Tatsat Chronicle Magazine

Government Caps Trade Margin On Oxygen Concentrators

July 6, 2021
oxygen concentrators
Photo credit www.freepik.com

NEW DELHI: In view of the extraordinary circumstances arising due to the Covid19 or Coronavirus pandemic, the central government has decided to step in and regulate Maximum Retail Prices (MRP) of oxygen concentrators. Currently, the trade margin at the level of (Price to Distributor) ranges up to 198 per cent. The National Pharmaceutical Pricing Authority (NPPA) has capped it at 70 per cent. The cap will be in force till the end of November this year.

The NPPA has data from 89 manufacturers and importers of oxygen concentrators for 179 products which show that for the imported goods, the trade margin range for PTD is 7 to 198 percent, and in the case of domestic manufacturers, the range is 12 to 90 percent. Simulation analysis shows that at a 100 percent margin on PTD, 16 out of 179 products will be impacted. At a 70 percent margin on the PTD, a total of 59 out of 179 products will be impacted. Justifying its stance of capping the trade margin, the NPPA said that if the margin is capped at 70 percent, it would boost the government’s ‘Make in India’ and help the consumers. It also clarified that price at which the distributor purchases the product is the trade margin.

The authority has specified that every retailer, dealer, hospital, and institution shall display price list as furnished by the manufacturer conspicuously on the of business premises in a manner that it is easily accessible to any person wishing to check. The manufacturers and importers not complying with the revised MRP after trade margin capping shall be liable to deposit the overcharged amount along with interest at 15 percent and penalty up to 100 percent under the provisions of the Drugs (Prices Control) Order, 2013 read with Essential Commodities Act, 1955. The State Drug Controllers (SDCs) shall monitor the compliance to ensure that no manufacturer, distributor, the retailer shall sell oxygen concentrators to any consumer at a price exceeding the revised MRP. This will help prevent black marketing.

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