July 6, 2019，Recently, inspectors of China Times uncovered major cases of fake drugs sales by YSBANG.CN. A majority of the several types of products purchased from the e-commerce websites were proven to be counterfeit products.

Notably, the fritillaria cirrhosa shipped by YSBANG.CN demonstrated conspicuous differences from authentic products, according to assessment by medicine professionals. Reporters of China Times later submitted these reported counterfeit drugs to officially approved Drug Inspection agencies, and DNA testing results further corroborated previous assessment. It is reported that the local drug regulatory authorities have confiscated the fake drugs and solidified the evidence, and will punish the YSBANG.CN in accordance with the relevant laws and regulations.

 Industry experts said that fritillaria cirrhosa, a type of traditional Chinese medicine (TCM) material that helps relieving coughs, is of precious value and favored by many Chinese families. However, some companies have been reported of replacing fritillaria cirrhosa with much cheaper fritillaria thunbergii seeds, which is somewhat similar in appearance. In fact, misinformed intake of fritillaria thunbergii could potentially lead to serious health damage and even deaths.

Unfortunately, the batch of fritillaria cirrhosa sold by the YSBANG.CN platform (batch number 18050100, manufactured by Hubei Shi’an Herbal Pharmaceutical Co,Ltd.) had already been shipped to pharmacies and clinics all over the country. Tianyancha Enterprise Database shows that the chairman of the Hubei-based manufacturer, Chen Zhigang, was arrested in 2017 by Hubei Huangmei County Public Security Bureau on suspicion of colluding bidding and bribery to non-state functionaries, and had been taken bail pending trial. YSBANG.CN 's failure to strictly examine suppliers’ qualification has seriously violated China's laws and regulations on drug safety control.

Earlier, The Economic Observer reported that YSBANG.CN was involved in the illegal sales of a series of drugs explicitly prohibited or restricted to online sales by the Chinese government, including toxic drugs and pregnancy termination drugs. There were also accounts of individual buyers who received expired Clostridium Butyricum Powder and "refined tetanus antitoxin" from YSBANG.CN. Both of these products normally required cold-chain shipment and have been labeled accordingly on their product information webpage on YSBANG.CN. However, buyers have reported that these products were in fact shipped by regular express delivery vans that had no cold-chain facilities, which eventually render the drugs ineffective. Such malpractices have led to several punishments and fines from regulatory authorities on YSBANG.CN.

However, recently, it is said that GGV Capital, a famous venture capital which has 6.2 billions US dollars under management and set up offices both in the US and China, will invest millions of US dollars into YSBANG.CN. According to the homepage of GGV Capital, GGV Capital raised most of it money from pension funds, rich families and endowment funds of universities in the U.S. Our reporter tried to reach to Mr. Jixun Foo, managing partner of GGV Capital, who is from Singapore and graduated from Stanford University, but Mr. Jixun Foo refused to comment.

 The "Drug Administration Law (Revised Draft)", submitted to the 13th National People's Congress Standing Committee for the second review on April 20, 2019, clearly stated that strengthening the regulation of online drugs sales is a must for government, and prescription drugs should be prohibited from being directly sold through third-party e-commerce platforms. If the draft is approved after the third review, all third-party online drug sales channels in China, including both for B2B and B2C, will be prohibited by laws from selling prescription drugs. In other words, the business model of YSBANG.CN will no longer exist.

 On June 27, 2019, China’s Ministry of Public Security held a press conference to inform the public of the results by public security authorities across the country in cracking down on food and drugs safety crimes. The newly established Food and Drug Crime Investigation Bureau made its debut after the institutional reform. The first director of the bureau, Lu Wuqin, said that tackling crimes involving food and drug safety requires a tough hand and firm upholding of the laws and regulations. Toughest punishment would effectively deter future attempts of crimes in this field, Lu said.   At the same time, the bureau also pointed out that in response to the prominent situation of online food and drug crimes, it will launch a new round of anti-counterfeiting campaigns with relevant government departments, strengthen contact and cooperation with Internet companies, and conduct in-depth investigations and crack down on the sale of fake drugs on e-commerce platforms. Moreover, the bureau will continue to keep a close eye on online sales networks of food, health supplements, and biological products.

Experts said that the establishment of the State Administration for Market Regulation and the upcoming approval of the "Drug Administration Law (Revised Draft)" as well as the setup of Food and Drug Crime Investigation Bureau of the Ministry of Public Security shows joint determination across government institutions and will greatly strengthen regulatory capacity against sales of counterfeit drugs in China.