A legal dispute in Delhi High Court between the distributor and importer of COVID-19 rapid test kits being shipped from China has unearthed massive 145% profiteering and over-pricing in kits sold to Indian Council of Medical Research (ICMR).
The Pricing Structure of SARS CoV-2 Antibody test kits:
imported from China’s Wondfo : $3 ( 225 Rs) per unit
importer Matrix Labs air freight landing cost : Rs 20
Net Cost per Unit : Rs 245 per Unit
On March 27, 28 ICMR placed an order to buy 5 lakh kits at Rs 600 plus GST extra per test kit .
Importer Matrix Labs sells to distributor Rare Metabolics Life Sciences at Rs 400 per test kit
Rare Metabolics contracted to ICMR at the government approved rate of @Rs 600 (plus GST)
Net profit per test kit : 145% over basic imported cost
Net Profit for 5 Lakhs Kits for Importer & Distributor : 17.75 Crores Rs
Rare Metabolics intends to sell 1 million kits; order was placed with Matrix lab for 5 lakh kits
Out of 5 lakhs order., already 2.76 lakh have been delivered to ICMR and remaining 2.24 lakh tests are about to land
Matrix Labs has an order to supply 50,000 kits to Tamil Nadu through dealer Shan Biotech and Diagnostics at Rs 600 per test
Of this, 24,000 have already been supplied; 26,000 more are yet to be delivered
After Hearing both parties , Delhi High Court single bench of Justice Najmi Waziri observed 145 per cent mark-up on such test kits is on the “higher side” and disallowed a 145 pc mark-up from landed price . Instead, Justic Waziri slashed price for every kit by 33 per cent from Rs 600 to Rs 400 per test.
The order was against a petition by Rare Metabolics, the sole distributor of rapid antibody test kits imported by Matrix Labs, the respondent in the case, from China’s Wondfo Biotech.
Following the Delhi High Court order, both parties have agreed to sell antibody test kits in India at the court-mandated price of Rs 400 per kit, inclusive of GST.
After listening to both parties, Delhi High Court decided that 2.24 lakh tests shall be delivered to ICMR, the moment it land in India.
The balance amount of Rs. 8.25 crore has to be first paid to importer Matrix Labs within 24 hours of petitioner receiving monies from ICMR, before they are adjusted for any purpose.
The court also ordered remaining 26,000 kits from the Tamil Nadu government’s order to be provided directly to the stated the moment they reach India.
[splco_quote]”So, from the other 5 lakh kits/tests, 50,000 shall be excluded for the State of Tamil Nadu and the remaining 450,000 would be available to the respondent to be disposed-off in terms of the above, directly to any Government or governmental agency or any private entity which has received due approval to carry out such tests,” the court ordered.[/splco_quote]
it should be noted a South Korean company has launched the production of Covid-19 rapid antibody testing kits at its subsidiary at Manesar in Haryana, with a capacity of making 500,000 kits per week, to meet the needs of the Indian market.
The Chhattisgarh government is set to be one of the first customers for the testing kits made by SD Biosensor Healthcare, the subsidiary of the South Korean firm, with state health minister TS Singh Deo tweeting that authorities plan to procure 75,000 kits at a price of Rs 337 each kit.
Now few basic questions arise why rather then picking from a local manufacturing facility at a lesser cost of 337 Rs per unit ICMR a government institution opted for Imported kits at a higher cost .
This highest 145% profit from imported units doesn’t amount to loss of 17 cores Rupees for ICMR if not both Importer & distributor get in to distribution right .
Should not the purchase process of ICMR put in order .. Even after if discussed in open court ..