Alibaba Group today launched a scanning technology to make it easier for Chinese consumers to spot counterfeit pharmaceuticals using their mobile phones, offering some peace of mind to a country concerned about the quality and efficacy of prescription and over-the-counter medications.

 

The technology, which is integrated into the latest versions of popular shopping and e-payment apps Mobile Taobao and Alipay Wallet, allows consumers to scan barcode on drug boxes to get information on the drug’s authenticity, origins, usage, ingredients and contraindications.

Counterfeit drugs are a huge problem in China, where backyard factories located in villages across the country churn out millions of dollars worth of fake drugs to export and circulate domestically. According to a Baker & McKenzie report, China is the largest producer of counterfeit medication in the world. The World Health Organization put the global pharmaceutical counterfeiting industry at $75 billion in 2010.

One indication of the scale of the problem was seen in April, when French customs officials said they had seized the largest shipment of counterfeit drugs ever to enter the European Union. The shipment came from China. The PRC has stepped up efforts in recent years to contain the problem. In 2012, China’s State Council announced an initiative to build a national electronic regulatory database to make essential information available for every package of genuine medication in China, including factory of origin.

Alibaba’s drug-scanning technology was developed in collaboration with CITIC 21CN Co., a leading developer of product identification, authentication and tracking systems for pharmaceuticals and medical products in China. Alibaba Group and a private equity firm bought a controlling stake in CITIC 21CN earlier this year as a way to expand its e-commerce efforts in the pharmaceutical category, and to foster consumer trust through the sale of genuine pharmaceuticals by using CITIC 21CN’s authentication technology.