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More Than Half of Online Drug Sellers Are Operating Illegally with Respect to Chinese Law and Regulation, New LegitScript and ASOP Global Study Finds

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A new report on the Chinese internet pharmacy market by ASOP Global and LegitScript finds that most online drug sellers are operating illegally, and that a noteworthy percentage are illegally offering prescription drugs or controlled substances.

The report, titled “The Chinese Internet Pharmacy Market Threat Assessment,” includes new information about the situation in China related to illegal internet drug sales – for which it is illegal to sell prescription drug products online – and makes several important recommendations to promote patient safety and public health. A comprehensive analysis of LegitScript’s review found that 17% of websites surveyed were operating illegally in offering prescription drugs or controlled substances. In total, 57% of online drug sellers are operating illegally with respect to Chinese law and regulation. The Chinese government and private sector have made significant efforts to combat illegal online drug sales, but additional efforts may be taken to ensure compliance with relevant laws and practice guidelines.

The report is part of the ASOP Global China Initiative, which began in 2015 to better understand the China internet drug sales problem and provide recommendations. At the outset of the China Initiative, ASOP Global published the China Internet Drug Study in 2015, convened an October 2017 symposium in Beijing on combating illegal online drug sales and a December 2018 delegation trip to Beijing. ASOP Global met with China FDA (now China NMPA) during previous trips to Beijing. ASOP Global will continue to coordinate with the China National Medical Products Administration (NMPA) related to the findings of this report.

This report, which also has a Chinese-language version, has been shared with China NMPA and representatives of several federal agencies within the United States, including the Food and Drug Administration, Department of Commerce and US Embassy in Beijing. Below is a brief summary of key report components:

 

Background:
  • LegitScript evaluated the landscape of the illicit internet pharmacy market in China through search engine data. In general, 57% of online drug sellers are operating unlawfully in China. This percentage is much lower than the global level, which shows that the measures the Chinese government have taken over the past few years are effective.
  • However, the risks of illicit online drug sales in the Chinese market are the same as in the rest of the world. Prescription medication and controlled substances are sold online without requiring a prescription. Unapproved medicines are sourced from unlicensed sellers. These practices put patients’ health at risk.
  • Chinese illicit drug sellers are unique in that there is a heavy reliance on third-party platforms, such as WeChat, to complete transactions, instead of processing the orders directly through their own websites. These transactions often happen over chats that take place on mobile phones.
  • Illicit drug sellers in China also often utilize multiple platforms, such as social media or e-commerce, for different aspects of their businesses (e.g., marketing, order placing, and payment processing). These factors make it challenging for law enforcement to identify problematic sellers.
  • The Chinese government and private sector have made efforts to curb illicit online drug sales, but LegitScript predicts the ratio of illicit online drug sales in China to remain at the current level based on the trends observed in the Chinese market and globally. The fact that sellers conduct a big portion of their business across multiple platforms and often on smartphone apps will also continue to pose challenges for Chinese law enforcement.

 

Key Findings:
  • About 17% of the high-visibility search results yielded illicit websites facilitating the sale of prescription drugs or controlled substances. Of the illicit results, 56% were internet pharmacy websites dedicated to illicit online drug sales.
  • The 26 searches for life-saving medicines returned a total of 2,261 results. Of those 18% were illicit results, and 59% of the illicit results were for illicit internet pharmacies.
  • The 10 searches for controlled substances returned a total of 877 results. Of those, 15% are illicit results and 46% of the illicit results are for illicit internet pharmacies.
  • The majority of pharmacy websites in the search results were not properly requiring a prescription.
  • None of the websites selling controlled substances required a prescription.
  • According to LegitScript data collected for this report, the top three registrars in China used by the illicit internet pharmacies are Alibaba/HiChina,and Xin Net. Among these, LegitScript considers NameSilo one of three US-based safe-haven registrars for illicit internet pharmacies.
  • More than half of illicit pharmacies surveyed are registered with Chinese registrars, and 15% are registered with a US registrar.
  • LegitScript’s research for this report also identified a few websites promoting medical tourism to India for more affordable treatments. This business model itself is not problematic; however, the websites further offer to connect patients with doctors in India through telemedicine and to deliver prescription medication to Chinese patients from a licensed Indian pharmacy they partner with. Currently, there is no regulation regarding telemedicine conducted internationally.

 

Conclusions and Next Steps:
  • In general, 57% of online drug sellers are operating unlawfully in China. Prescription medication and controlled substances are sold online without requiring a prescription. Unapproved drugs are sourced from unlicensed sellers.
  • Chinese illicit drug sellers are unique in that they rely heavily on third-party platforms, such as WeChat, to complete transactions instead of processing the orders directly through their own websites.
  • Illicit drug sellers in China also often utilize multiple platforms, such as social media or e-commerce, for different aspects of their business. These factors make it challenging for law enforcement to identify problematic sellers.
  • Illegal online drug sellers conduct a big portion of business across multiple platforms and on smartphone apps. This will continue to pose challenges for law enforcement.
  • The Chinese government has realized the new challenges of the online drug market. A more robust monitoring system for websites and third-party e-commerce platforms (with possible expansion to social media platforms and apps) will soon be implemented.
  • LegitScript predicts that the trend of illicit online drug sales over smartphone-based apps will continue. Enforcement efforts must evolve to respond to the illegal market’s utilization of technology and social media.
  • Continuous public education about illicit online drug sales would help Chines patients better understand the risks involved in buying prescription medication online.

 

LegitScript helps keep the internet safer and more transparent with investigative analyses that identify trends, map out networks of bad actors, and provide actionable intelligence for government agencies and nonprofit organizations dedicated to fighting cybercrime. Learn more about how our investigative analyses can help you.