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China’s largest e-commerce player Alibaba Group Holding Ltd (NYSE:BABA) is having a difficult time due to a recent government decision. As per the reports, the group had decided to explore China’s medical market by launching online sales of prescription drugs; however, the plan backfired when the government halted a drug monitoring system created by Alibaba’s health-care business unit – Alibaba Health Information Technology Ltd.

Insights of Matter

This system is primarily owned by FDA China, which uses it as a means to get updated about regulatory, composition, manufacturing and expiration data. As soon as the news about Government’s interruption made it to the media platforms, FDA said that it would terminate the system and make some changes in drug tracking rules.

Ali Health came into existence in 2014 when Yunfeng Capital Ltd and Alibaba bought 54% stake in Citic 21CN, a leading firm that collected and managed pharmaceutical-products data. As a result of this acquisition, Citic 21CN took the charge of Alibaba’s OTC sale of medicines. It also launched a mobile app that puts patients in touch with community hospital representatives and doctors.

It’s one of the many steps taken by Jack Ma and Alibaba to position the retailer as the largest online seller when it comes to online pharmaceutical market in China. As per the reports, the prescription drug sales touched $100 billion mark in 2015. Going forward, it’s likely to grow at a significant rate, which has prompted Alibaba to take a handful of initiatives to become a majority market share holder in the prescription drug market.

Reporters got in touch with Alibaba’s spokesperson Rico Ngai, but he declined to comment on this issue. He referred to Ali Health’s statement, according to which the company will work closely with regulators to resolve this issue and get things back on track as soon as possible. Further details about this matter will be announced at a later date.

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Steve Kanaval: Portfolio Manager/Writer/ Market Analyst Steve began his career in the Trading Pits in Chicago making markets at the Chicago Mercantile Exchange (NYSE:CME) the Chicago Board of Trade and the CBOE in the early 80’s. He ran the Morgan Stanley Derivative Prop Trading for the firm specializing in Index Arbitrage. He continued his career as a Trader/Portfolio Manager for multiple Hedge Funds during the Internet Boom of the 90’s managing large portfolios. Steve is known as an expert in MicroCap Technology Stocks and the emerging Digital Currency markets as a Portfolio Manager for his Family Office. Steve has managed portfolio’s in volatile asset classes for 3 decades as a commodity trader, hedge fund manager and digital currency trader and miner. Steve publishes his views on the asset classes in a public forum and has published more than 10,000 articles simplifying these complex and volatile assets for readers. His work is published on multiple sites including Bloomberg, Equities.com, Hacked.com, CryptoCurrencyNews as a paid contributor. His work includes research, journalism and archived video on important market volatility related to stocks, digital currency and other volatile misunderstood asset classes. He offers a humorous, unique insight and the related back stories and drivers for readers interested in volatility and emerging market assets. Full disclosure Steve is long 25 digital currencies and sits on the board of multiple public companies involved in digital currencies, and owns shares in these companies from time to time.

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