Bombay HC Asks Union Govt to Respond Before Friday to Maharashtra FDA Letters on Fixing Price of N95 Masks
The Bombay High Court (BHC) on Tuesday asked additional solicitor general (ASG) Anil C Singh to take instructions from the Union government on capping prices for N95 masks and respond by Friday on two letters sent by Maharashtra government on the same subject. When the ASG informed the bench of chief justice Dipankar Datta and justice SS Shinde that the government had already capped prices of two-ply, three-ply masks and hand sanitisers, the bench orally directed him to take instructions on what the central government has done regarding the representation sent by Maharashtra Food and Drug Administration (FDA) on prices of N95 masks.
The BHC also directed the Union government to act before Friday on two letters sent by Maharashtra government on 13th and 15 May 2020. The 13th May letter sent by the commissioner of Maharashtra food and drug administration (FDA) had requested the chairman of National Pharmaceutical Pricing Authority (NPPA) to fix price for sale of N95 masks and personal protection equipment (PPE) kits.
The second letter sent on 15 May 2020 by the Maharashtra FDA to the NPPA shares details of investigation carried out and reports the findings against four companies in the state. The joint commissioner’s response also includes the prices currently being offered by various manufacturers namely, Magnum (Rs250), Venus (Rs180) and 3M (Rs121 or Rs146 depending on the model no.) of N95 masks. The commissioner reinforces in his letter that while investigation in this matter is being carried out, the NPPA should expedite the pricing matter on top priority.
Coming back to the BHC order, the bench was hearing a public interest litigation (PIL) filed by Sucheta Dalal, founder-trustee of Moneylife Foundation and Anjali Damania, founder-trustee of Voice of Indian Taxpayers, a non-government organisation (NGO).
The PIL sought relief from black marketeering, hoarding and profiteering of N95 masks in Maharashtra despite N95 masks being declared as essential commodity under the Essential Commodities Act, 1955. The petition also alleged that Maharashtra state had failed to take adequate measures to ensure that sufficient availability of surgical masks and other masks at fair prices.
"While these N95 masks are being sold at marked up rates of over 150% by insidious dealers, the frontline workers do not have enough N95 masks and till date more than 800 frontline workers have tested COVID-19 positive mainly due to the lack of adequate protective gear including N95 masks," the PIL mentions.
N95 masks or N95 respirators are particulate-filtering facepieces which filter at least 95% of airborne particles. The N95 mask requires a fine mesh of synthetic polymer fibers, also known as non-woven polypropylene fabric, which is produced through a process called melt blowing that forms the inner filtration layer that filters out hazardous particles. These masks provide protection against particulates but not against gases or vapours. Thus, these masks are ideal for use for frontline workers including healthcare workers who work in close proximity to the COVID-19 patients, as the severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) primarily spreads via respiratory droplets and particulates from cough, sneezes and talking.
As the number of confirmed cases grew, the demand for hand sanitizers and masks (including N95 masks) grew exponentially. On 13 March 2020, the union ministry of consumer affairs, food and public distribution issued an order for regulating production, quality, distribution, logistics of masks (two-ply, three-ply surgical masks and N95 masks) and hand sanitisers and further prevented hoarding, black marketing and profiteering on these items.
The ministry of chemical and fertilisers also passed an order on 13 March 2020 directing all state governments, union territories (UTs) and concerned state authorities to take necessary steps to ensure sufficient availability of surgical masks and other masks, hand sanitisers and gloves at prices not exceeding the maximum retail prices (MRP) printed on the pack size.
However, despite these directives from the Union government, the state government in Maharashtra failed to take any measures to ensure sufficient availability of surgical masks and other masks, hand sanitisers and gloves at prices not exceeding the MRP.
During the current pandemic, a major issue that has come to the fore and has been reported widely in the media is the rising number of frontline workers including doctors, nurses, ward boys, police personnel and sanitation workers who have tested positive for COVID-19. According to the latest media reports more than 800 frontline health workers working in government and private hospitals in Mumbai have been infected with the virus.
