Penalties for Black Marketing of Medicines

Introduction

Black marketing of medicines refers to the illegal sale, hoarding, diversion, or resale of medicines at excessive prices, particularly during shortages, emergencies, or public-health crises. It may include selling essential medicines above legally permitted prices, creating artificial scarcity, diverting government-supplied medicines into private markets, or selling counterfeit and unlawfully stocked drugs.

In India, such conduct is regulated through the Essential Commodities Act, 1955, the Drugs and Cosmetics Act, 1940, and the Drugs (Prices Control) Order, 2013 (DPCO), along with other applicable laws. The penalty depends on the specific offence; overpricing, hoarding, counterfeit medicines, and unauthorised sale are distinct legal violations.

Statutory Penalties

Essential Commodities Act, 1955, Section 7: Violations of applicable control orders, including the DPCO, can result in imprisonment and fines. Contraventions falling under Section 7(1)(a) may attract imprisonment from three months up to seven years, plus a fine, subject to statutory provisions and judicial discretion.

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Drugs and Cosmetics Act, 1940, Section 27: Serious offences involving adulterated or spurious medicines can attract substantial imprisonment and fines. For certain spurious drugs, the statutory punishment can extend to life imprisonment, with a minimum fine prescribed by the Act.

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Prevention of Blackmarketing and Maintenance of Supplies of Essential Commodities Act, 1980: Where its requirements are met, authorities may order preventive detention to stop activities threatening the supply of essential commodities. Detention is preventive, not a substitute for proving criminal guilt at trial.

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Important Case Laws

1. In Re: Distribution of Essential Supplies and Services During Pandemic, Suo Motu Writ Petition (Civil) No. 3 of 2021

During the COVID-19 crisis, the Supreme Court took judicial notice of reports that essential medicines, including Remdesivir and Tocilizumab, were being sold at inflated prices or in fake form. The Court urged the government to consider identifying and prosecuting those selling medicines and medical oxygen at exorbitant prices and those selling counterfeit substances. The observations demonstrate the seriousness of exploiting patients during a public-health emergency.

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2. Sarabjeet Singh Mokha v. The District Magistrate, Jabalpur, (2021), Supreme Court of India

The case arose from allegations concerning the procurement and administration of fake Remdesivir injections during the COVID-19 pandemic. The Supreme Court examined procedural safeguards governing preventive detention, including the detainee’s right to make a representation. The case illustrates that authorities can respond to serious medicine-related misconduct, but detention must comply with constitutional and statutory safeguards. It was not a final criminal conviction for black marketing.

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Conclusion

Black marketing of medicines may lead to imprisonment, fines, seizure of stock, recovery of overcharged amounts, prosecution, and, where legally justified, preventive detention. The applicable penalty depends on whether the conduct involves unlawful overpricing, prohibited hoarding, unlicensed sale, or counterfeit and adulterated drugs. The objective is to protect access to essential medicines, prevent exploitation of patients, and ensure that enforcement remains consistent with due process.