Black Market, COVID-19 Shortages, and Overlooked Heroes

CAIRO, Egypt — Since the breakout of the novel coronavirus (COVID-19) in late December of last year, the black market industry in Egypt has taken advantage of the increased demand for pharmaceutical and medical equipment used against the virus. 

As of May 22, there are over five million confirmed cases, mostly concentrated in the United States and Europe. Egypt has 15 thousand confirmed cases, one of the highest numbers in the Middle East.

The use of surgical products or sanitary products like face masks, latex gloves, disinfecting alcohol, and hand sanitizer particularly are in high demand.

“If we were to put them in order from the most demanded to the least demanded, surgical face masks and latex gloves would be on top, followed by alcohol spray and hand sanitizers,” said Abdel-Mageid Mamdouh, a black market expert, pharmacist, and manager at Elite pharmacies.

Immunity boosters, such as Vitamin C are also on very high demand as people turn to immunity-boosting vitamins to fight off possible infection.

“People take them [immunity boosters] as a precaution to increase their immunity to prevent catching a flu. The shortage in these types of medications normally happens in flu seasons, but with the advancement of COVID-19 this year, the demand was really high. It was like nothing before,” said Mahmoud Helmy, pharmacist and branch manager at Delmar & Attallah pharmacies.

According to Ali Ouf, the head of the pharmaceuticals division of Egypt’s Federation of Chambers of Commerce, prior to the emergence of the coronavirus, Egypt used to import 120 million masks annually from China to meet local consumption needs, estimated to be 180 million masks. 

China alone used to produce around half of all masks made globally; with 20 million masks each day and more than seven billion a year. However, its production has been cut to around 10 million per day due to its New Year holiday as well as the impact of the virus itself.

Shortages

Egypt recorded its first confirmed case of COVID-19 on February 14. As a result, the demand for medical equipment skyrocketed among Egyptian citizens. 

Black market activity, however, started long before then.

“Egyptians do not usually buy face masks and gloves, that is why people exported them to China instead of what was usually the case which is importing goods and supplies from China,” said Helmy. 

Despite Egypt’s insufficient production of masks, a supplier of medical materials said that many Egyptian merchants bought most of the masks on the local market in February to export them to China, which was the main exporter of masks worldwide. Traders would buy these products in bulk in Egyptian pounds and export them in US dollars thus, making huge profits in the process. 

“Many traders bought face masks from the Egyptian black market and shipped them to China to sell. It was easier to ship the imported face masks instead of the Egyptian ones in terms of the documents required as well as the process,” said Mamdouh.

When the demand for these supplies kept rising and as the pandemic hit Egypt, traders, large industrial companies, and entrepreneurs started producing the supplies to meet the rising demands for both the black market and for the average citizen. Before that, they would just buy in bulk and hoard from manufacturers.

Panic buying was a prominent phenomenon as people feared a complete lockdown, and therefore limited access to vendors. This led to a lot of Egyptian citizens bulk buying protective medical equipment. 

“Most people demanded medical equipment at the same time and started buying them suddenly; thus, the demand was much higher than the accessibility of the products especially since there were shortages already as most of the products were being exported to China,” added Helmy. 

The black market, factories, and manufacturers set a priority for hospitals and exporting these products abroad. Therefore, pharmacies trying to buy and restock are having a much more difficult time meeting the demands of customers and consumers.

“In the span of around 18 hours, we would have sold our stock of 500 masks, and we only allow one box per customer,” said Shady Samer, a pharmacy undergraduate at Cairo University and trainee at Mamdouh pharmacies.

Price Hikes

Shortages are not the only issue. Coupled with black market activity, there has been a steady rise in prices. A lack of control over the market has also resulted in price discrepancies between different pharmacies. 

“Usually, famous pharmacy chains have cheaper prices since they have higher control over trade value, while ordinary pharmacies have higher prices,” said Ahmed Morsy, a journalist at Ahram Weekly and Ahram online.

Many business and factory owners who operate in the medical equipment industry started hoarding their products of face masks, latex gloves, and disinfectants in an effort to limit the supply to the market, and in turn, drive the prices up.

“I feel that this high increase in prices and the shortage of these products affect the consumers and customers more than it affects pharmacies, they are the most affected when they don’t find them,” said Mamdouh. 

Naturally, this breeds frustration in the interactions between the customer and the pharmacist. 

“Citizens started blaming pharmacies and claimed that they were the ones who overpriced their products. We only had to increase the price because the manufacturers and distributors initially increased the price at which they sell us these products,” said Mohamed El Sheikh, head of Cairo’s Pharmacists’ Syndicate.

This has placed pharmacists as the villains in this issue. 

“We have been working so hard over the past few months and we have been under enormous pressure as well. Not being appreciated feels greatly inequitable,” El Sheikh continued.

The government has put out laws capping prices over manufacturers. Failure to abide by these prices would result in at least a year of jail time and a fine of no less than 100,000 EGP and no more than two million EGP.

“The government set laws and procedures to try and protect its citizens, however, it is so hard to keep up and detect whether or not every distributor, retailer, and pharmacy is following these rules and abiding by them. It is almost impossible,” said Helmy.

According to El-Sheikh, even government-based producers have not abided by these laws so far and are selling products over five times their original price. 

For example, isopropyl alcohol bottles are being sold for 250 EGP, whereas the original price was 35 EGP. Isopropyl alcohol is a key ingredient to antiseptic products like rubbing alcohol. Meanwhile, a box of masks that would cost 100 EGP is now being sold by manufacturers at 353 EGP.

“Pharmacists are left with no choice but to reach out to the black market as it sells these essential products with much lower prices than the other manufacturers and distributors,” added El-Sheikh. 

