Government caps trade margin on Oxygen Concentrators at 70%

New Delhi, June 4, 2021

The National Pharmaceutical Pricing Authority (NPPA) has, in the larger public interest, capped the trade margin up to 70% on price to distributor (PTD) level on oxygen concentrators.

This has been done in view of the extraordinary circumstances arising due to the COVID-19 pandemic that has resulted in recent volatility in maximum retail prices (MRP) of oxygen concentrators, an official press release said.

The Government decided to step in after finding that margin at the level of distributor for oxygen concentrators ranged up to 198%.

The NPPA has set the cap by invoking extraordinary powers under Para 19 of the Drugs (Price Control) Order (DPCO), 2013.

Earlier, in February 2019, the NPPA had capped the trade margin on anti-cancer drugs.

Based on the notified trade margin, NPPA has instructed the manufacturers and importers to report revised MRP within three days. Revised MRPs will be informed in public domain within a week by NPPA, the release said.

Every retailer, dealer, hospital and institution shall display price list as furnished by the manufacturer, on a conspicuous part of the business premises in a manner so as to be easily accessible to any person wishing to consult the same.

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 the rate of 15% and penalty up to 100% under the provisions of the DPCO, 2013 read with Essential Commodities Act, 1955, the release said.

State Drug Controllers (SDCs) shall monitor the compliance of the order to ensure that no manufacturer, distributer, retailer shall sell oxygen concentrators to any consumer at a price exceeding the revised MRP, to prevent instances of black-marketing.

The order shall be applicable up to November 30, 2021, subject to review.

"With the spurt in cases under COVID 2.0 pandemic in the country, demand for Medical Oxygen has gone considerably. The Government is striving to ensure uninterrupted supply of Oxygen and Oxygen Concentrators in adequate quantity in the country during the pandemic. Oxygen Concentrator is a Non-Scheduled Drug and presently under voluntary licensing framework of Central Drugs Standard Control Organization (CDSCO). Its price is being monitored under the provisions of DPCO 2013," the release added.

NNN