O2 device trade margin slashed, price to plunge

Those in the market for oxygen concentrators can breathe a huge sigh of relief. The Centre has capped the trade margin on this critical, life-saving equipment up to 70 per cent, down from the current stratospheric level of up to 198 per cent, in a bid to regulate prices.

The end purchaser can now procure a unit, depending on its capacity, for anywhere from Rs 40,000 to 55,000, inclusive of all taxes and transport charges, as against Rs 65,000 to Rs 87,000.

The Centre swung into action when it took note of the sky-high trade margin at the distributor level, currently up to 198 per cent. ‘’By invoking extraordinar y powers under Para 19 of the Drugs (Prices Control) Order, 2013, in larger public interest, National Pharmaceutical Pricing Authority (NPPA) has capped the trade margin up to 70% on Price to Distributor (PTD) level on oxygen concentrators. Earlier, in Februar y 2019 NPPA had successfully capped the trade margin on Anti-cancer Drugs. Based on the notified Trade Margin, NPPA has instructed the manufacturers / importers to report revised MRP within three days. Revised MRPs will be informed in public domain within a week by NPPA,” said the Union ministr y of chemicals and fertilisers in a statement.

Union Minister of Chemicals and Fertilisers Sadananda Gowda tweeted, “The trade margin has been capped in consumer interest to ensure its continued availability at affordable price during the pandemic. The price regulation will safeguard profitability and prohibit profiteering at the cost of consumers during the pandemic.” The order will be applicable until November 30, 2021, subject to review, the release said. A leading distributor in the city told The Free Press Journal, “Till the outbreak of Covid-19, oxygen concentrators were sold at Rs 40,00042,000 per piece. However, during October and December last year, it was being sold at Rs 5254,000 per piece. As the demand surged, the prices also shot up. For a five-litre unit, the end user was paying Rs 65,000, which could be priced differently in different cities due to inclusion of additional charges. For a 10-litre unit, the end user is shelling out Rs 87,000 per piece. But with the trade margin capped at 70 per cent, the price will now range between Rs 40,000 to Rs 55,000.”

Ever y retailer, dealer, hospital and institution shall display a price list as furnished by the manufacturer, on a conspicuous part of the business premises, so as to be easily accessible to any person wishing to consult the same, the ministr y said.

“The manufacturers/ importers not complying with the revised MRP af ter trade margin capping, shall be liable to deposit the overcharged amount along with interest at the rate of 15 per cent and penalty up to 100 per cent under the provisions of the Drugs (Prices Control) Order, 2013 read with Essential Commodities Act, 1955,” it added.