China cracks down on drug price gouging amid fears of COVID spike

China Covid-19 Crisis

Chinese authorities said they were cracking down on price gouging of medical supplies and drugs, and seeking to ensure they flow smoothly as fears grow of a massive COVID-19 outbreak after the nationwide dismantling of strict restrictions.

China announced 10 measures on Wednesday that loosened key parts of President Xi Jinping’s signature zero-COVID policy, in a dramatic pivot toward economic reopening. But concerns are increasing of a spike in infections as people scramble for cough medicines, flu drugs and masks.

A working group under the State Council, China’s cabinet, issued a notice late on Friday, urging local governments to ensure smooth transport and logistics to maintain normal living and working order.

”No efforts should be spared to ensure smooth delivery of medical supplies including vaccinations, antigen testing reagents, drugs and masks,” said the notice, published by China’s ministry of transport.

The notice banned unauthorised blockage or closure of highways, waterways, ports, railroad stations and airports, to comply with China’s easing of restrictions.

China’s State Administration for Market Regulation admonished against price gouging in anti-COVID products, citing the need to better protect human lives and health.

In a warning letter posted on Friday, the watchdog banned activities including price inflation, collusion, price discrimination, misleading propaganda and hoarding.

Merchants must not "drastically raise prices when there’s no evident increase in cost, or the cost rise far lags the price rise,” the regulator cautioned.

In addition, they must not hoard anti-pandemic supplies that are in short supply, or spread word of price hikes to disrupt market order, the watchdog said.