Rs 400 cap on rapid testing kits from China: HC

Now, a South Korean firm has set up a partnership for manufacturing the kits in Manesar

Justice Court
Picture: Pixabay

NEW DELHI: Stating that public interest must “outweigh private gain”, Delhi high court capped the price of 4.5 lakh Covid-19 rapid testing kits scheduled to arrive from China at Rs 400 each.

The order came while dealing with a payment dispute between two private firms — the importer of the testing kits and the sole distributor in India — which had resulted in delay in their arrival. The court ended the dispute by allowing sale of the kits that have already reached the Indian Council of Medical Research and the Tamil Nadu government at Rs 600 each but said the next batch would be sold at Rs 400 each.

Picture: Pixabay

Justice Najmi Waziri said, “The court is of the view that a profit mark-up of Rs 155, i.e. 61%, on the landed cost price of Rs 245 is much on the higher side and in any case more than sufficient for the seller, for the kit and tests to be made available in India for urgent extensive tests through the country, especially in these present extraordinary circumstances of the worldwide pandemic.”

An official source said the kits had been procured by ICMR at short notice as the government had to hunt for suppliers keeping in mind limited availability and that major sourcing took place from China. The efforts to track other suppliers resulted in the discovery that the original makers were Chinese. Now, a South Korean firm has set up a partnership for manufacturing the kits in Manesar. Following result variations, ICMR is now checking the quality of the Chinese kits.

Also read: IIT-Delhi’s COVID-19 test kit gets ICMR’s approval

The court said, “For people to be assured that the pandemic is under control and for governments to ensure and for agencies engaged in the frontline battle to safeguard people’s health, more kits and tests should be made available urgently at the lowest cost… Public interest must outweigh private gain.”

Justice Waziri’s order came on a petition by Rare Metabolics Life Sciences and Aark Pharmaceuticals, which had entered into a pact with Matrix Labs, their importer from China, to distribute them at Rs 600 each, the rate fixed by ICMR.

According to the petition, the initial order was for nearly 10 lakh kits, of which 5 lakh were meant for ICMR and 2.76 lakh had already been delivered. However, Matrix Labs insisted that it would not hand over the remaining 2.24 lakh kits till it received full payment. The distributor companies told the court that as per the agreement, an initial payment of Rs 12.75 crore was made for import of 5 lakh test kits at Rs 600 each and the remaining Rs 8.25 crore was to be paid after it received money from ICMR.

Breaking the logjam, the court cleared payment of Rs 21 crore for the importer and ordered the remaining kits to be immediately dispatched to ICMR and Tamil Nadu government. It also said the distributor would get Rs 30 crore plus GST from ICMR and secure a profit of “Rs 9 crore despite no value addition to the imported medical material”.