(Yicai Global) Jan. 6 -- Chinese wholesale drug distributor Zhengzhou Xiaoyaoyao Pharmaceutical Technology has been penalized CNY2.6 million (USD380,000) by market regulators for excessively hiking the price of the fever-reducing medicine ibuprofen, now in high demand amid a flare-up of the novel coronavirus, as watchdogs crack down on Covid-19 drug profiteering.

Xiaoyaoyao, which sells medicines to drugstores and clinics through its ‘Pharmaceutical Help’ e-commerce platform, was found guilty of hiking the price of ibuprofen eight-fold to CNY19.80 (USD2.90) per bottle on Dec. 24 from CNY2.43 on Dec. 10 yet its purchase costs remained unchanged, according to the latest batch of rulings released by the State Administration of Market Regulation on Jan. 4.

As Xiaoyaoyao supplied more than 30,000 bottles in that round, this led to a huge increase in the price of ibuprofen in many places across the country.

"We started the business to try to solve problems in drug distribution through the use of technology, to streamline and shorten the process, so that pricing is more transparent and fair," Chief Executive Officer Li Zeng said earlier.

Xiaoyaoyao is owned by Hubei Small Drug Information Technology, a wholesale pharma firm that counts large private equity firms such as Source Code Capital, Sequoia Capital China and Tencent Investments among its investors, according to corporate data platform Tianyancha. A director of Hubei Small Drug is also a founding partner of Source Code Capital.

Editor: Kim Taylor