Manufacturers had approached the government to increase the ceiling price of gaseous MO to cope with the strain on production and the supply value chain due to high demand
Taking cognizance of increased demand for oxygen amid the novel coronavirus, or COVID-19, pandemic, the National Pharmaceutical Pricing Authority (NPPA) said it will cap the price of liquid medical oxygen (LMO) and medical oxygen (MO) cylinders.
“The present situation has resulted in increased demand for MO in the country and hence its availability is of utmost importance,” a statement from the Ministry of Chemicals and Fertilisers read.
It has decided to cap the price of LMO at the manufacturers' end at Rs 15.22/CUM exclusive of Goods & Services Tax. The ex-factory cost of MO cylinder at the fillers' end has been capped at Rs 25.71/CUM (exclusive of GST) in suppression of the existing ceiling price of Rs 17.49/CUM, subject to transportation cost fixation at state level, for six months.
NPPA said the existing rate contracts of state governments for oxygen purchase, as applicable, will continue, “in consumer interest”, while the ex-factory price cap of LMO and oxygen gas cylinders will be applicable to domestic production.
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Reviewing the situation, the ministry noted that in many states and Union Territories (UTs) are dependent on supply from other states to meet their MO supply requirements, which has pushed up demand by almost four times to 2,800 MT per day.
As per the statement, manufacturers had approached the government to increase the ceiling price of gaseous MO to cope with strain on the production and supply value chain due to high demand.
Adding that the Centre is “committed to uninterrupted supply of MO especially in times of the pandemic,” it noted that oxygen inhalation (medicinal gas) is a scheduled formulation which is covered under the National List of Essential Medicines (NLEM).
“Existing ceiling price of oxygen inhalation (medicinal gas) fixed by NPPA is Rs 17.49/CUM. But since there is no price cap for MO, manufacturers have hiked prices to fillers. During COVID, supply of medical oxygen through cylinders has increased to around 50 percent from 10 percent of total consumption. Price regulation at this end is imperative for continued availability of MO across the country,” it stated.
With regard to issues related to availability, the Empowered Group 2 has recommended that the NPPA consider: 1) Capping the ex-factory price of liquid oxygen in order to ensure its supply to fillers at reasonable prices; and 2) Cap ex-factory price of oxygen in cylinders to ensure supply of oxygen cylinders from fillers at reasonable prices.
The mentioned steps will be undertaken as per the Ministry of Health & Family Welfare's letter, dated September 23, which conferred the delegation of powers to NPPA to take all necessary steps to immediately regulate the availability and pricing of LMO and MO in cylinders.Follow our full COVID-19 coverage here