The petition states, "These healthcare personnel who were forced to work without adequate protection PPE proceeded to seek help from NGOs and social workers as the state seemed incapable of providing them the required number of PPE including N95 masks. These medical personnel sought donations of PPE and N95 masks from the general public in order to allay the shortage that the government was not able to fulfil."
Moved by these calls for help, both Moneylife Foundation and Voice of Indian Taxpayers sought to acquire these PPE kits and N95 masks so that the same could be provided to the frontline workers. It is during this endeavour to acquire these protective kits and N95 masks for our frontline workers that Ms Dalal and Ms Damania, the petitioners, were shocked to witness rampant black marketeering and profiteering in N95 masks and the abject failure of the state machinery to implement the order dated 13 March 2020 passed under the Essential Commodities Act, 1955.
When the two NGOs sought to acquire the N95 masks so that the same could be supplied largely to government, municipal and charitable hospitals or those designated for COVID-19 treatment, they realised that there are two companies producing N95 or equivalent masks around Mumbai. One was Venus Safety and Health Pvt Ltd at Taloja Industrial Area and Magnum Health and Safety Pvt Ltd near Palghar. When the NGOs approached these manufacturers to acquire N95 masks, they were informed that the entire production of the N95 masks was being acquired by the government and, hence, there was no stock left for dissemination to the consumers and refused to accept the purchase requests.
In the meanwhile, the Maharashtra government brought N95 masks needed to be approved by the state government’s Haffkine Institute. Eventually Venus Safety and Health agreed to provide 5,000 and 3,200 N95 masks to these two NGOs at Rs40 + GST and Rs60 + GST per mask, respectively.
When both Moneylife Foundation and Voice of Indian Taxpayers again approached Venus Safety and Health for more N95 masks so that they could in turn be provided to the frontline workers, they were informed that no orders would be accepted as all of their production was booked.
The company claimed that their entire production had been taken over by the government and refused to accept the NGOs purchase orders. After this, both Moneylife Foundation and Voice of Indian Taxpayers along with seven other NGOs wrote to Maharashtra chief secretary to bring to his notice the non-availability of N95 masks.
The petitioners Ms Dalal and Ms Damania assumed that all the N95 masks that were being produced by these two manufacturers were being acquired by the Union government and Maharashtra government and thus, these companies had no stock to sell to them.
But, to their shock and surprise soon after the petitioners were stonewalled by Venus Safety and Health, they started receiving unsolicited messages from multiple dealers and traders offering to sell to N95 masks at a mark-up of over 150%. The petitioners were flooded with WhatsApp messages, along with photographic proof of availability of stocks of N95 masks being manufactured by Venus Safety and Health. These messages were accompanied by videos showcasing proof of stock, some of the dealers were ready to provide as many as one lakh N95 masks at the price of Rs210 and GST. These dealers were selling N95 masks produced by both Venus Safety and Health and Magnum Health and Safety.
Appalled by the blatant and out in the open profiteering on N95 masks especially when the healthcare workers and essential service-providers were forced to work without these essential protective equipment, the petitioners did some probe. The essential question that came to light is if the entirety of the stock of Venus Safety and Health was being acquired by the government as the company had informed then where had these dealers acquired their stocks of lakhs of N-95 masks and more troublingly how were they replenishing the said stock?
Eventually, Ms Dalal and Ms Damania found that not only were the said masks freely available at a marked up price in the black market, but that the prices at which they were sold the N95 masks (Rs40 and Rs60, excluding GST) by Venus Safety and Health, were also considerably higher than the price at which the company had sold the same N95 masks to Haffkine Bio Pharmaceutical Corp Ltd on 28 January 2020. The petitioner learnt that Venus Safety and Health had sold 92,500 masks to the Haffkine at just Rs17.33 per mask.
"These acts of hoarding and profiteering has worsened an already dire situation. While our frontline workers are forced to perform their duties without adequate protective gear and mask. A scarcity of protective gear is being compounded further by hoarders and profiteers seeking to make a windfall by jeopardizing the health of crores of people," Ms Dalal and Ms Damania had contended in the PIL.