Why is the same medicine much more expensive in pharmacies than online?

"In recent times, topics such as 'spending 2,000 yuan on a cold,' 'pharmacy drug prices are three to four times more expensive than online,' and 'being bundled with a bunch of drugs when buying medicine in a pharmacy' have sparked frequent discussions on search engines and social platforms. Reporters conducted investigations and interviews on this matter.

'The medicine you sell is nearly three times more expensive than online!' A woman, with a child, walked out of the pharmacy gate after buying medicine. After staying at the entrance for a few minutes, she quickly returned to the store, pointing at her phone and telling the staff that the medicine priced at 168 yuan, recommended by the pharmacy staff for treating a cold, was found to be priced at 59 yuan on an online medicine platform, 109 yuan cheaper than the physical store. The dispute ended with a return and refund after the woman paid for the medicine.

In recent years, the phenomenon of online drugs being much cheaper than those in physical pharmacies and pharmacists bundling drugs leading to a significant increase in consumer drug costs has been common. Some pharmacies even, in pursuit of more profits and profit margins, sell prescription drugs for which they do not have qualifications.

Offline prices are much higher than online, and bundling drugs is prominent. A Beijing resident, Yang Yang, diagnosed with gout for almost a year, needs to take Febuxostat for an extended period. Previously, he bought medicine from a physical pharmacy at a unit price of 55 yuan for a box of 40mg × 10 tablets of Febuxostat. Recently, he found that the same medicine is priced at 33.8 yuan online. He calculated: buying online with a free prescription, a delivery fee of 5 yuan, a packaging fee of 0.5 yuan, a new customer discount of 2 yuan, and a final unit price of 37.3 yuan after all discounts. Buying more makes it even cheaper, so he placed an online order and received the medicine 40 minutes later.

Several interviewees reported similar experiences: buying hypertension drugs at a pharmacy at a price more than three times higher than the same type online; buying licorice tablets online for only 8 yuan, while the pharmacy sells them for 19 yuan... 'Physical stores sell medicines at outrageous prices' has become a common complaint.

Regarding such phenomena, Du Xiu Jun, a lawyer at Beijing Zhongwen Law Firm, pointed out that according to price regulations, except for government-guided prices or government-fixed prices when required by law, the prices of goods and services, including medicines, are subject to market-regulated prices set by operators based on costs and market supply and demand. For medicines, except for narcotics and first-class psychotropic drugs, which are subject to government pricing, other drug prices are market-regulated. Therefore, pharmacies have the right to determine selling prices. However, self-pricing should also be based on market supply and demand, and the price range should be determined reasonably. 'It is normal for pharmacy drug prices to be slightly higher. If they are much higher, it is unreasonable.'

'If pharmacies maliciously raise prices to make huge profits, it may violate the provisions of the Drug Administration Law, which stipulates that 'drug business entities and medical institutions shall formulate prices based on the principles of fairness, reasonableness, honesty and credit, and quality-price matching, provide drug users with reasonably priced drugs, and prohibit profiteering, price monopolies, and price fraud.' It also violates the regulations of the Price Law, which stipulates 'clear price tags, prohibition of market price manipulation, and promotion of behaviors such as excessive and upward manipulation of commodity prices,'' Du Xiu Jun said.

According to the 'Administrative Punishment Regulations for Price Violations,' if operators violate the provisions of the Price Law by using methods such as raising or lowering prices to sell or purchase goods or provide services, thereby indirectly increasing or decreasing prices, they shall be ordered to correct the violation, confiscate the illegal gains, and impose a fine of less than five times the illegal gains. For serious violations, business licenses can be revoked.

Pharmacists initiate sales mode for performance appraisal

Why are online drugs cheaper than physical pharmacies?

Liu Xin (pseudonym), a management staff member of a chain pharmacy in Hunan, told reporters that first, the operating costs are different. Physical pharmacies, to attract more consumers, generally choose locations with high foot traffic. They also need to hire staff with drug knowledge. The cost of store rent and labor is relatively high. However, online drug sales do not require high costs; only normal store operations are needed, and sometimes one person can complete multiple tasks.

'Second, there is fierce competition on online platforms. The same medicine is sold by many stores. To attract customers, many stores will adopt various preferential methods, such as full reduction, rebate, and new user coupons,' Liu Xin said. At the same time, online platforms generally adopt a direct shipment model from manufacturers and mostly use a low-profit and high-sales model, which lowers the prices.

In China, the pharmacy sector needs to rely on selling goods to survive because the salary of pharmacists relies on wage, performance wage, sales commission, and single-item commission, among other components. Pharmacy performance assessment mainly includes sales, gross profit margin, and other factors. 'When pharmacists in the store get medicines for customers, their first consideration is not which medicine is more suitable but which medicine is a task product and has a higher profit margin. More professional pharmacists will consider both profit and effectiveness,' Zhang Yu, who has worked as a pharmacist in Shandong for more than ten years, said.

Strengthening supervision and improving legislation to regulate pharmacy sales behavior

Interviewed industry insiders believe that faced with the chaos of pharmacy sales, legislation and law enforcement in the industry need to be strengthened. Pharmaceutical regulatory authorities should strengthen supervision, standardize pharmacy sales behavior, bring pharmacies back to the correct position, and avoid them going further and further down the path of excessive commercialization.

'The current business model turns a pharmacist into a businessman. Therefore, this model urgently needs to change, and the profit point also needs to change,' Kang Zhen said. Internationally, prescription drugs need to rely on dispensing fees, audit fees, or cognitive judgment fees, which are compensation mechanisms used internationally, for example, the 'prescription dispensing fee, prescription review fee, or cognitive judgment fee, patient education fee, and medication treatment management fee.' However, such fees are generally purchased by national medical insurance or insurance companies. Therefore, pharmacies, although GSP-certified, are only regarded as ordinary stores and do not undertake medical service work.