A Bitter Pill for Pharmaceutical Counterfeits: Behind China’s Serialisation Technology

In January 2014, CITIC 21CN Technology Company Limited (CITIC), a firm that had been under the radar, took the Hong Kong stock market by storm after its stock price soared 372% upon Alibaba Group’s acquisition. Alibaba, the world’s largest e-commerce company, took a controlling stake of CITIC and subsequently renamed it AliHealth.

CITIC had operated a state-owned pharmaceutical product monitoring platform overseeing the massive supply chain of manufacturers, distributors, drugstores, and medical organisations in China. Developed in 2006, the proprietary system was used for pharmaceutical serialisation aimed at safeguarding public health. Using cryptography-based authentication and traceability technologies, the system efficiently traces illegal activities across the supply chain from manufacturing to point of use and expedites recalls of counterfeit medicine.

Given China’s plan to extend the serialisation mandate to all categories of medicine, the company appears poised for strong growth in the coming years. To scale the system, what more could have been done? Should the system adopt the latest blockchain technology? Should the company dedicate more effort to strengthen stakeholder engagement?

Students will learn how cryptography technology can be used in anti-counterfeiting solutions, especially on e-commerce platforms which has become a boon for fake goods. There are also opportunities for students to learn to differentiate between centralised and decentralised network systems (with reference to blockchain technologies), determine stakeholder salience and buy-in, as well as evaluate entrepreneurship exit options.

Inspection copies and teaching notes are available for university faculty. To receive an inspection copy and teaching note, please email cmpshop [at] smu.edu.sg ( )with your registered faculty email ID and a link to your contact information on the faculty directory at your university as verification. An inspection copy and teaching note will then be sent to your faculty email account.

Download Information

SMU Faculty/Staff can download the case & teaching note on iNet with your SMU login ID & Password via the following links:

· The Case (SMU-21-0009)

· Teaching Note (SMU-21-0009TN)

For purchase of the case and supplementary materials via The Case Centre, please access the following links:

· The Case (SMU-21-0009)

· Teaching Note (SMU-21-0009)

For purchase of the case and supplementary materials via Harvard Business Publishing, please access the following links:

· The Case (SMU-21-0009)

· Teaching Note (SMU-21-0009)