traditional paper prescriptions to facilitate convenience. Unlike paper prescriptions, electronic prescriptions do not require the external purchase stamping procedures from medical institutions, thereby making the external fulfillment of prescriptions more convenient.

On February 6, 2016, the Beijing Municipal Government issued the "Implementation Plan for the Comprehensive Reform of Urban Public Hospitals in Beijing," which re-emphasized the vigorous promotion of the separation of prescribing and dispensing, and proposed exploring pathways for patients to autonomously choose between purchasing medications at hospital outpatient pharmacies or at retail pharmacies with a prescription, thereby dismantling the mechanism of subsidizing medical services with drug profits. Following the comprehensive implementation of the policy separating prescribing from dispensing, medical institutions abolished the drug markup policy, losing the incentive to restrict out-of-hospital prescriptions; meanwhile, the pharmacy departments within these institutions instead increased operational costs for the medical facilities.

Therefore, the implementation of the policy separating medical services from pharmaceutical sales will incentivize medical institutions to release prescriptions, reduce pharmaceutical staff and departments, and gradually drive the reengineering of the process whereby patients purchase medications at retail pharmacies using prescriptions issued after clinical consultations. Moreover, Shouxin Company, which supports Beijing’s medical insurance information system, has recently established workflow procedures for externally dispensed prescriptions. It is believed that in the near future, it will become a reality for patients to purchase medications at designated medical insurance retail pharmacies using prescriptions from medical institutions with real-time settlement. The emergence and development of electronic prescriptions undoubtedly represent a significant improvement in this process reengineering.

2. Issues with Signed Retention Samples

Article 6 of the Measures for the Administration of Prescriptions stipulates that “the specimen signature and special seal of the prescribing physician shall be consistent with the specimens kept on file by the pharmacy department within the medical institution, and shall not be altered arbitrarily; otherwise, re-registration and filing of new specimens shall be required.” Article 10 provides that “physicians may issue prescriptions only after filing their specimen signatures or special seals with the medical institution where they are registered.”Article 28The regulations stipulate that “when physicians use computers to issue and transmit routine prescriptions, they shall simultaneously print out paper prescriptions in a format consistent with handwritten prescriptions; the printed paper prescriptions shall become valid only after being signed or stamped with an official seal. When dispensing medications, pharmacists shall verify the printed paper prescriptions and dispense the medications only after confirming their accuracy, while retaining both the printed paper prescriptions and the electronically transmitted prescriptions for future reference.” The requirements for signatures, seals, and specimen filing specified in the document serve, on one hand, to confirm the prescription information by the physician, and on the other hand, to facilitate the pharmacist’s verification of the authenticity of the prescription issuance.

However, to ensure the authenticity of prescription issuance in electronic prescriptions, it is necessary to transplant the electronic signatures used in electronic medical records to the process of issuing electronic prescriptions, and further expand the application scope of electronic signatures from medical institutions to pharmaceutical retail outlets. For example, the first line of the first electronic prescription issued by Wuzhen Internet Hospital clearly states: “This prescription is electronically signed by Wang Jian’an.” In addition, Article 38 of the Measures for the Administration of Prescriptions stipulates that “after completing prescription dispensing, pharmacists shall sign or affix their dedicated seals on the prescription.” Thus, not only physicians in medical institutions but also pharmacists in pharmaceutical retail outlets are required to use electronic signatures. This places higher demands on the convenience and compatibility of electronic signature systems.

3. Drug Formulary Issues

Article 16 of the Measures for the Administration of Prescriptions stipulates that “medical institutions shall procure drugs in accordance with the approved and published generic names by the drug supervision and administration department. For drugs with the same generic name, there shall be no more than two varieties each for injectable and oral dosage forms, and one to two varieties for compound preparations with similar prescription compositions. Exceptions are made for cases where other dosage forms and strength specifications are required due to special diagnostic and treatment needs.” This provision imposes restrictions on the drug supply catalogs of medical institutions, requiring them to develop formularies based on their nature, functions, and tasks. However, for electronic prescriptions, the enhanced convenience of external procurement and the increased selectivity available at retail pharmacies render such restrictions on drug catalogs largely ineffective.