However, the unregulated nature of the black market has made it difficult for pharmacists to gauge the quality and or negotiate on the quantity of the materials in question, especially when it comes to sterilizing equipment like isopropyl alcohol.

“Most of the alcohol found in the market is forged or altered. Many factories add to, and mix the alcohol with harmful substances that could cause impairments and injuries,” said El Sheikh. 

This is corroborated by Mamdouh, who says that most alcohol spray bottles found in pharmacies or the black market are tampered with in some way. Yet, he insists that good quality products are available if you know where to look. 

“There are fake products everywhere. People are using this pandemic as a way to start a business or make some profit. Some people sell fake masks, alcohol sprays, and even medicines on social media […]. You can never really fully trust that the products you have are authentic,” he said.

“I feel that the most trusted place that one could buy alcohol sprays from is the army retails,” Mamdouh added. 

To curb black market activity, the armed forces spearheaded efforts to boost the domestic production of protective gear amid the outbreak. The head of the Egyptian Armed Forces Logistics Authority, who was speaking at a conference by the Army and attended by El-Sisi on April 7, said that the military’s manufacturing lines “are currently producing 100,000 masks a day with reserves of five million.”

Military outlets sell these products at a low or subsidized price to ensure that every citizen is able to buy the products and protect themselves. This gives them a competitive edge in the market that would force producers to lower their prices. 

The military’s involvement may have helped mitigate this issue but it is arguable that it wasn’t completely eradicated as Hazem Anwar, a dentist that works at a clinic in Heliopolis, reported on May 14 that the box of 50 face masks that he used to buy for 50 pounds, is now worth 400 pounds which is a 700 percent increase. Evidently, there is still an exponential price rise in such equipment.

Mamdouh also suggested cologne as an effective alternative, expounding that before the rapid spread of COVID-19 in Egypt, he had bought five or six bottles of lavender cologne, similar to the famous “555” cologne, both of which are sold in pharmacies. 

On the other hand, some companies looked at this situation as a gap in the market and started to produce non-medical cotton masks. 

“I work in a fabric company that started producing cotton masks in Europe and the US and they are actually pretty good. They protect people against the virus because the ones we produce are double-layered and therefore are very protective,” said Martina Ashraf, an employee at Rabbit for Modern Industries. 

These masks are worth 20 to 30 EGP pounds, depending on the quantity purchased. These prices are generally higher than that of a regular medically-approved used mask, but she claims that their cotton masks are washable, and therefore reusable.

Chairman of the Board of Directors of Misr Spinning and Weaving Company in Mahalla El-Kubra, Ashraf Ezzat, said in a statement that the trial run of the first production line for manufacturing masks had begun on April 6, and the machines succeeded in manufacturing 40 masks per minute at a rate of 2400 masks per hour.

Earlier in April, Chinese Ambassador to Cairo Liao Liqiang inaugurated a new factory: a joint Egyptian-Chinese investment for manufacturing medical facemasks in the free industrial zone in Cairo’s Nasr City district, according to Morsy. 

Liqiang said during the embassy’s seventh online press conference that the factory, the first foreign investment for China since the COVID-19 outbreak, currently has only one production line but when fully operational, it is expected to produce half a million masks daily.

“The plant will be expanded after the number of production lines is increased to five and that the output of each will be 100,000 masks daily,” said Liqiang.

Pharmacists on the Frontlines

Shortages are still rampant and they continue to disadvantage Egyptian citizens while pharmacists are also at an underrecognized risk. Pharmacists are among on the front lines and somehow got involved in a battle on two fronts: one against the virus, and the other against black market dealings. 

“Due to the fact that most, if not all, of the clinics and hospitals, are closed, and because of the lockdown and the curfew, many people are depending on pharmacies now more than ever as they reach out for the doctors and the workers there,” said El Sheikh.

Subsequently, pharmacists and those who work at pharmacies are being exposed to all sorts of people who are usually unwell and seeking medical advice. 

“Unfortunately, many of those who work at pharmacies fell ill with the virus, where some cases were extremely severe that they could not just self-isolate and had to be admitted to hospitals.  Others could not make it and sadly passed away,” said El Sheikh. 

According to Samer, most small pharmacies buy their equipment from Al-Kataai (القطاعي), a shop in Alexandria that sells medical equipment. This is extremely dangerous as it is a very crowded space that people from all over Egypt convene in order to restock their supplies. 

It also falls on pharmacist’s shoulders to calm citizens down as they are somewhat more accessible than medical doctors to reach or approach for basic medical advice on precautions. 

This paints a grim picture of the new reality that pharmacists have had to adapt to. Not only do they need to stay open as a primary, potentially life-saving, service to the general population amid shortages and risk infection, but the government also expects them to pay their full taxes and utilities in the face of a deteriorating economy and limited working hours.

There are also various bureaucratic processes that pharmacies have to go through to obtain permits that would allow them to sell these products, which are very time and labor-intensive, further compounding the stress on pharmacists and pharmacies.

El Sheikh is hoping that the government overlooks some of these payments for the past and the coming few months in order to alleviate some of these pressures and allow pharmacies to operate in a more cost-efficient sense.  This would ultimately reflect on commodity prices. 

“We tried contacting several government officials but no one has answered us and we are uncertain that they would agree to do so,” he said. 

The Cairo Pharmacists’ syndicate contacted some factories to provide a mask brand called ‘Safe Shield’ at a subsidized price to many pharmacies, doctors, and nurses in hospitals. 

After the initial surge in demand as the panic somewhat subsided, and as manufacturers rose to the occasion, products are now a lot more available. 

“I think that if you go to any pharmacy you will find most of the products you want available and for fair prices so that every single citizen is able to buy and find these supplies. This especially now because the army started selling these products, so they are frequently more available,” Helmy concluded.