Hoarding and Black Marketing of Covid-19 Medicines; Reality and Laws

The second wave of Coronavirus has hit and exploded in India in the most unanticipated and gruesome manner. This second nationwide wave of the Covid-19 pandemic has broken many records from the steep rise in the daily number of positive cases to the daily number of deaths, the shortage of hospital beds, and to unavailability of oxygen and medicines, the country has seen it all. The healthcare workers are stretched beyond capacity and clearly & lsquo the healthcare system in India has collapsed. The reality is grim, to say the least. The deluge of infections in the country has led to a severe health crisis and with this, we have another problem at hand - the shortage of medicines, leading to a much bigger problem - the hoarding and black marketing of necessary medicines and medical oxygen.
 

Shortage of Medicines - Real vs Artificial

As the Covid-19 cases surged in the country, so did the demand for key medicines used in the treatment of Coronavirus patients. These medicines include Remdesivir, Tocilizumab, Favipiravir, Medical Oxygen, etc. As the demand increased, a somewhat artificial shortage was created due to hoarding, black marketing, and indiscriminate usage of these important medicines. This initial artificial shortage resulted in jacked-up prices. Individuals, chemists, and middlemen bought and held a chunk of these medicines, waited for scarcity as predicted due to the rise in Covid-19 cases in the country, and are now selling these medicines at sky-high and outrageous prices, thereby gaining huge profits out of others' desperate times. Selling medicine above the fixed price is a crime in India. It has been seen that a single dose of Remdesivir is being sold at a price 15-20 times more expensive than its fixed price. Even oxygen cylinders, refilling of oxygen and other medicines are being sold at immorally excessive prices. Initially, an artificial scarcity had been created, which resulted in people taking desperate measures and buying the drug at throwaway prices. The criminal mind is taking advantage of the rising demand for such essential or key medicines. Doctors prescribing these medicines, urgent appeals on social media for these medicines, and the floating of numbers of providers of these medicines, all added to the rise in demand and the ease of selling to many at exorbitant rates. With all the confusion and urgency related to the medicines to treat Covid-19 patients, it is now in the grey if the current medicine shortage is a real or an artificial one. However, one thing that is clear is that there are people that are capitalizing from other people's miseries in such dire times.
 

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Actions were taken to Curb the current Menace of Black marketing of Covid-19 Medicines

The State Governments and Courts in India are realizing the issue of black marketing and hoarding of Covid-19 medicines and are finally taking some steps to help curb the same. The State Governments have been asked to take stringent action against any person found indulging in black marketing or hoarding essential medicines such as Remdesivir. In order to stop the scarcity and in turn the hoarding and black marketing of Remdesivir, the manufacturers have been asked to amp up the production and make it readily available for the treatment of Coronavirus. The Delhi High Court on 20th April 2021 directed the Centre to check the hoarding of essential and life-saving drugs in the midst of a record spike in Coronavirus cases in India. The Court asked the Centre to act against those who are hoarding medicines and also to come out with some rules and regulations to stop the menace. The Centre was directed to interact with the manufacturers, patent holders, and licensees to ramp up the capacity of medicines like Ivermectin, Dexamethasone, and Prednisolone. The Odisha Police recently conducted a verification drive across several districts to check the hoarding and illegal sale of Covid-19 essentials in the State. The drive was conducted at various hospitals, nursing homes, pharma stores, and firms. Several persons in different States such as Lucknow, Odisha, and Gujarat have been held for black marketing of Covid-19 medicines. These include doctors as well. The Noida Police has recently busted black marketing of Remdesivir injections for Rs. 40,000 each. The Crime Branch of Kanpur Police Commissionerate has busted an entire oxygen-black marketing racket and recovered around 51 oxygen cylinders from them.
 

Laws against Black marketing and Hoarding in India

In order to understand the problem of shortage, hoarding, and black marketing of Covid-19 medicines in India and to not add to the issue further, it is imperative that we understand what these terms mean and what the laws are.

What is Black Marketing?

Black Marketing is the illegal distribution or transaction of goods and services that are prohibited by law. For example, drug trade, prostitution, illegal currency, human trafficking, etc. The main purpose behind these transactions is to earn profits and evade tax. Since these transactions are illegal, they are generally done in cash. The Black Market can be identified by 4 kinds of economy a) The Illegal economy (which includes indulging in activities related to the production and distribution of goods/services that are prohibited by law in order to earn money/taxes), b) The unreported economy which includes (indulging in activities consisting of transactions that are to be reported to the government or authorities of that country but these are not reported.), c) The unrecorded economy (which relates to activities such that make an individual avoid reporting of actual income and in turn evade tax), and d) The informal economy (which includes that part of the economy that is not taxed.)
 

