Harsh Mander: How some exploited India’s Covid-19 crisis to make money

In years to come, the sombre memory motifs of the tumultuous summer months of 2021 that must haunt our conscience would not just be of the cremation pyres on city sidewalks, the shallow mass graves, the rotting floating bodies and the uncaring and absent state, but also the cruel extortion from desperate, despairing, dying people by all who could exact from them, from corporate leaders to the smallest providers of medical and funeral essentials.

A young lawyer in the National Capital Region trying to organise oxygen supplies to as many people as she could, spat out her words. She described those selling oxygen and drugs in the black market as vultures. “You are standing in front of me with something that might save me and you are looking at my pocket,” she said to the Hindustan Times.

Adar Poonawalla, the 41-year-old son of India’s eighth-richest man, from whom he inherited the world’s largest vaccine manufacturing company, Serum Institute of India, bemoaned the fact that while he was making profits, he wasn’t making “super profits”.

There was no moral anchor to persuade him that this was instead a time for a more humanitarian form of capitalism. Aided by Indian government policy to create a private duopoly in vaccine manufacture, of the Serum Institute of India and Bharat Biotech, he entered into a contract with the British-Swedish company AstraZeneca to manufacture Covishield and captured 90% of India’s vaccine market.

Serum made profits of up to 2,000% and Bharat Biotech up to 4,000% on vaccines sold to private hospitals in India. And for exports, Serum charged poorer countries up to $7 for the same vaccine that the European Union was getting from AstraZeneca at $2. Not for nothing did he gain the epithet of becoming the “vaccine prince”.

Poonawalla’s defiance of the premise of moral responsibility during a time of immense collective suffering was not singular. It had become the common moral touchstone of anyone who held any kind of power during the pandemic.

Rohit Jangam, a priest in Satara, Maharashtra, told the Hindustan Times that many priests there were refusing to enter crematoriums out of fear, and it was only those who were willing to do so who were charging higher prices. “It is too risky to perform the last rites of those who died because of coronavirus,” he rationalised. “If someone asks, I do, but I charge more since I am taking the risk.” He did not agree to disclose how much more he was charging.

Ashok Khondare, a 39-year-old vegetable seller in Pune, borrowed money to pay the high fees that a private hospital demanded to treat his sister who went down with Covid-19. But two weeks later, she died. However, his financial challenges did not end after he struggled to clear the hospital bills, the Hindustan Times reported.

The hearse driver charged Rs 5,000 for a 6-km journey to the nearest crematorium, five times higher than the going rate. When the family reached the crematorium, they found a long queue of dead bodies. The crematorium staff told him that he would need to wait more than a day to get his slot – unless he paid Rs 7,000 to jump the queue. He agreed. “I had been experiencing a terrible situation for a fortnight,” he explained. “I could not sleep or eat properly. I wanted to end this as early as possible.”

Paneer Selvan, a mechanic from Tamil Nadu told DW “I was asked to pay cash upfront for a bed and finally when my mother was discharged after a week, the hospital gave me a bill of nearly Rs 2,00,000, which is too much”.

Rajan Shukla, a public health official, described this as “daylight robbery”. Given the unprecedented circumstances aggrieved families face, they have no option but to pay to these “ruthless marketers”, he said. In some states, courts chose to intervene over the pricing in hospitals.

The Kerala High Court indicted private hospitals for “looting” patients. “We found unconscionable billings, Rs 22,000 for personal protective equipment kits,” the court observed. “Look at the bills. We saw that the humble rice gruel is charged at Rs 1,300.”

It added: “Imagine the plight of a citizen who earns Rs 1,000 and sees a bill of Rs 2 lakh-Rs 3 lakh. We are seeing infections rising rapidly. This is not an isolated case. Anyone can catch the infection now. You are looting people. Think about it, we have to intervene now.”

Overcharging by hospitals

Corporate hospitals charged much above their usual high prices for hospital beds for the few Covid-19 patients who could access these – drugs and oxygen supplies vanished into the black market. Fly-by-night ambulance drivers with spluttering vehicles often bereft of trained health personnel and oxygen supplies charged many times higher prices than in normal times to transport patients to hospitals.

