111 to Collaborate with U.S. Pharmaceutical Company Eli Lilly
The Shanghai-based company said it will serve as Lilly’s designated e-prescription platform to be in compliance with regulations for prescription drug distribution through retail pharmacies in China.
111 Inc. (Nasdaq: YI), China's largest pharmaceutical retailer, announced it signed a strategic cooperation agreement with Eli Lilly, a U.S.-based pharmaceutical company, to jointly develop online medical insurance and pharmacy benefit management models.
The Shanghai-based company said it will serve as Lilly's designated e-prescription platform to be in compliance with regulations for prescription drug distribution through retail pharmacies in China. The two companies also aim to expand new retail channels, such as private hospitals and pharmacies through 111's online B2B model.
According to "2018 China Pharmaceutical Market Development Blue Paper," B2B and B2C channels are the only way to increase a pharmaceutical company's revenue as the growth of traditional pharmaceutical distribution channels has been slowing down.
"111 is among the top in the industry in terms of the development and exploration of pharmaceutical new retail," said Julio Gay-Ger, president and general manager of Lilly China. "Together we will fully leverage our respective competitive advantages in the healthcare and pharmaceuticals sector to improve distribution resources and technological innovation which will greatly improve drug accessibility and benefit the vast majority of Chinese patients."
111 was founded eight years ago by Gang Yu and Junling Liu, who have been partnering on entrepreneurial projects for more than a decade. Former executives at Dell Inc., the two co-founded Yihaodian, or YHD.com, an e-commerce platform acquired by Walmart, and subsequently by China's giant, JD.com Inc. (Nasdaq: JD).
For the third quarter ended Sept. 30, 111 reported revenue of $72.5 million, double the level from the same period last year thanks to a significant increase in product revenues from the B2B segment. However, the net loss for July through September was $18.4 million compared with a loss of $9.05 million a year ago.
In 2016, 111 became China's largest online pharmacy in terms of gross merchandise volume, as reported by consultancy Frost & Sullivan. According to the same report, the company's virtual wholesale pharmacy network, 1 Drug Mall, is the largest in the world.