What is Hoarding?

Hoarding is the illegal act of purchasing large quantities of a commodity with a mal intention to sell that commodity at a much higher price, at a time when it is not available in the market or is not in stock or understocked. Hoarding is kind of making a monopoly over a market for a particular commodity. Thus, when huge quantities of a commodity are stocked and sold only when that commodity is scarce, at extremely high prices, and the buyer is bound to buy due to a shortage of the same, it is called hoarding. Hoarding and black marketing can be said to be interrelated and both of these kinds of transactions are prohibited by law. Persons indulge in hoarding to maximize their profits by such unfair means of trading/business. Hoarding is generally done with basic or essential goods that are used by a large number of people. Thus, at such times, the Covid-19 medicine was largely in demand and hence is being hoarded and black marketed. Hoarding is not the same as cartelization the latter, there are a number of sellers/suppliers or manufacturers that come together and decide to limit or hold back the supply for s period of time to invoke a shortage or scarcity and then create a monopoly to maximize their profits by raising the prices of that commodity. Hoarding, however, involves individual participants trying to capture the market.
 

The Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act 1980

In order to prevent unethical trade practices like hoarding and black marketing, the Prevention of Black marketing of Supplies of Essential Commodities Act, 1980 is being implemented by the State Governments in India in order to catch hold of and detain persons whose activities are found to be prejudicial to the maintenance of supplies to commodities that are essential to the community. This Act prohibits the participants to indulge in black marketing and hoarding transactions. It empowers the State Govt. or Central Govt. to make orders to detain persons indulging in hoarding or black marketing activities. The district magistrates and even the commissioner of police have powers to take action against such criminals of the society.

Thus, anyone doing black marketing or hoarding Covid-19 medicines is doing illegal activity and can be punished for the same. The Act covers all essential commodities like medical oxygen.

Who Regulates Medicine in India?

Several Regulations and guidelines and organizations have been enacted and set in the country to govern different aspects of medicine in India.

1. Central Drugs Standard Control Organisation (CDSCO), Ministry of Health and Family Welfare, and GOI provide general Information about drug regulatory requirements in India.

2. Drugs (Price Control) Order and National Pharmaceutical Pricing Authority (NPPA), GOI, aid in controlling and setting prices for medicines.

3. The Drugs and Cosmetics Act 1940 regulated the importing, manufacturing, distributing, and selling of drugs in the country.

4. The Pharmacy Act 1948 regulates the profession of Pharmacy in India.

5. The Drugs and Magic Remedies (Objectionable Advertisement) Act, 1954 regulates and controls advertisements regarding medicines/drugs and prohibits the advertising of remedies alleged to possess magical qualities.

6. The Narcotic Drugs and Psychotropic Substances Act, 1985 controls and regulates the operations of Narcotic and psychotropic substances in India.
    

How can you Report such Illegal Activities and Why do you need a Lawyer?

As stated earlier, hoarding and black marketing of essential commodities as per the Essential Commodities Act and the Prevention of Black Marketing Act is a criminal activity and an accused charged with black marketing and/or hoarding can attract penal provisions involving penalty and imprisonment or both. It is important to report any and every act of hoarding and black marketing of Covid-19 medicines at this time. If you or anyone you know has been on the receiving end of such acts, it is imperative that you report such persons to the Police. You may call the police helpline number and report their name, number and activity. You can also file an FIR online if you have had to pay an exorbitant rate, over and above the actual price of that medicine. If you have any confusion regarding what should be done if you encounter such a case, you can speak to a criminal lawyer who will help you understand your way forward and will guide you according to the facts and circumstances of your case. It is important to punish the wrongdoers to set an example for other criminals, and also to ensure that that criminal does not deceive more desperate persons looking for essential Covid-19 medicines or medical oxygen. Not only is such black marketing and hoarding causing worry and nuisance in the Country, but there are also several fraudsters defrauding desperate persons in need of medicines by taking advances and then blocking their phone numbers. It is thus very important to be vigilant even in such times. The battle is far from won but if we are aware of the misdeeds and the laws, we can help curb the bigger problem with the small steps that we take today.

Advocate Chikirsha Mohanty

Greater Kailash - 1, Delhi
5 years

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