The costs of funeral hearses peaked, oxygen cylinders and concentrators again could be bought at prices shockingly higher than their market prices. Even the prices of firewood for cremations soared dizzyingly, as did the fees of funeral workers, grave-diggers, priests and boatmen who took grieving relatives mid-stream in rivers to cast the ashes into running water.

In earlier parts of this series, we encountered the marketplace that cremation grounds had become. We also looked from time to time at the unconscionable extortion by corporate hospitals. From the start of the pandemic, it is estimated that the private, mainly corporate health care system contributed to handling less than 10% of the Covid hospital load. This despite having two-thirds of all hospital beds in the country, four out of every five trained doctors, and four out of five ventilators.

Reports came in from around the country, during both waves, of private hospitals refusing to admit patients, and suspending services in order to play safe. Many hospitals locked themselves down even for non-Covid health care. The reasons they gave for this abdication of responsibility were thin: that they lacked internal protocols to handle the pandemic, feared infection to their own doctors and nursing staff, and did not want to risk the business from non-Covid patients.

Several private establishments treating even non-Covid cases shut down even critical procedures like chemotherapy and dialysis, even obstetrics and OPDs, citing increased costs and reduced footfalls.

Profit maximisation prioritised

And even the services that were supplied were available at shockingly high rates. One official wondered when the private sector would aim for a welfare maximisation model and not a profit-maximisation model. But the story was of super-profit maximisation by corporate hospitals all the way.

Dr Parang Mehta, a paediatrician running his own practice in Surat remarked, “Even businesses should have a moral compass and refrain from exploiting human desperation.” A Covid-19 patient in Mumbai complained, “I was admitted [to a private hospital] for 19 days and when I got the bill, I realised that 50% of the bill was for PPE kits, masks and face shields. The bigger shock was when my insurance company refused to pay for these, which meant I got only 50% of the amount from the insurers.”

This was the experience in every corner of the country. In Delhi, a private hospital charged Rs 80,000 for PPE kits for nine days of hospitalisation. A patient’s brother reported that for the first two days they were charged Rs 4,300 and then for the remaining seven days, Rs 8,900 for each kit which was being used.

One patient from Tiruchirappalli told The BMJ that she and her elderly mother were charged Rs 3,20,000 for a room and treatment for 11 days, but the insurance company agreed to cover only Rs 100,000 (although her annual medical insurance cover was of Rs 50 lakh) because the remainder was unwarranted costs that should not have been charged by the hospital.

Murali Neelakantan, a lawyer specialising in healthcare, said “It is not difficult to fix a price for all hospitals.” After all, the government has already done this for civil servants under the Central Government Health Scheme. Various governments did prescribe ceilings on what private hospitals could charge, but these remained on paper.

These rules were weakly enforced, if at all. Therefore, many private hospitals just did not comply, and suffered were no penalties for this. Inayat Singh Kakar, a health activist at Jan Swasthya Abhiyan observed that “[private hospitals] are trying to subvert any kind of fallout of regulation, especially to make sure that it does not extend beyond the pandemic”. They did not want the “commercial healthcare business model to be affected.”

Overcharging by private hospitals was not restricted only to the treatment of Covid-19. Costs soared dizzyingly even for non-Covid treatment during the pandemic. On the one hand, many government hospitals were converted into “Covid hospitals”.

This abandoned many non-Covid patients to the mercy of private hospitals, whatever they might charge for essential and often lifesaving treatment such as chemotherapy, radiation, dialysis and abortion. Private hospitals cynically used the fact that these patients no longer had the option of accessing public hospitals to inflate their fees, saying they were compensating for the fall in footfall due to the pandemic and lockdowns.

For instance, a dialysis-dependent patient was compelled to pay more than 15 times the normal cost of dialysis treatment because the private hospital authorities insisted on executing the dialysis only in the ICU. The hospitals are typically charged for the irrational treatment, including high-end medicines, Personal Protective Equipment and Covid-19 tests.

Saima, the relative of a patient testified, “I am a doctor myself but for me too it was difficult to get my uncle admitted [to a hospital].”

“As soon as we got him admitted in the ICU, the hospital demanded a sum of Rs 5 lakh at the time of registration,” Saima said. “The family somehow managed to deposit the amount and soon after a week, we were asked to deposit an additional Rs 3 lakh. We received a total bill of Rs 16 lakh which we paid after taking loans.”

