Covid tests set to get cheaper as 4,500 price cap removed

May 27, 2020 06:07 AM IST

In a move that will likely bring down the cost of testing substantially, the Indian Council of Medical Research (ICMR) on Tuesday removed the price cap of 4,500 on the reverse transcription-polymerase chain reaction (RT-PCR) test, billed as the gold standard for detecting the coronavirus disease (Covid-19). States have been given a free hand to negotiate with the approved laboratories and fix the cost of Covid testing.

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In a letter written to the states, ICMR director general Dr Balram Bhargava said that as testing capacity and infrastructure have improved significantly since the beginning of the outbreak, the ceiling price fixed earlier was not applicable. With domestic production being ramped up, the dependence on imported testing kits is also negligible.

“At the beginning of the Covid pandemic, there was a global crisis of testing kits and reagents as India was heavily reliant on imported products for molecular detection of viruses.As such in mid-March no rates for RT-PCR test for Coronavirus was available for reference in the country. Keeping in view the cost of imported kits and efforts involved in carrying out the test, ICMR suggested the upper limit of a single test as INR 4500,” said the letter, a copy of which was reviewed by Hindustan Times.

Karnataka took the lead last month and capped the Covid testing price at 2,250 in private labs within the state for samples sent by the government.

Private labs elsewhere have already begun the process of cost revision. “We have already reworked our costing, and to Delhi government we are offering Covid test at about 3,500. It’s a done deal from our side,” said Dr Arvind Lal, chairman and managing director, Dr Lal PathLabs.

India has 428 government and 182 private labs engaged in Covid-19 testing, with a capacity of conducting about 140,000 tests a day.

“… keeping in view the evolving prices of the testing commodities, the earlier suggested upper ceiling of INR 4500 may not be applicable now and therefore all state governments/UT administrations are advised to negotiate with private labs and fix up mutually agreeable prices for samples being sent by the government and also private individuals desirous of testing by these labs,” said the advisory.

The government has been working with domestic manufacturers “…by handholding and promoting them to locally manufacture swabs, viral transport medium and RNA extraction kits.. now testing supplies are also stabilising and many of you have started procuring such kits from local market. Due to varied options of testing materials/kits including indigenous ones, the prices are becoming competitive and are undergoing reduction,” added the advisory sent to all state chief secretaries.

Another private lab owner, on condition of anonymity, said lowering prices of Covid testing further could compromise the quality of testing. “The cost hasn’t changed much except for say PPE {personal protection equipment} kits and masks. The test kits are still expensive and cost me say about Rs.1,600 for each test. I haven’t had the confidence in Indian kits yet. We had wanted it to be much higher when ICMR was fixing prices initially but it was capped at 4,500. We aren’t making any money out of it, and will get into significant losses.”

The domestic kit manufacturers say it is going to be some time before pricing changes significantly.

“Pricing depends on multiple factors, not just bulk production; for example the cost of technology plays a role that is usually expensive. An increased production volume does make a difference in lowering costs but how much the cost comes down will hinge on other factors also. For a lab it may help if they are doing more tests in a day because overheard charges will remain somewhat same. But I can say for sure that in some time India is going to be a competitive market globally,” said Hasmukh Rawal, managing director, Mylab Discovery Solutions, a Pune-based manufacturer of RT-PCR diagnostic kits.

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    Rhythma Kaul works as an assistant editor at Hindustan Times. She covers health and related topics, including ministry of health and family welfare, government of India.

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