Breather for patients: Pharma regulator caps trade margin on oxygen concentrators

Limits margin at 70% in bid to curb hoarding and over-pricing of the critical equipment following numerous complaints in recent weeks, particularly in Delhi

At the peak of the COVID second wave, oxygen concentrators were being sold in the black market at five times their import prices.

To prevent hoarding and black marketing of oxygen concentrators, the Centre has decided to cap the trade margin on this key equipment that is used for the treatment of critically-ill COVID patients. This follows numerous complaints from various parts of the country about the exorbitant retail prices at which oxygen concentrators were sold during the peak of the second COVID wave.

The maximum trade margin on oxygen concentrators has been fixed at 70%, according to an order issued by the National Pharmaceutical Pricing Authority (NPPA). The margin at the level of distributor currently ranges up to 198%, as per information collected by the government.

Khan Market incident

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The move comes after a large number of oxygen concentrators were seized from a well-known restaurant at Khan Market in New Delhi and a number of other locations when the capital city was in the grip of the second COVID wave, facing acute shortage of medicines and treatment equipment.

The restaurant, closed due to the lockdown, was being used as a hideout to store oxygen concentrators that were then sold at exorbitant prices, according to Delhi Police, who arrested the owner of the restaurant. While investigations are going on, the police allege that oxygen concentrators were being sold in the black market at five times their import prices, exploiting the panic created due to the shortage, as a large number of critical patients needed the live-saving device at that point. Similar complaints had come in from various other cities, too, forcing the Centre to act.

“By invoking extraordinary powers under Para 19 of the DPCO, 2013, in the larger public interest, NPPA has capped the trade margin at up to 70% on the price-to-distributor (PTD) level on oxygen concentrators,” a statement issued on Friday by the Ministry of Chemicals and Fertilizers said. In a similar move in February 2019, the NPPA had capped the trade margin on anti-cancer drugs.

Revised MRP in 3 days

Based on the notified trade margin, the NPPA has instructed the manufacturers and importers to report the revised maximum retail price (MRP) within three days. Then, revised MRPs will be shared in the public domain within a week by the NPPA, the statement said.

Also read: Centre may turn ‘Purchase Head’, procure COVID vaccines for all states

With the peak of the second of COVID behind us, the move may not be of much import now, said experts, adding that the NPPA should have acted much earlier. Nevertheless, the current order will help in case a crisis arises in the future.

“Every retailer, dealer, hospital and institution shall display a price list as furnished by the manufacturer, on a conspicuous part of the business premises in a manner so as to be easily accessible by any person wishing to consult the same. The manufacturers/importers not complying with the revised MRP after trade margin capping shall be liable to deposit the overcharged amount along with interest at 15% and penalty up to 100% under the provisions of the Drugs (Prices Control) Order, 2013, read with the Essential Commodities Act, 1955,” the statement said.

Compliance monitoring

State Drug Controllers (SDCs) shall monitor the compliance of the order to ensure that no manufacturer, distributor, retailer sells oxygen concentrators to any consumer at a price exceeding the revised MRP, to prevent black-marketing.

The order shall be applicable up to November 30, 2021, subject to review, according to the statement issued by the Ministry of Chemicals and Fertilizers.

“The government is striving to ensure uninterrupted supply of oxygen and oxygen concentrators in adequate quantity in the country during the pandemic. Oxygen concentrators are a non-scheduled drug and presently under the voluntary licensing framework of the Central Drugs Standard Control Organization (CDSCO). Its price is being monitored under the provisions of DPCO 2013,” the statement explained.

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