A family in Mumbai was slammed with a bill of Rs 9.6 lakh after the patient died. They were charged for consumables like PPE kits, gloves and shoes. When they insisted on a break-up, they were shocked to find that just PPEs were charged Rs 3 lakhs, India Today reported.

An analysis of bills from corporate hospitals in three metropolitan cities revealed two ways of profiteering on PPE. In one, patients were being charged inflated costs of PPE and in another, each PPE kit was billed to multiple patients.

Hospitals often would bill PPE as costs per day, and not indicate the number of PPE kits used or the cost of every PPE kit. Insurance companies would turn down many costs charged by hospitals – such as of extended unnecessary hospitalisation, PPEs, biomedical waste disposal charges, thermometers and sanitisers.

In fact, consumables like PPE kits, masks, face shields and gloves which used to account for around 10% of the hospital bills, were found to be increased to sometimes 50% of the total bills.

“In some instances, hospitals are insisting that non-Covid patients and their family members get tested every time they need to go to the hospital or even visit the patient,” Kakar said. “These charges add to the overall cost of treatment making it very difficult for people with chronic illness who need regular treatment like dialysis.”

Rampant black-marketing

I will describe here two other particularly egregious black markets, those in oxygen supplies and medicines. In the city of Indore, Rattanjeet Lal, a 45-year-old taxi driver, drove for more than 10 hours searching for an oxygen cylinder for his wife to save her life after her oxygen levels dropped sharply, DW reported.

He finally managed to get a 30-litre oxygen cylinder for nearly Rs 60,000, almost three times as much as it costs in normal times. The BBC called several oxygen cylinder suppliers during the second wave and found that most demanded at least 10 times the normal price.

It reported that the normal price for a 50-litre oxygen cylinder was Rs 6,000, but the black-market price soared to Rs 50,000 and beyond. Anshu Priya, unable to find a hospital bed anywhere in Delhi for her father-in-law frantically scouted for an oxygen cylinder and finally paid that price for it.

But now her mother-in-law also needed one, and she worried that she would not be able to find a cylinder for her. Anuj Tiwari likewise hired a nurse to look after his brother at home after he was refused admission in many hospitals. The nurse said his brother urgently needed oxygen, and he paid a huge amount to buy a concentrator.

Divyansh Pandey, a 25-year-old volunteer from Uttar Pradesh, also confirmed a ten-fold rise in the price of oxygen cylinders. “In the black market, an oxygen cylinder, which would normally cost about Rs 6,000 to Rs 10,000, depending on the size, now costs anywhere between Rs 60,000 to Rs 1,00,000,” he told VICE News. “It is already massively affecting India’s Covid-19 response, and is indirectly responsible for the deaths of patients who do not have ‘connections’ and money.”

As oxygen cylinders became more and more scarce and expensive, the demand for oxygen concentrators also shot up, along with their prices. “It is a simple matter of supply and demand: there is too much demand, and not enough supply, so we are forced to sell oxygen concentrators, which are not locally made, for ten times their price,” a Delhi-based black-market supplier told VICE on the condition of anonymity.

He did not explain what forced him to hike his prices many times except his greed. According to the supplier, cylinders are almost impossible to come across, while concentrators have to be shipped in from Singapore or Germany, which he believes justifies the hiked price.

Online fraud also became rampant: people claiming to be sellers would extract money from families with the promise of a cylinder or concentrator, and then would block their numbers or accounts. In early May, Delhi Police arrested businessman Navneet Kalra on charges of black-marketing oxygen concentrators.

Police alleged that Kalra worked with his friend Gagan Duggal, owner of Matrix Cellular Services, to sell the equipment. Police reported that the accused imported each concentrator at a cost of Rs 16,000 to Rs 22,000 each and sold this for Rs 70,000. Police said they had recovered 524 concentrators from three restaurants owned by Kalra – Town Hall and Khan Chacha in Khan Market and Nege Ju in Lodhi Colony – as well as from Matrix’s warehouse in Chhatarpur’s Mandi Village.

Hunt for Remdesivir

The story of the raging black market in drugs like Remdesivir is even more instructive. To begin with, it is not proven that Remdesivir is a scientific cure for Covid-19. The benefits of the drug – which was originally developed to treat the Ebola virus – were still being debated in the scientific community across the world.

