Pharmaceutical pricing regulator National Pharmaceutical Pricing Authority (NPPA) has fixed the trade margin for oxygen concentrators at 70 per cent. In its order, the NPPA has stated that the trade margin rationalisation approach has been taken keeping in mind the need for oxygen due to the pandemic, invoking Para 19 of the Drug Price Control Order (DPCO) 2013.
This allows the NPPA to fix prices of drugs and devices in public interest. Further, the NPPA has decided to monitor oxygen concentrators manufactured, imported, sold or exported.
This cap will be in force till the end of November this year.
The authority has noted in its order, “With the increase in demand for medical oxygen, there is a surge in demand for oxygen concentrators in the country. Due to global demand-supply mismatch and related issues, the prices of oxygen concentrators have recently shown substantial volatility in the domestic market.”
Public interest litigations (PILs) have been filed in various courts and the Delhi High Court had passed an order in May directing the government to consider listening to petitioners who wanted an absolute price cap. Petitioners had stated that price cap should either be in absolute terms, or if a formula is proposed, a ceiling price or retail price could be worked out.
Para 19 is used in extraordinary circumstances to control prices in the public interest. The last time the NPPA used this provision, orthopaedic knee implants were brought under a price cap.