NPPA steps in to cap price of Medical Oxygen

NPPA steps in to cap price of Liquid Medical Oxygen and Medical Oxygen cylinders

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Last Updated on September 26, 2020 by The Health Master

National Pharmaceutical Pricing Authority (NPPA) has issued a notification yesterday vide its S.O. No. 3322(E) dated 25-09-2020 regarding Price Cap for Medical Liquid Oxygen and Oxygen Inhalation (Medicinal gas) in Cylinder.

To download the notification, click here

This issue was also raised and flagged by Narender Ahooja, State Drugs Controller, Food and Drugs Administration (FDA) Haryana in webinar organised by Govt of India for availability and price of Oxygen. FDA Haryana also flagged this issue that Liquid Medical Oxygen and Oxygen IP Medical Oxygen are two different products and needs to have separate price capping.

Also read How to make Medical Oxygen accessible & affordable

NPPA has issued press release:

The present situation of pandemic has resulted in increased demand of Medical Oxygen (MO) in the country and hence its availability is of utmost importance. Many of the States/UTs are dependent on the medical oxygen supply from other States/UTs.

The demand of Medical Oxygen has gone up almost four times, from 750MT/day to 2800 MT/day. This has caused strain at all levels in the value chain of production and supply. The manufacturers of Medical Oxygen and Fillers have given representation to the Government for up to three fold price increase in the Ceiling Price of gaseous Medical Oxygen.

It is also being reported that the rates of Medical Oxygen Cylinders have gone up dramatically even up to Rs. 100/CUM in some parts of the country.

NPPA Price of drugs

The government is committed to uninterrupted supply of Medical Oxygen especially in the times of pandemic. Oxygen Inhalation (Medicinal Gas) is a scheduled formulation, covered under the National List of Essential Medicines (NLEM). Its existing Ceiling Price fixed by NPPA is Rs. 17.49/CUM. However, due to absence of price cap on liquid medical oxygen, manufacturers have hiked prices to fillers. During present situation, supply of medical oxygen through cylinders has increased from 10% to around 50% of total consumption. Price regulation at this end is imperative for continued availability of medical oxygen across the country.

State governments have confirmed compliance to the Ceiling Price at Hospital end. However they have requested for flexible pricing based on terrain and distance to be covered looking to the challenge  of transporting oxygen in increased volumes, especially to distant and interior districts.

Also read medical oxygen related news, click here

The issue related to availability, including pricing of oxygen has been under the continued consideration of Empowered Group 3, constituted by the GoI. The EG3 has held extensive stakeholder consultations with MoH&FW, State Govts, Oxygen Gas Manufacturers, NPPA, DCGI and State Drug Controllers. It is felt necessary to further control price of LMO and Oxygen cylinders to ensure availability of oxygen to consumers for treatment in present senario.

To deal effectively with the situation, Ministry of Health & Family Welfare (MOH&FW), GOI has vide its letter dated 23.09.2020 conferred the delegation of powers under Section 10(20) (l) of Disaster Management Act, 2005 to NPPA to take all necessary steps to immediately regulate the availability and pricing of LMO and Medical Oxygen in cylinder.

The Authority deliberated upon the matter in its extra ordinary meeting held on 25.09.2020. It has been decided to invoke extra-ordinary powers in public interest, under Para 19 of DPCO, 13 and under Section 10(20) (l) of Disaster Management Act, 2005 to deal with the emergent situation arising due to the pandemic. Accordingly it has been decided:

1. To cap the ex- factory price of Liquid Medical Oxygen (LMO) at manufacturers end at Rs. 15.22/CUM exclusive of GST; and
2. To further cap the ex-factory cost of Medical Oxygen Cylinder at filler end at Rs. 25.71/CUM exclusive of GST in suppression of the existing Ceiling Price of Rs. 17.49/CUM, subject transportation cost fixation at state level, for six months.

The existing rate contracts of state governments for oxygen purchase, as applicable shall continue, in consumer interest. These prices will not be applicable to imports of Liquid Medical Oxygen and Oxygen Inhalation (Medicinal Gas) in cylinders. This will ensure availability of medical oxygen at consumer end at reasonable price both at hospital level and through oxygen cylinders.

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