A WHO trial even concluded that the drug had little to no effect on Covid-19 patients. Yet, it is one of the few drugs that was approved for the treatment of Covid-19 infections by the Indian government all through the second wave. It was accorded emergency-use approval in India and was being prescribed widely by doctors even right through the second wave.

It was only after the rampant black-marketing of the drug during the second wave that in late May, the Directorate General of Health Services issued guidelines advising the exercise of extreme caution when ordering Remdesivir – “as this is only an experimental drug and has a potential to harm”.

There is no explanation why the Indian government had until then despite this, still recommended its use in treating Covid-19 patients, and after it did, also why then did it not anticipate the full demand for it and make arrangements for adequate supplies. Had the government of India simply been guided much earlier by evidence-based medicine, the catastrophe of black-market extortion by desperate families for securing Remdesivir that we encounter in the following pages could have been largely avoided.

The BBC estimated that at the time of the second wave, 100 mg of the Remdesivir drug that normally sold for $12 to $53 was selling from $330 to $1,000. Other reporters found that a single vial was being sold for Rs 25,000- Rs 50,000 while the original price is between Rs 899-Rs 3,490. “We were supposed to get six vials in the morning for Rs 35,000 through a doctor contact. Turns out somebody was ready to pay Rs 50,000 for them and the vials went to them,” a woman told Business Insider. “Another doctor told us that he had procured six vials for Rs 80,000 for another patient.”

And these prices were just the lower end of the stick. Aakash (named changed) told Business Insider that he could procure a single vial for Rs 30,000. He found that vials were also available for Rs 15,000 to Rs 26,000 a piece, but not in Delhi. Anyone who wanted Remdesivir at those prices would have had to procure it from outside the city.

Naresh Indulkar, a resident of Thane, went on a harrowing quest for three vials of Remdesivir for a relative in critical condition in hospital, India Today reported. It took him six hours to find in the metropolis a pharmacy with a stock of the medicine. “Rs 22,000 a vial,” whispered the man behind the counter, although the retail price marked on the vial was only Rs 1,800. Indulkar could not afford this and returned dejected and empty-handed to his apartment. But a kind neighbour replied to an appeal he posted on his residential society’s WhatsApp group. He gave Indulkar three spare vials of Remdesivir.

“He had bought eight vials – at a premium – to treat his father,” recalled Indulkar to India Today. “Five sufficed, and as thanksgiving, he offered me the rest at the marked price, unmindful of his financial loss.”

Likewise, the price of the drug Tocilizumab for 400 mg rose from $540 in normal times to $2,000 to $4,000. Studies showed that it can reduce the chances of a very sick patient needing to go on a ventilator. But this too disappeared from the open market.

For what usually costs around Rs 32,480 for a vial of 400 mg, Kamal Kumar paid a “mind-boggling” price of Rs 2,50,000 to buy one dose for his father. Public health expert Anant Bhan said the black marketing of the drug could have been avoided had the government procured the drug in large quantities. But “there was no planning. The government failed to anticipate the wave and plan for it”, he told the BBC. “People (were) left to their own fate.”

Gujarat’s media tapped into this public anger and was relentless in demanding accountability from the state’s Bharatiya Janata Party government. The Gujarati newspaper Divya Bhasker published on its front page the state BJP unit chief CR Paatil’s phone number, encouraging readers to call him and ask him how he managed to procure 5,000 doses of the Remdevisir in Surat at a time when there was a state-wide shortage of the drug.

The state government claimed in the Gujarat High Court that such media reports were biased, exaggerated and sometimes fake. The High Court, however, rejected the government’s defence. “Every day there are eight to ten reports. This is not good,” the court said. “These newspapers with their reputation would not be reporting baseless reports.”

What created this shortage? The short supply of the drug Remdesvir resulted from the fact that the government had allowed seven firms to manufacture Remdesvir in India. These are – Cipla, Hetero Drugs, Zydus Cadila, Mylan Labs, Dr Reddy’s Labs, Syngene and Jubilant Ingrevia. As the first wave ended, the production of the drug also fell behind, and the government did nothing to compel them, advise them, or even just permit them to ramp up supplies in anticipation of a fresh rise in infections.

