COVID-19: Govt Removes Masks-Sanitisers from Essential Commodities List; Wide Variation in Govt Procurement
Following a public interest litigation (PIL) in the Bombay High Court seeking a cap on the prices of N95 mask to curb hoarding and profiteering, the government has stymied the demand by simply removing masks and sanitisers from essential commodities. This essentially means that the manufacturers of masks can continue to charge the high prices that have prevailed since the COVID-19 lock-down and affects health care workers (HWCs) the most.
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.
A 1 July 2020 office memorandum (OM) issued by the department of consumer affairs ended this, saying, “...as on date there are no adverse reports from states or union territories (UTs) with respect to price or availability to continue face masks and hand sanitizers as essential commodities. Therefore, this department had decided not to continue these items as essential commodities under the essential commodities under the EC Act beyond 30 June 2020."
Curiously, on that very day, media reports said that the Maharashtra government planned to bring masks under price control. But more on that later.
A PIL filed by Sucheta Dalal and Anjali Damania had already exposed how the regulator argued for not capping prices and had even avoided following its own rules.
In June, the Bombay High Court (BHC) had asked the National Pharmaceutical Pricing Authority (NPPA) to relook and pass appropriate order within 10 days about capping price of N95 masks, in accordance with law, as per clause 20 of the Drug Price Control Order (DPCO). The time limit set by the Court ended on 23rd June. (Read- N95 Masks: Bombay HC Asks Union Govt and NPPA To Cap Prices in 2 Weeks
The BHC bench of chief justice Dipankar Datta and justice SS Shinde said in their order that “The NPPA cannot allow an increase in the price of a drug beyond 10% of the price in the preceding 12 months, so long as the statute is there. It cannot be left to the manufacturers.”
In fact, NPPA issued an office memorandum permitting manufacturers to use already high prices in April 2020 as the base to pretend a voluntary reduction in prices. This is astonishing, considering that the government-owned Haffkine Institute in Mumbai has purchased N95 masks at Rs17.33 (the wholesale price at which Haffkine Institute had procured N95 masks in February 2020) from Venus and the Mumbai municipal corporation continues to purchase them at Rs 42 (the same price at which Moneylife Foundation had procured them), while NPPA seemed satisfied with a ‘reduced’ price that was significantly higher.
Ms Damania, in her rejoinder filed in court had said, “Maharashtra Food and Drugs Administration (FDA)’s letter dated 15 May 2020, clearly show that though the MRP of N95 masks have been bloated to Rs199 per mask, the average rate charged of the said masks was Rs28.57 per mask in the fourth quarter of financial year 2019-2020 and had increased to Rs42.95 per mask and Rs46.40 per mask in the months of April and May 2020 respectively. Thus, it is clear that the MRP as set by the manufacturers are almost 300% higher than the average price at which these masks were being sold. Thus, it is no surprise that these manufacturers have been more than willing to reduce these MRP by close to 50% without any protest.”
A newspaper report from Lokmat, revealed that there are 14 different prices of N95 masks being sold at 14 different places in Maharashtra. The Latur district administration bought 10,000 N95 masks at Rs42 per piece, while the same mask was bought at Rs230 per piece by Sindhudurg district administration.
According to the Lokmat report, state government-run Haffkine Institute had bought triple-layer masks at Rs0.84 per piece. However, the lowest price paid by district administrations in Maharashtra is Rs3.20 paid by Satara. Mira Bhayandar Municipal Corp bought 10,000 triple layer masks at a whopping price of Rs40 per mask.