The food and drugs regulatory board of China has halted the implementation of a drug-coding system managed by Alibaba Health Information Technology Ltd, while the department is currently revising its policy on monitoring pharmaceutical sales.

In an official statement released on Saturday, the China Food and Drug Administration (CFDA) said it will seek public comments until March 23 with regard to the latest amendments on how pharmaceutical products will be supervised, including its online sales. However, Ali Health claimed on Sunday that it has not received CFDA's notice.

Like Us on Facebook

The suspension came after Ali Health's was dragged into the issue of medical products authenticity. Yontinhe Group, a pharmacy based in Hunan, revealed last month that it is filing a lawsuit against CFDA over its monitoring system that allegedly gives Ali Health an unfair advantage.

Following the news, stakes of Ali Health drastically dropped over concerns that the company might lose the license to run its business, formally called the Product Identification, Authentication and Tracking System (PIATS).

However, according to a filing with the Hong Kong stock exchange late on Sunday, Ali Health has not received any notification yet from CFDA requesting it to stop giving technical aid and maintenance services on the platform. The filing thus stipulated that the company will still go on with its operations and provision of services as well as communicate closely with the CFDA to continue under the administration's direction.

Alibaba Group has, meanwhile, refused to comment on the issue.

China is the second biggest pharmaceutical market next to the United States and is a magnet for pharmaceutical companies, hospital operators and medical device makers.

TagsAlibaba, Ali Health, China Food and Drug Administration