Baolaitong Files IPO Prospectus: Revolutionizing Prescription Drug Promotion Through Internet-Based Academic Outreach

In recent years, measures such as price reductions through tendering, volume-based procurement, and lowering the proportion of pharmaceutical revenue in hospitals have made life increasingly difficult for pharmaceutical companies. If they continue with their existing marketing models, the profits from prescription drugs will be further squeezed, making their situation even more challenging.

Despite years of calls for marketing transformation in the pharmaceutical industry, few companies have actually undergone significant changes. Some pharmaceutical companies may be adopting a “wait-and-see” attitude, delaying action until absolutely necessary; others struggle to find effective models for change and thus maintain the status quo in response to evolving challenges.

In fact, in addition to the substantial market within hospitals, there is also a significant untapped market outside hospital settings. According to research, the current rate of natural outflow of hospital prescriptions is 16%, while the proportion of active sales outside hospitals stands at 4%. The two primary drivers for the existence of an out-of-hospital prescription drug market are cross-regional distribution (channel stuffing) and prescription diversion from hospitals. The predominant purchasing channel in the out-of-hospital market is pharmacies.

What Baolaitong is doing is attempting to enable pharmaceutical companies to achieve out-of-hospital sales of prescription drugs, with the platform’s positioning focused on oral medications for chronic diseases. “Only patients with chronic conditions require long-term communication with physicians, who also have needs for conducting research. Moreover, physicians’ provision of long-term services to chronic disease patients helps build their own professional brand,” stated Qian Jing, Deputy General Manager of Baolaitong.

Multiple App Combinations Linked via QR Code

"In Qian Jing’s view, the essence and fundamental advantage of internet e-commerce lie in eliminating intermediaries to allow products to reach customers directly. 'However, selling prescription drugs using traditional e-commerce models is not feasible.'"

Traditional e-commerce merely requires listing products online, allowing customers to filter and purchase items based on personal preferences. However, the purchase of prescription drugs is not a decision that consumers can make independently. Nor can the sales model for prescription drugs replicate the ride-hailing model exemplified by Didi Chuxing; the core requirement is that prescriptions must originate from physicians. Therefore, physician involvement is indispensable throughout the entire process of online prescription drug sales. Physicians’ motivation to prescribe is driven both by patients’ clinical conditions and by service-oriented factors. Currently, such service-driven incentives primarily stem from pharmaceutical companies, whose business development or promotional representatives (medical representatives) provide pre- and post-sales services related to prescription drugs to physicians.

For paying patients, whether purchasing online or offline, drug quality is their primary concern, followed by price. However, patients using prescription drugs cannot independently choose the quality or specifications of the products they purchase, nor have they ever received corresponding services from sellers (physicians or pharmaceutical companies) as they do with fast-moving consumer goods. Therefore, in the realm of internet marketing for prescription drugs, service remains the core competitive advantage.

There is a unique characteristic in the sales of prescription drugs: seeking medical advice and medication involves an information-asymmetric communication model. Medical representatives communicate academic information about prescription drugs to physicians, physicians convey diagnostic and treatment information to patients, and patients discuss pricing and service information with pharmacies. Therefore, the core stakeholder for prescription drugs is the pharmaceutical company (represented by medical representatives), the key decision-maker for prescriptions is the physician, and the primary payer is the patient.

Throughout the entire prescription drug sales process, pharmaceutical companies aim to capture customer (physician) data and disseminate academic information about their medications; medical representatives seek more convenient and efficient communication with physicians to better meet their needs; physicians desire academic exchange, data accumulation, and the establishment of a stable patient base; patients hope to access high-quality, affordable medications and receive high-standard services; while pharmacies strive to achieve precision marketing and higher repurchase rates by leveraging patient-related data.

Based on this, Baolaitong has developed a mobile internet-based out-of-hospital academic promotion (communication) platform using an APP as its tool, linking all terminals involved in the prescription drug marketing process through a single QR code. The APP features intuitive names: RepConnect, DoctorConnect, PatientConnect, and PharmacyConnect. Medical representatives can obtain a unique, exclusive QR code after verification, which includes their personal information and relevant drug details. Doctors scan the representative’s QR code and, upon registration, generate their own exclusive QR code. Patients register on the APP, scan the doctor’s QR code to generate a new QR code, and are then guided by the doctor to pharmacies where they can enjoy discounted medication purchases via the QR code.



On this platform, domestic pharmaceutical companies finally have a professional channel to directly communicate academic information with physicians. Meanwhile, the portion of expenses previously used for clinical promotion—a long-standing challenge for domestic pharmaceutical firms—can be gradually transformed into compliant expenditures for academic services that guide patients to purchase physicians’ services. On this mobile internet-based platform for out-of-hospital academic promotion, physicians can conduct post-consultation follow-ups, patient education, and patient data collection via a mobile app; pharmaceutical companies can provide online professional services such as academic updates and product knowledge communication; and patients can access “private physician” services, enabling doctor-patient communication, discussion of medical conditions, and appointment registration. In this way, the internet-based approach makes the marketing of prescription drugs by pharmaceutical companies more compliant.



“Pharmaceutical companies are charged for using the app; they can either lease it or pay Baolaitong to develop a customized solution tailored to their needs. ‘Large companies currently prefer to directly purchase customized platform products, while small and medium-sized enterprises and regional distributors are more inclined to lease shared platforms,’ said Qian Jing.”

In terms of specific implementation, companies can start by piloting a single chronic disease medication in one regional market to gradually cultivate customer experience and establish a model market. In the future, as the number of medications increases, the database will continue to be enriched.