BFAR subsidiary signs agreement to acquire ZHRK

BioPharm Asia, Inc. (OTCBB: BFAR)("BFAR" or the "Company"), a producer, distributor and retailer of medical products in China, today announced that its wholly-owned subsidiary, China Northern Pharmacy Holding Group Limited, has entered into an agreement (the "Agreement") to acquire all of the outstanding shares of Beijing Zhihe Ruikang Hospital Management Ltd. ("ZHRK"), a professional Chinese hospital management consultation group, for a consideration of RMB2,400,000 (approximately $350,000). The Company expects to complete the acquisition of ZHRK by early July, 2010.

“With the acquisition of ZHRK, BioPharm Asia will be well-positioned to expand the services it provides to hospitals which currently acquire medical products from BioPharm's distribution segment. ZHRK's expertise also enables BioPharm Asia to potentially acquire privately owned medical care facilities.”

Since its inception in 2004, ZHRK has provided management consultation services to approximately 30 Chinese hospitals, frequently increasing revenues by 40%-50% while improving the quality and efficiency of their operations. ZHRK has worked in collaboration with premier institutions of higher education (such as Peking University, Fudan University and Shandong University, etc.) to develop techniques improving the management of medical and health care services and systems. An example of this is its program with Peking University which resulted in a comprehensive medical management services improvement program including system design, training and the introduction of medical technology to upgrade the patient reporting and tracking, which is now in use in numerous Chinese medical institutions.

As medical services in China have expanded, the hospitals need to balance sustained growth with cost control, patient care quality assurance, and management efficiency. ZHRK assists its clients by implementing reporting systems and procedures to increase visibility into the critical operations of medical care, installing systems to automate manual recording to increase efficiency and reduce the occurrence of errors, and establishing key performance assessments against benchmarks. Advisors such as ZHRK are being used to improve the efficiency and operations of hospitals in China as recent government reforms require Chinese hospitals to upgrade their services and quality assurance.

"With the acquisition of ZHRK, BioPharm Asia will be well-positioned to expand the services it provides to hospitals which currently acquire medical products from BioPharm's distribution segment. ZHRK's expertise also enables BioPharm Asia to potentially acquire privately owned medical care facilities." Mr. Wenzhong Qin, the CFO of the Company commented. He continued, "With the addition of this capability, BioPharm Asia will assist in upgrading the quality of China's medical services, thus creating a promising new profit source for the Company."