Hanwen XueChief Information Officer · Essays & perspective
Portrait of Hanwen Xue
Hanwen Xue
Chief Information Officer · China

A selected perspective

Drug traceability5 min read

The medicine pack and the patient's data

Scanning traceability codes at insurance settlement has moved the discovery of code errors to hospital pharmacies and dispensing windows. Most of those errors are created earlier, when packs are associated with cartons, and distributors should find them there.

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The portfolio

From idea to consequence.

I

Verifying manufacturers' code data before hospitals scanned it

In the first half of 2024 our nine logistics centres received about 1.6 million cartons a month from roughly 2,400 manufacturers, and hospitals in Sichuan and Chongqing had begun scanning each pack's traceability code as medicines were dispensed under insuranc

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II

Narrowing the IT estate when procurement reform took the margin

By 2022 volume-based procurement had cut the prices of several hundred medicines and many high-value consumables, and our gross margin on hospital distribution had fallen from 6.4 per cent in 2019 to 5.6 per cent.

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III

Keeping pharmacy patient data in China when principals asked for it abroad

In 2022 we distributed medicines for 41 multinational manufacturers, and most of their contracts required us to send daily flow data, showing sales by hospital, batch and quantity, to regional data platforms outside China.

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I judge a system at the counter where someone is waiting for it, and a data flow by what its recipient will decide with it.

The journal

Further reading.

  1. 02

    IT economics5 min read

    Narrower, not thinner: the IT budget after volume-based procurement

    Volume-based procurement has cut distributors' margins on the medicines it covers. The usual response, an even cut across the IT budget, weakens the systems the new model depends on. Retiring whole applications protects them.

  2. 03

    Hospital data and personal information5 min read

    Move the message, not the medical record

    Suppliers increasingly offer hospitals free hosted services that hold copies of patient-linked data. A supplier rarely needs those copies. Integration should carry the minimum message a transaction requires and leave the record in the hospital.

Group revenue, 2025
RMB 46.8 bn
Medicines and consumables delivered to about 3,100 hospitals in four provinces
IT colleagues led
386
With about 140 contractors across Chengdu and nine logistics centres
Carton code errors at receipt, 2025
0.05%
Down from 0.84 per cent before verification began in 2024

A medicine distributor's systems are tested in two places: the hospital counter where a pack is scanned, and the moment a patient's data is asked to travel.

I am chief information officer of Shuheng Medical Supply Chain Company Limited, a fictional Chengdu-based distributor of medicines and medical consumables, listed on the Shenzhen Stock Exchange and controlled by a Sichuan provincial state-owned investment group. In 2025 we earned revenue of RMB 46.8 billion, most of it by delivering medicines to about 3,100 hospitals and 16,500 primary-care institutions across Sichuan, Chongqing, Guizhou and Yunnan. We also run 680 pharmacies, 42 of them specialist pharmacies dispensing high-cost medicines direct to patients, and we manage consumables inside 58 hospitals on their behalf.

Our margin is thin, about 7 per cent gross and under 2 per cent net, and almost everything that protects it is information: the electronic delivery note a hospital's pharmacy system accepts or rejects, the traceability code on each pack, the settlement record the medical insurance fund pays against. I came to this work from the hospital side. I spent my first seventeen years in hospital information systems, as an engineer and later director of information at a teaching hospital in Chengdu and, between those posts, implementing systems for a software vendor across the southwest. I then ran IT for a European drug maker's China business in Shanghai before joining Shuheng in 2019.

Two changes outside our control have shaped my time as CIO. Volume-based procurement cut the prices of hundreds of medicines, and with them the margin from which my budget is paid. Personal-information and data-security law made patient data, which our pharmacies and hospital services touch every day, something that must be justified before it moves. My answer to both has been the same: fewer systems, each kept in better order, and data held where the patient was treated unless there is a lawful and specific reason for it to travel.

Codes checked at the carton

Since 2024 we have verified manufacturers' carton-to-pack code associations at receipt in all nine logistics centres. Errors in received cartons fell from 0.84 per cent to 0.05 per cent, and code-related rejections at hospital receipt from 1.9 per cent of delivery lines to 0.2 per cent.

A smaller estate after procurement reform

When volume-based procurement compressed our distribution margin, I retired 162 of 438 applications instead of cutting every budget evenly. IT run cost fell from RMB 172 million in 2022 to RMB 131 million in 2025, while security spending more than doubled.

Principals' data kept onshore

When 41 multinational manufacturers asked for daily flow data on their regional platforms abroad, we built an onshore portal of hospital-level data containing no personal information. Forty accepted it. The forty-first moved two oncology products elsewhere, costing RMB 540 million of annual revenue.

Hospital data left in the hospital

Our consumables service runs inside 58 hospitals, each instance within the hospital's own network and protection grading. We receive item-level usage without patient identifiers, an approach that lost us four tenders in 2020 and later won us seven of nine re-tenders.

Current focus

I am preparing a paper for our board's Strategy Committee on electronic prescriptions flowing from hospitals to our pharmacies under outpatient insurance pooling, and on the consent, retention and audit trail each prescription needs. Alongside it, we are replacing the last warehouse system inherited from an acquired distributor, so that every logistics centre scans and reports codes in exactly the same way.

Conversations I welcome

I am not seeking to leave Shuheng. I would consider one independent directorship at a listed company in a regulated, data-heavy business that does not trade with us, with my company's approval and a conflicts review, offering about twenty-five days a year. I accept a small number of speaking invitations from hospital, insurance and supply-chain audiences on traceability and health-data governance.

Beyond the page

The record behind the perspective.

In the boardroom

  • Shuheng Digital Health Technology Company LimitedDirector of the wholly owned subsidiary, in an executive capacity · 2022–present

Formation

  • Bachelor of Engineering, biomedical engineeringWenshui Institute of Engineering · 1998
  • Master of Business Administration, part-timeLinyuan School of Management · 2018
When Hanwen ran our information department he measured every system by the outpatient pharmacy queue, and he brought me the waiting times each month before any project report. When suppliers asked for our patient data, he asked them in front of me what they would decide with it. Most could not answer.
Shufen RaoFictional former president, Yuejiang General Hospital
The full record ↗

Contact

I am not seeking to leave Shuheng. I would consider one independent directorship at a listed company in a regulated, data-heavy business that does not trade with us, with my company's approval and a conflicts review, offering about twenty-five days a year. I accept a small number of speaking invitations from hospital, insurance and supply-chain audiences on traceability and health-data governance.

  • Board appointments
  • Speaking invitations