Govt OKs N-95 Masks Price Three Times What It Pays

Govt OKs N-95 Masks Price Three Times What It Pays

NEW DELHI, 25 MAY 2020:


Two days after the National Pharmaceutical Pricing Authority issued directions threatening action on high pricing of N95 masks, it has approvingly cited a price that is more than three times the government procurement rate for the masks.


On Saturday night, NPPA tweeted that after it had issued an advisory to N95 manufacturers, one of the major manufacturers had introduced a hospital pack of five N95 masks and five surgical masks at Rs 395 plus taxes. The authority took credit for this by stating at the beginning of the tweet: “NPPA intervenes to bring down N95 prices”. However the price cited approvingly by NPPA works out to almost Rs 80 for every N95 mask along with a surgical mask. The government procurement price for such a set is roughly Rs 25.


While the price of Rs 395 is way below what is being charged in the open market in many cases, it is way higher than the government procurement price. The NPPA had issued a memo on Thursday against hoarding, black marketing and high prices of N95 masks and had directed manufacturers, importers and suppliers of the masks “to maintain parity in prices for non-government procurement and to make them available at reasonable prices”. However, the memo hadn't specified what is a “reasonable” price or against which price sellers have to maintain parity.


NPPA had tweeted its memo on Thursday as “directives on N95 mask in order to ensure availability at affordable and reasonable prices”. It said, “the government is procuring largest chunk of the N95 masks directly from the manufacturers/importers/suppliers at bulk rates and ex-factory prices. However, it has been noticed that other procurers (non-government entities) are getting N95 masks at differential prices.” It was in this context that it directed all N95 mask sellers to “maintain parity” and ensure “reasonable prices”.


At that stage, it was unclear whether the NPPA wanted N95 masks to be sold at parity with government’s bulk procurement price or wanted all non-government entities to be sold the mask at the same price to ensure parity between them. The directive, which invoked the Essential Commodities Act, also did not define what is an “affordable” or “reasonable” price, raising the question of how it was to be enforced.


A PIL had been moved in the Bombay High Court on hoarding, black-marketing and profiteering in the sale of N95 masks last week. The HC had asked why there was no cap on the price of N95 masks, despite it being notified as an essential commodity and had asked for the government’s response. The petitioners submitted proof in the court of these masks being sold for Rs 17.33 to a government entity and being sold by the same company for anything between Rs 40 to Rs 250 to other parties. Doctors in several cities pointed out that they were shelling out as much as Rs 300 or more for an N95 mask.


NPPA also tweeted on Saturday night that more manufacturers were expected to follow with revised prices by Monday. It further stated that in the Mumbai high court PIL, it had submitted that it was looking into the demand supply mismatch and that it had advised N95 manufacturers to bring down prices voluntarily. The Times Of India