"Fake drug purchasing" earns 10 million in a year on the edge of profiteering and law

The rise of professional cross-border medical intermediaries in China is quite dramatic.

In 2013, Lu Yong, a patient with chronic myeloid leukemia, was sued for helping domestic patients purchase Indian anticancer drugs. Since then, low-cost Indian generic drugs have gradually become known to the public. In the end, Lu Yong’s case was withdrawn by the procuratorate and the story of “the first person to purchase the generic drug” promoted the birth of the medical tourism intermediary.

Initially, this can be considered a profiteering industry. The huge price of Indian generic drugs, as well as the drugs that are not registered in the country, are regarded as legal provisions for counterfeit drugs, which together have led to the demand for overseas drug purchases. Medical tourism companies that carefully avoided the legal red line, opened up the Indian medical market, and earned tens of millions of dollars in annual income during the heyday by charging a one-way tens of thousands of service fees.

Earn ten million a year

Yang Chen is one of the first people in China to start the Indian medical tourism business.

In 2013, the first generation of new hepatitis C drug, Sofibuvir, developed by Gilead Company of the United States, has raised the cure rate of hepatitis C to over 90%. At this time, about 10 million hepatitis C patients in China are still suffering from viruses.

A doctor of pharmacy, Yang Chen saw the value of hepatitis C drugs in China earlier than others. However, when Sofibuway was listed in China, it was still far away, and nearly 600,000 drug prices kept the vast majority of patients out. At the same time, in India, not far from China, due to the existence of patent compulsory license, Gilead's new hepatitis C drug was listed in India at an international drug price of 1% in 2014, and with Mylan and Ranbaxy. (Ranbaxy) and other 11 Indian generic drug companies reached a patent transfer cooperation.

The Lu Yong case not only prevented the Chinese from leaving the country to purchase medicines, but instead prompted more and more patients to invest their hopes of healing in India. In April 2015, Yang Chen went to India to inspect and found that the local medicine was really cheap. At that time, he felt that “this thing (medical tourism in India) can certainly be achieved”.

After returning from India, Yang Chen founded Kang Antu Medical Tourism Company. In the early days, Yang Chen made a web page to introduce Sofibuwe and Indian generics, and attached some popular science articles. Soon after, he began to receive patient consultation calls. “The number of telephone consultations has increased day by day, and at most, seven to eight hours a day are answering customers' questions.” Yang Chen recalled.

On June 12, 2015, Yang Chen has clearly remembered that he made his first business on this day. Under his leadership, Ms. Liu, a hepatitis C patient in Nanjing, spent more than 6,000 yuan in India to buy a course of sofosbuvir, and he earned a service fee of 18,000 yuan.

Since then, the number of customers has grown linearly. "In August, we made dozens of single businesses. The worries of shareholders and shareholders can be completely lifted." Yang Chen told the First Financial Reporter that when the business is the best, he sends 3 trips a month. The regiment, each group of thirty or forty people, "we rent a bus, it is spectacular, like the Hong Kong football team."

As the business grew bigger and bigger, Yang Chen successively set up offices in Beijing and Jilin. A year later, Yang Chen’s company earned nearly 10 million net profit and got a 12 million financing. The company’s valuation was over 100 million.

“The way to bring back manually is the safest”

Despite the real needs of a large number of patients in the country, intermediaries want to turn demand into a business, and need to carefully avoid the legal red line.

In the early years, Lu Yong, the first person to fight cancer, helped the thousands of patients to purchase cheap anti-cancer drugs in India. The prosecution authorities filed a public prosecution for allegedly hampering credit card management crimes and selling fake drugs. Although the procuratorate did not sue Lu Yong, the case clearly reminded the intermediary that the red line could not be crossed.

The Drug Administration Law of the People's Republic of China stipulates that the import of drugs must be examined and organized by the drug regulatory authority under the State Council. Only after examination and confirmation that it meets the quality standards, is safe and effective, can it be approved for import and issued a certificate for the registration of imported drugs. Drugs that must be approved in accordance with the law and produced, imported, or must be inspected according to law and sold without inspection are treated as counterfeit drugs.

Yang Chen told the First Financial Reporter that in order not to step on the legal red line, Kang'an Way and other overseas medical intermediaries only set up drug purchase channels for patients, and charged service fees, while drug transactions were directly conducted between patients and foreign hospitals. Intermediaries did not get drugs. And medicine.

Xiong Juan, CEO of Chunyu International, told the First Financial Reporter that in order to prevent legal risks, the organization generally recommends that patients with hepatitis C go abroad to purchase medicines. If it is through remote consultation, the usual practice is to give a letter of entrustment to the immediate family members of the patient. The relatives buy medicines abroad by prescription, and bring them back manually. These follow-up drug sales links have nothing to do with the intermediary.

“The way to bring back is the safest and most compliant.” Xiong Juan told the First Financial Reporter that according to current customs regulations, patients can carry a reasonable amount of self-use drugs with prescriptions.

Carefully not touching the legal red line, there are still unexpected situations that plague intermediaries. Yang Chen told the First Financial Reporter that patients who go abroad to buy medicines generally "buy at the limit", but when there are drug resistance, dressing changes, etc., the drugs can not be sold twice in China.

"Once, a patient with hepatitis C bought two courses of medicine, and the result was a course of treatment. The rest of the medicine was returned to us." Yang Chen was troubled and took the patient's medicine, which may be suspected of breaking the law. Do not accept, but also face the various "threats" of patients. In desperation, he had to pay for his own pockets and patients.

