Free COVID-19 tests: Private labs cry foul, say need government support

Expressing their dismay at the Supreme Court's order to make COVID-19 tests free, private diagnostic laboratories have said they would be able to execute it on the ground only if government or corporates reimburse the cost of testing or ICMR chips in with required support.

Sources told Moneycontrol that private diagnostic labs will be collectively filing an appeal against the apex court's interim order.

The Supreme Court on April 8 asked the government to make COVID-19 testing free at all labs. The government had last month allowed many private labs to do testing for COVID-19. However the government capped the charges at Rs 4,500. Currently, COVID-19 testing is offered free of cost at government testing facilities.

The Supreme Court sought government's views on this while passing the interim order. The government will have to respond to the court notice in two weeks.

Private lab chains told Moneycontrol that their operations have been badly hit due to the lockdown in place and facilitating free COVID-19 testing must be supported by the government.

"We are of the opinion that the government or corporates, through their CSR funds, should reimburse Rs 2,000 - Rs 2,500 per test, to the private labs so that their materials costs are recovered," said Aishwarya Vasudevan, Group COO, Chennai-based Neuberg Diagnostics.

Financially unviable 

"Private labs will not be able to participate if we have to offer COVID-19 for free. It costs us Rs 1500-Rs 1800 for test kit, in addition to sample collection materials, personal protection equipment, phlebotomist and transportation charges to collect samples at the door step, then we have to maintain Biosafety Level- 3 clean rooms, rents, electricity, salaries for lab technicians, it is simply unviable," said Arunima Patel. Founder and MD, Mumbai-based iGenetic Diagnostics.

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Patel added that the price offered by ICMR itself will barely covers the costs.

"Even if government pays, what is the guarantee that they will pay on time, at the end of the day we have to pay salaries to our employees, collection agents, rents for our labs," she questioned.

Arokiaswamy Velumani, Chairman and MD of Thyrocare Technologies said comparing government labs and private is unfair.

"For Govt, Land, Building, Electricity, salaries, Reagent kits, PPE, all free. Let me know, which private lab refused for this deal.I can do a lakh a day free," he said.

Biocon Chairperson Kiran Mazumdar-Shaw said the judgment "will severaly affect testing."

Vasudevan of Neuberg says that the maximum retail price for PCR kits, RNA extraction kits, VTM sample tubes should be fixed.

"We feel this initiative from the Government will drive free testing more effectively and will be welcomed by all private labs," she added.

Capping test kit prices

However All India Drug Action Network (AIDAN) and other NGOs like All India Peoples Science Network (AIPSN), the Jan Swasthya Abhiyan (JSA), have welcome the Supreme Court judgement.

"The cap on private lab charges of Rs. 4500 had in fact enabled price inflation of test kits and allowed for excessive profits to private labs, which were heavily advertising their services," AIDAN said.

"In order to to facilitate the low cost procurement of test kits, the government should do a cost estimation exercise and cap the price of test kits. This would help the government in ramping up testing and ensure that approved private laboratories continue to offer Covid-19 tests at full capacity. Any reimbursement of costs of the private lab must be rational and evidence based,” it added.

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