Pandemic and the Crumbling System - Profiteering in Oximeter and need for immediate Regulation

Pandemic and the Crumbling System - Profiteering in Oximeter and need for immediate Regulation

The game of MRP and Profeteeing is wreaking havoc on an overwhelmed population. Blackmarketing and exorbitant charges on medicines, medical equipment and hand held home use devices in times of the pandemic is leading traders to hoard while passing on the entire burden to the end user.
Pandemic and the Crumbling System - Profiteering in Oximeter and need for immediate Regulation

by: Tilkesh Bhadala

There has been exorbitant increase in the sales of pulse oximeter for its early diagnosis of drop in oxygen level. In on-going second wave almost 54.5% of admissions (2) required supplemental oxygen during treatment. As many Doctors have advised the patients to monitor there oxygen level at home. Several incidents have been reported where patients have seen sudden dip in their oxygen levels requiring immediate oxygen supplementation and hospitalisation. This led to sudden surge in demand of oximeter as it is a critical early warning medical equipment.

The coronavirus pandemic has wreaked havoc at an unimaginable scale leading to overburdening of an already overburdened healthcare system in India. SOS are being sent by many hospitals citing that they are left with only few hours of oxygen supply across the states. There are many incidents of death of COVID patients due to either no or low flow of oxygen.

There is overburdening of cases as more number of patient are returning positive. The positivity rate even in smaller cities like Udaipur ahve gone up to as high as 35%. There is a cause for concern and alarm bells are ringing high in ivory tower. The shortage of supply of medical equipment and therapeutics along with hospitals beds running out makes the situation more severe. There are reports pouring in from several parts of country where black marketing and hoarding of essential lifesaving drugs such as remdesivir, fabiflu, oxygen and oxygen concentrator prices have skyrocketed adding to the trouble.

Medical Equipment brought under the definition of Drugs

Recently in February 2020 medical equipment were brought under the definition of drugs under Cosmetics and Drugs Act, 1940 through Medical Devices Amendment Rules, 2020 broadening its scope of regulation.

The definition of medical equipment in Indian laws is almost same as provided by WHO except that it also includes animals. It includes all instrument, apparatus, implement, machine, appliance, implant, reagent for in vitro use, software, material or other similar or related article, intended by the manufacturer to be used, alone or in combination, for human beings, for one or more of the specific medical purpose(s) of:

  • diagnosis, prevention, monitoring, treatment or alleviation of disease,
  • diagnosis, monitoring, treatment, alleviation of or compensation for an injury,
  • investigation, replacement, modification, or support of the anatomy or of a physiological process,
  • supporting or sustaining life,
  • control of conception,
  • disinfection of medical devices
  • providing information by means of in-vitro examination of specimens derived from the human body.
Pandemic situation demands that the pricing regime move from MRP to price regulation on essential products. The MRP regime in India is non-transparent and is in dire need of reforms. In India MRP has symbolic value as it does not reflect the actual market price. This has become more evident with the current COVID crisis where MRP is being used as shield for profiteering in medical equipment like oximeter.

The Game of MRP and Profiteering

In notification published in PIB in July 2020 the Ministry of Chemical and Fertilizers had issued directions to National Pharmaceutical Price Authority (NPPA) to specifically control prices for oxygen concentrators and pulse oximeter. NPPA had issued it to the manufacturers and had asked from them to share the details of their MRP (Maximum Retail Price). The MRP regime in India is non-transparent and is in dire need of reforms. In India MRP has symbolic value as it does not reflect the actual market price. This has become more evident with the current COVID crisis where MRP is being used as shield for profiteering in medical equipment like Oximeter. The Oximeter, which was earlier available in market before second wave at Rs. 900 is being sold at Rs. 2000-3000. The catch here is that the MRP marked on the box is Rs.3500-4000. There is no set method in India to derive at the MRP. Ideally, it should be the cost of production plus profit but manufacturers are using MRP to escape the regulatory net of authorities like NPPA. The over reliance of our laws to regulate prices of packaged products and goods (non-scheduled) based on only MRP is a grave error. It makes the whole regulation process toothless and ineffective.

Last year the NPPA in June 2020 issued a memorandum saying that the MRP cannot be increased by more than 10% in a year. As oximeter comes under non-scheduled list its MRP is not calculated by the method provided in Drugs Price Control Order, 2013 (DPCO) leaving the scope of MRP manipulation at the will of manufacturers. In DPCO, 2013 the retail margin is capped at 16%. As the whole regulation of non-scheduled list is based on MRP, it is shocking that there is no check how this MRP is fixed by manufacturers. This means manufacturer can set MRP 200-300% high over and above the production cost and can keep earning super profits while escaping the regulatory radar of NPPA.

What is the price of Oximeter in wholesale market?

There are many wholesellers who are selling Oximeter in bulk at Rs.615-750 including 12 % GST. The delivery timeline ranges between 5-10 days. The product comes with 1 year manufacturer warranty.

Immediate Action Required

There is a need for bringing the oximeter under scheduled list of Drugs Price Control Order, 2013 (DPCO) read with Essential Commodities Act to bring down the price and curb excessive profiteering. The DPCO also provides for a method to determine ceiling price with a reasonable retail margin of 16%. It is an urgent call for the government to do the necessary and help people with whatever it can. NPPA should rise up to the task to give people a sigh of relief and ray of hope by doing what it is mandated to do.

The government must take speedy measures as it had taken for sanitizers and masks (N95 and surgical) during the onset of pandemic which significantly brought down their MRP.

The government needs to act fast as the number of cases is expected to rise in next few days and daily case load of India will touch new global high as flagged by many experts. In this fight, as more new demands will pour in for Oximeter hence its affordability and availability will be very crucial. It is imperative for people to monitor their oxygen levels and be aware of any looming dangers, if any, ensuring their overall wellbeing. In current situation when hospitals are flooded with patients the early diagnosis can provide much needed respite and save lives.

Dwindling Incomes and rising medical cost: Challenges

The second wave of pandemic has hit hard the already ailing economy and brunt is borne by lower income group and poor the most.

As per US based Pew Research data 75 million Indians have slipped into abject poverty, which is 60% of the global increase with most of them belonging to lower income group pre-COVID.

Recently CMIE data has revealed that India’s urban unemployment rate has jumped to 10.7% (12). With rising unemployment and falling income levels it is more important now than ever. This help can come in many forms by:

  • Keeping a vigilant check on profiteering while simultaneously focusing on saving lives.Ensuring the availability and affordability of life saving drugs across the country.
  • Ramping up the medical infrastructure at war footing so that everyone can get the access to treatment.
  • Setting up of more number of beds with oxygen by way of conversion and acquisition of public and private buildings.
  • There is a need to create private at the same time government facilities to ensure that people are not charged exorbitantly due to constrained medical infrastructure.
  • There is a need for compensation transfer in form of assistance to the people who are getting their treatment in private hospitals due to non-availability of beds in government hospitals.
  • To protect the marginalised and vulnerable groups – free food distribution and income assistance by way of cash transfer is need of the hour.

The socio- economically vulnerable section of society is at the receiving end. The onus is with the government and its agencies like NPPA to protect such groups from the exploitation of profiteering.

To join us on Facebook Click Here and Subscribe to UdaipurTimes Broadcast channels on   GoogleNews |  Telegram |  Signal