4. Prescription Return and Modification Issues

Article 36 of the Measures for the Administration of Prescriptions stipulates that “after reviewing a prescription, if a pharmacist deems the medication inappropriate, they shall inform the prescribing physician and request confirmation or reissuance of the prescription.” In the traditional prescription circulation process, both physicians and pharmacists are located within medical institutions, allowing this provision to be properly implemented. However, if a pharmacist at a retail pharmacy identifies inappropriate medication use during prescription review, confirmation or reissuance by a physician at a medical institution is required. For paper prescriptions, this would necessitate patients traveling back and forth between the medical institution and the pharmacy. In contrast, with electronic prescriptions, leveraging the advantages of digital storage and transmission enables seamless transmission to the physician’s terminal for modification and subsequent return to the pharmacy.

5. Prescription Transmission Issues

For paper prescriptions, the transmission of the prescription relies on the patient carrying and delivering it, which is not subject to dispute.

However, for electronic prescriptions, since the prescription information is in digital format, there are multiple possible methods of transmission. Classified by the carrier of digital transmission, they can be divided into two types: physical mobile digital storage devices and non-physical information networks. Classified by the form of digital information representation, they can be divided into original digital data, digital photographs, QR codes, and other formats. Classified by the transmission process, they can be divided into models such as healthcare institution-to-pharmacy retail outlet and healthcare institution-to-patient-to-pharmacy retail outlet. Classified by the degree of data openness, they can be divided into forms such as intra-system data transmission using the same platform or tool, and inter-system standardized data transmission using different platforms or tools.

6. Data Security Issues

As a form of digital information, electronic prescriptions inevitably pose data security risks. Data security requires that information cannot be freely read or copied, and also cannot be arbitrarily modified or deleted.

According to Article 6 of the "Prescription Management Measures," prescriptions include information such as the patient's general condition and diagnosis. This information constitutes patient privacy. In the delivery of paper prescriptions, privacy is safeguarded by the individual since the prescription is held by the patient. However, for electronic prescriptions, prescription information is transmitted in digital form, particularly via network-based transmission and storage. This process entails risks of privacy breaches and data security vulnerabilities.

Moreover, prescriptions are characterized by unidirectional circulation and non-replicability. According to the Measures for the Administration of Prescriptions and the Interim Provisions on the Circulation Management of Prescription and Over-the-Counter Drugs, prescriptions circulate unidirectionally from medical institutions to pharmacies or drugstores. Upon completion of medication dispensing, the prescription must be signed and stamped, and retained on file. Paper prescriptions bear the physician’s signature and seal, making them difficult to replicate; otherwise, there would be a risk of patients using the same prescription to repeatedly purchase medications at different pharmacies. However, as digital representations, electronic prescriptions are more susceptible to replication, thereby necessitating stricter data security measures for control.

7. Medical Insurance Reimbursement Issues

Statistical data from 2014 shows that the total number of participants in the Urban Employee Basic Medical Insurance, Urban Resident Basic Medical Insurance, and New Rural Cooperative Medical Scheme reached 1.336 billion, accounting for 97.7% of China’s total population of 1.368 billion at the end of 2014. The insurance coverage rate continued to rise.

Under the current medical insurance reimbursement system, taking Beijing as an example, patients receive real-time settlement when seeking medical care at healthcare institutions. Patients are only required to pay their out-of-pocket portion. The medical insurance administrative authorities supervise the diagnostic and treatment practices of healthcare institutions and will deny payments to institutions found engaging in non-compliant behaviors. For expenses related to externally purchased medications, patients must seek manual reimbursement by submitting external prescriptions and invoices from designated medical insurance pharmacies. This reimbursement process adds complexity and burden for patients.

If electronic prescriptions are implemented, patients will proceed directly to retail pharmacies for real-time settlement. Prescriptions will list drugs by their generic names, allowing patients to choose among brands at different price points. Pharmacists will be responsible for prescription review and dispensing. Should the healthcare security administration identify any non-compliant practices during its audits, it will refuse reimbursement to the retail pharmacy. Furthermore, from a hospital management perspective, the inability to control the final prescription cost would undermine the implementation of drug-to-revenue ratio assessments, which are intended to curb the unreasonable growth of medical expenses.

