Trading On margin

Government caps O2 concentrators’ profit margin at 70%


India’s National Pharmaceutical Pricing Authority (NPPA) on Friday capped the trade margin on oxygen concentrators at 70%. The margin currently stands at 198%, according to a statement from the Ministry of Chemicals and Fertilizers.

He said the government stepped in to regulate the price because “extraordinary circumstances due to the Covid pandemic” had resulted in maximum retail price volatility for oxygen concentrators. The price regulator also asked manufacturers and importers of the instrument to report revised MRPs within three days. He will put the revised MRPs in the public domain within a week.

Each retailer, reseller, hospital and institution has been invited to display the price list provided by the manufacturer, on a prominent part of the business premises so as to be easily accessible to anyone wishing to consult it, the press release mentioned.

Manufacturers and importers who fail to comply with the revised MRPs will be required to deposit the overcharged amount along with 15% interest and a penalty of up to 100% under the provisions of the Medicines Ordinance ( price control), 2013, read together with the Basic Products Act of 1955..

State drug controllers have been tasked with monitoring compliance with the order. The decree will be in effect until November 30, 2021. “The government is working to ensure an uninterrupted supply of oxygen and sufficient oxygen concentrators in the country during the pandemic. The oxygen concentrator is an unlisted drug and currently subject to the voluntary authorization framework of the Central Drugs Standard Control Organization, ”the ministry said.

The All India Drugs Action Network, a non-governmental organization, called the decision “flawed”.

“There are major flaws in the way the cap on trade margins has been implemented, which is against the public interest,” he said.



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