The Chinese national identified as Li Chiang Ping was arrested along with an Indonesian citizen from Madura Island, East Java, at Karaz Hotel, Chief of the Bukit Bestari Police Precinct Commissioner Mama said Wednesday.
"The two were arrested based on a report from a resident of Dompak Island," he said.
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They are believed to have offered medicines without a permit to residents.
"One resident has been cheated through the medicines they offered," he said.
The police have also seized six different types of medicines in the form of capsules and pills as evidence, he added.
The two are now being held in custody at the Bukit Bestari Police Precinct for further questioning.
"They are charged with violating Article 197 of the health law. If found guilty, they can be sentenced to up to 15 years in jail," he said.