8. Legal Liability Issues

According to Article 59 of the Tort Liability Law, “Where a patient suffers harm due to defects in drugs, disinfectants, or medical devices, or due to the transfusion of substandard blood, the patient may claim compensation from the manufacturer or the blood supply institution, or alternatively from the medical institution. If the patient claims compensation from the medical institution, the medical institution shall have the right, after providing compensation, to seek recourse against the liable manufacturer or blood supply institution.” This legal provision originates from relevant regulations in the Product Quality Law. During the legislative process, there was controversy within the legal community over whether drugs should be regarded as products provided by medical institutions. Some argued that drugs are essential tools for medical diagnosis and treatment activities rather than products. Others contended that medical institutions profited from drug sales through the drug markup policy—using drug revenues to subsidize medical services—which demonstrated the product-like nature of drugs. However, with the advancement of the policy separating prescribing from dispensing, along with the development and widespread adoption of electronic prescriptions, medical institutions will no longer benefit financially from drugs and may even cease selling them altogether. Consequently, the rationale for retaining this legal provision will face renewed scrutiny. At that point, drugs will more purely serve as diagnostic and therapeutic tools, and patients will purchase medications exclusively from retail pharmacies. In such a scenario, if patients suffer harm due to drug quality issues and seek compensation from medical institutions, there will be no jurisprudential basis for such claims. Medical institutions should not bear strict liability without fault.

Electronic Signatures: The Cornerstone of Security

Currently, there are four officially operational cases in the exploration and practice of electronic prescriptions in China: Guangdong Provincial Online Hospital, Wuzhen Internet Hospital, Alibaba Health Online Hospital, and the “Mobile Doctor Visit” app.

Guangdong Provincial Internet Hospital has effectively positioned its telemedicine access points within retail pharmacies, or in other words, extended hospital pharmacy services into community drugstores. Physicians conduct online consultations and issue electronic prescriptions, which are automatically printed at terminals located in the pharmacies. Pharmacists at these locations then dispense the medications according to the prescriptions, after which patients pay for and purchase their drugs.

Wuzhen Internet Hospital brings telemedicine directly into patients’ homes, enabling them to complete consultations, payments, and medication purchases online from home. Electronic prescriptions are restricted to in-hospital use and dispensing. After dispensing, the medical institution collaborates with pharmaceutical companies to deliver medications directly to patients’ homes.

Alibaba Health’s Online Hospital further extends the reach of telemedicine to patients’ computers and even mobile devices. Patients can use electronic prescriptions to freely select online pharmacies for purchase and delivery, or they may choose to visit the physical stores affiliated with these online pharmacies in person. Electronic prescriptions are valid within the Alibaba Health online medical platform, thereby enabling an O2O (online-to-offline) model linking retail pharmaceutical institutions directly to patients.

The “Mobile Doctor” app, developed by China Hospital Group, enables hospitals within the group to provide telemedicine services to patients, with pharmaceutical logistics companies under the group handling medication delivery. The telemedicine interface is integrated into the app, and electronic prescriptions issued through the app are valid exclusively within the group.

All four of these exploratory practices have, from a policy perspective, broken through the provision in the National Health and Family Planning Commission’s “Opinions on Promoting Telemedicine Services in Medical Institutions” that restricts telemedicine to interactions between medical institutions. Among them, Guangdong Province’s Network Hospital adopts an approach closer to traditional clinical workflows, whereas Alibaba Health’s Network Hospital is more innovative and better aligned with the developmental direction of electronic prescriptions.

Regardless of the method adopted, the widespread use of networked and convenient electronic signature technology is the cornerstone of the development and application of electronic prescriptions, as well as the legal safeguard for their operation. Therefore, the key core issue will be how to rapidly innovate the existing electronic signature method that relies on U-keys on computers into more convenient tools, even enabling online electronic signatures on mobile terminals. As far as is currently known, electronic signature vendors such as “Yi Wang Qian” are already engaged in related product development.

Therefore, from an overall perspective, a more feasible approach to implementing e-prescriptions is to enable connectivity between medical institutions and pharmaceutical retail outlets through a unified information platform or system. This facilitates the online transmission of e-prescriptions with digital signatures from medical institutions, allows patients to select pharmaceutical retailers online for medication purchase and payment, enables pharmacists to review and digitally sign e-prescriptions online, and ultimately completes medication dispensing and delivery along with real-time online settlement of medical insurance claims.

Author: Fan Rong, Beijing Tsinghua Changgung Hospital