Open the Indian hospital

Overseas medical tourism intermediaries, on the one hand, must obtain domestic sources of tourists, on the other hand, they must establish stable cooperative relations with foreign hospitals. The former is not easy, and the latter is also tortuous.

Yang Chen told the First Financial Reporter that at the time of the initial investigation, the Indian hospital had never treated Chinese patients, and the cooperation between the Indian hospital and the Chinese company was mainly driven by the latter.

Gradually, Yang Chen reached a cooperation with high-end private hospitals such as Apollo Hospital and Max Hospital in India. But cooperation is not always smooth.

“The Indian hospital is very motivated to pack Chinese patients and arrange for Chinese patients to do various tests and physical examinations. Each person charges tens of thousands of yuan.” Yang Chen told the First Financial Reporter that the purpose of Chinese patients is often very clear. It is to buy medicine, there is a clear conflict between the patient and the hospital.

Yang Chen had to try to bypass the hospital and work directly with Indian doctors. He told the First Financial Reporter that at first, through some "green channels", Indian doctors who cooperated with intermediaries could only serve Chinese patients within a certain period of time.

With the development of overseas medical tourism, the relatively gray service model has begun to change. In fact, many overseas hospitals have opened international clinics, for example, Fortis, which provides medical, tourism, translation, accommodation, credit card and other services for international patients.

The First Financial reporter learned that at present, domestic medical tourism companies cooperate with foreign hospitals through contract forms. Under the annual framework, Indian hospitals charge doctors' fees and necessary inspection fees, while intermediaries charge patients for services.

The destinations of Chinese patients going to India for medical tourism are relatively concentrated. In the case of hepatitis C, hospitals provided by intermediaries are concentrated in private hospitals such as Fortis, Apollo, and Artemis. In this regard, Xiong Juan explained to the First Financial Reporter that Indian private hospitals are more developed and the international department is more open, while Chinese guests often do not accept small private hospitals, so cooperative hospitals are relatively concentrated.

Hundreds of institutions fell in a few years

Faced with huge market cakes, more and more competitors are rushing into the game. However, since the rise of medical tourism, countless institutions have quietly risen silently, and have quietly declined. What is truly surviving is also looking for a new way out.

Yang Chen recalled that after the company was established six months ago, he found that similar companies in the market had increased. Due to the similar service model and the same access method, the competitive advantages of each family are not very obvious. Price wars have become the main way to attract patients. "You 5,000 yuan, I am 4,000 yuan, I am 4,000 yuan, you are 3,500 yuan, no way."

The first financial reporter consulted the overseas medical tourism website and found that taking hepatitis C as an example, the current overseas medical tourism mainly provides telemedicine and medical services to India. Among them, the cost of telemedicine is as low as 4,800 yuan, and the highest is 10,000 yuan. The cost of going to India for medical treatment is about 30,000 yuan, including round-trip airfare, accommodation, full-time translation, appointment expert consultation, post-dissection follow-up and short-distance travel services.

With the arrival of the ceiling of the hepatitis C market, Yang Chen’s business is no longer as prosperous as it was at first. Yang Chen told the First Financial Reporter that the company can only send one or two medical tour groups every month, and each group has only 3 to 5 people.

The same situation is more than one, Xiong Juan also told the First Financial Reporter that the number of cross-border medical treatment for hepatitis C patients is depleting. “The year of real outbreak of liver disease cross-border medical care is 2015, the peak is in 2016.” Similar to Kang’an, in 2016, Chunyu International will send 60 to 100 hepatitis C patients to India every month. Now, hepatitis C is not the main one. Business.

Xiong Juan explained to the First Financial Reporter that the cross-border medical tourism business has a band, and if it is limited to single-item products, the ceiling is very low. "Hepatitis C has experienced a two-year outbreak in 2015-2016. In this cycle, many people have actually made money, but now this cycle is nearing completion."

In fact, with the development of China's cross-border medical tourism industry, intermediaries have long since shed their monopolization-oriented model and expanded their business into cancer, reproductive support, and physical examination. Moreover, with the growth in demand for high-end medical services, the United States, Germany, Japan and other places have become new destinations for medical tourism. According to a survey conducted by Stanford Research Institute, the global medical tourism revenue is expected to reach 678.5 billion yuan in 2017, and China will become the main source of medical tourism in the world.

Xiong Juan believes that cross-border medical care is a slow business that needs to be polished. She told the First Financial Reporter that the current cross-border medical market is generally low-frequency. "The total number of Chinese single-patients visiting the United States is about 3,000. The total number of test-tube babies in foreign countries is less than 20,000. The number of medical examinations in Japan is also tens of thousands. If it is limited to single items, the ceiling is very low."

At present, the opaque price and lack of professional ability still restrict the development of medical tourism intermediaries. In Xiong Juan's view, intermediaries must enhance their professional ability by enhancing their professional attributes.

Yang Chen told the First Financial Reporter that the traditional way of obtaining medical travel agents is mainly Internet promotion and acquaintance introduction. In order to enhance competitiveness, it is necessary to develop functions that other institutions cannot. To this end, he and the team spent two years developing a database containing nearly a million drug prices in 38 countries around the world, while presenting standard clinical guidelines for these countries to patients in graphic form, on the one hand to promote price transparency. On the one hand, help patients make better medical decisions.

In addition, in view of the current high cost of medical tourism, Xiong Juan believes that telemedicine will become a solution. “Using remote technology can further shorten the distance between patients and overseas hospitals, reduce costs, and be more versatile.”

"In a few years, hundreds of institutions have risen, and hundreds of institutions have fallen. These tens of thousands of cakes are not everyone can insist on the final to seize." Xiong Juan told the First Financial Reporter. (First Finance)

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