It was only in March 2021 that the government allowed manufacturers to significantly increase production and set up 25 new manufacturing sites. But with the second wave surging, stocks were rapidly exhausted. They were told to ramp up production much too late, only after demand surged. Epidemiologist Dr Lalit Kant lamented to the BBC, “We learnt nothing from the first wave.”

To deal with the shortage, on directions of the Supreme Court, manufacturers stopped supply to chemists and hospitals. Instead, the central government supplied the drug to the states and states in turn to hospitals (and not to chemists). But hospitals fell short of the demand, partly because of the high patient load, partly because some doctors prescribed the medicine even for patients who were not critical, and partly because of bureaucratic delays and bottlenecks in sanctioning supplies to hospitals.

Some reports have also suggested that several doctors in private hospitals, especially in rural areas, chose to prescribe the drug over more available and affordable options in order to accrue profits from the black-market supply chain. So hospitals asked families to procure the drug. The medicine was unavailable to chemists. Families were left with no option but to shop in the black market.

Leakage in system

The question then arises that despite the tight supply chains and a shortage within hospitals themselves, how did the drug enter the black market? Epidemiologist Lalit Kant observed, “Somehow the drug is available in the black market, so there is some leakage in the supply system which the regulators have not been able to plug.”

Investigations revealed that the drug was pulled out of the legal supply chain at many points – from the distribution level, to state supply centres, to right out of hospital patients’ prescribed dosages. For instance, a doctor in Chennai were arrested for selling Remdesivir sourced from a dealer with connections at a manufacturing unit, in the black market. Colluding with a pharmacy staff and using fake medical prescriptions to get the vials, he would then sell them for Rs 22,000 a vial.

A contractual nurse from a prominent hospital in south Delhi was arrested. “She had stolen the Remdesivir injection vial from the hospital, forged the records to show that she had given it to patients and later passed it on to her contacts to sell it,” a senior police officer told The Hindustan Times. “She does not have a record but was lured by greed. She and her gang were selling the medicine for Rs 70,000 each.” He added that they found enough buyers even at that price. The police in New Delhi said they had arrested four people working at medical facilities who swiped unused vials of Remdesivir from dead patients and sold them.

Fake Remdesivir also surfaced in the black market. As a drug enters the black market, consumers have no guarantee of delivery, quality or price. Reports of counterfeit versions of the drug came in from across the country. But there is no authoritative data about the scale and impact of fake drugs on patients’ lives, and also their finances.

The New York Times reported an instance in which a desperate relative found through social media a seller of four vials of the drug for about five times the price. The supplies came in two batches, but the packaging was different in each batch.

The doctors injected the doses although they could not determine whether the drugs were fake. The patient died. The BBC reported a purchase in which the package was also full of spelling errors. The manufacturing firm also had no presence on the internet. Police found 60 vials of fake Remdesivir in Uttar Pradesh seven people were arrested for running a fake Remdesivir production plant in Uttarakhand.

The police in Gujarat this month discovered thousands of vials of fake Remdesivir during a raid on a factory after a tip-off. They recovered 3,371 vials that were filled with glucose, water and salt.

There were also many cases of online fraud, where people posing as sellers extorted money from families with false promises of delivering the medicine. The Bangalore city police cracked one such racket.

“A chemist lodged a complaint that she paid Rs 30,000 to an account based on a message on WhatsApp, but did not get Remdesivir as promised,” said a senior official probing the case told The Hindu. “We uncovered a string of mule accounts and arrested an Indian and a Nigerian. Preliminary investigations revealed at least 14 transactions where people were duped to the tune of Rs 4.2 lakh.”

An IT professional told the BBC that he desperately needed to buy an oxygen cylinder and Remdesivir, and he found a lead on Twitter. He called on the number that was given, and the person on the line told him to deposit an advance of Rs 10,000. “The moment I sent the money, the person blocked my number,” he said.

It is evident that there seem to have been far too many people across the length and breadth of the unfortunate country whose amorality seemed to echo that of Poonawalla, all buoyed by the same conviction that it was fitting to extort runaway profits from the ocean of suffering and desperate need created by the pandemic and exclusionary state policies.

Read the other parts of the “Tsunami of suffering” series here.

Harsh Mander is a Richard von Weizsacker Fellow, Chairperson of the Centre for Equity Studies and convenes the Karwan e Mohabbat, a people’s campaign to fight hate crime with solidarity and atonement.