ICMR removes Covid-19 price cap, asks states to negotiate with private labs to lower price

Image Courtesy:thestatesman.com

Backtracking on the price cap set for Covid-19 tests set at Rs. 4,500 in private laboratories, the Indian Council of Medical Research (ICMR) has said asked state governments to negotiate with private laboratories and convince them to offer tests at lower prices.

Citing that testing supplies have been stabilizing and there are varied options of testing materials / kits, including indigenous kits, the prices are becoming competitive and are undergoing reduction. “In this backdrop and keeping in view the evolving prices of testing commodities, the earlier suggested upper ceiling of Rs 4,500 dated March 17, may not be applicable now and therefore all state governments / UT administrations are advised to negotiate with private labs and fix up mutually agreeable prices for samples being sent by the government and also for private individuals desirous of testing by these labs,” read the statement by ICMR.

The statement by Prof. Dr. Balram Bhargava, Director General, ICMR, also stated that at the start of the pandemic there was a global crisis of testing kits and reagents as India was heavily reliant on imported products for molecular detection of viruses. He further said, “In this intervening period all efforts have been made to facilitate local companies by handholding and promoting them to locally manufacture swabs, viral transport media and RNA extraction kits. Further, indigenous diagnostic kits are being approved on a fast track basis for RT-PCR testing.”

In response to this, Malini AIsola, Co-Convenor, All India Drug Action Network (AIDAN) said that even though the ICMR admitted that the price cap was too high, it refused to name a lower price cap and left it to state governments, leaving individuals in the lurch.

A letter by the AIDAN in response to the statement by ICMR read, “State governments and administrations like Karnataka (2,250), Delhi (4,500 – 2,200), MCGM Mumbai (3,500 – 2,500) have negotiated reimbursement rates for testing of government samples that are lower than Rs. 4,500. However, these rates were not extended to individuals which has resulted in families shelling out large amounts of money for testing of their family members.”

AIDAN also said that the ICMR has given no rationale till date of setting such a high testing price. At the time of testing the price cap, the ICMR had claimed to fix it on the basis of the cost of testing in government labs and repeated this in an affidavit to the Supreme Court and the explanation was not believable as the cost of testing in government labs was estimated to be substantially lower than Rs. 4,500.

The group also alleged that private labs were not conforming to testing protocols and were openly flouting the price cap by imposing arbitrary charges. It also alleged that while ICMR had previously shared that it was procuring RT-PCR test kits at prices ranging from Rs 740-1,150, no details were made available. “Centre should make public the prices, quantities and specifications for all Covid-19 test kits procured. In the current scenario, buyers are at a disadvantage and unable to discover the prices of various test kits on their own, which undermines competition,” said the statement.

Earlier this month, Kiran Mazumdar Shaw had echoed the same sentiment while speaking with Bloomberg Quint saying that the government had given no official explanation on how the government arrived at the Rs. 4,500 cap.

Kit-makers reveal actual cost of a Covid-19 test

The publication’s conversation with suppliers approved for providing PCR kits for testing in India by the Central Drugs Standard Organization had proved that a single RT-PCR test for Covid-19 cost about Rs. 1,500.

Indigenous kit maker, Pune-based MyLab’s director Hasmukh Rawal mentioned that his firm charges around Rs 1.2 lakh for a kit of 100 tests or Rs 1,200 per test for RT-PCR. Extraction costs Rs 150-350 extra per test which brings it to a total of Rs 1,550 per test. Other suppliers too mentioned that the cost of one patient shouldn’t go beyond Rs. 2,000.

Labs justify costs

Many private labs across the country have been accused of charging high prices, some even above the Rs. 4,500 cap set by the government. However, they justify their actions citing overhead costs like equipment depreciation, PPE requirements, salaries, audits and manpower among other costs.

As per experts, the end to this menace is indigenous testing kits and increasing the volume of testing. Another way to bring down costs said former union health secretary to Scroll.in was that the government start playing a more proactive role by procuring kits centrally and distributing them thus bringing down the overall costs and making it easier for the government to reimburse private labs.

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COVID-19 and the Indian Supreme Court