The Kerala High Court on Friday said the state government and its Medical Services Corporation, KMSC, cannot justify capping of RT-PCR price at Rs 500 on the ground that private labs are carrying out other tests and can make profits out of those.
"You cannot say they (labs) cannot do other business. Doing other businesscannot be a reason for fixing a price which is lesser than the cost the labs incur in conduct of the test," Justice T R Ravi said during hearing of pleas by several private labs challenging an April 30 order of the state government, slashing the rates for RT-PCR tests from Rs 1,700 to Rs 500.
The private labs said that even if 45 out of the 115 items they need are supplied by the Kerala Medical Services Corporation (KMSC), the cost incurred by them on each test would be over Rs 600 and it indicated that the price cap fixed by the agency was without any application of mind.
KMSC had on the last date of hearing told the court that it can supply only 45 out of 115 items requested by the labs for carrying out the test.
The labs also said that PPE kits, used during sample collection, cost around Rs 300 each presently as per the price fixed by the government and that too is a part of the RT-PCR test rates.
They told the court that the price of the PPE kits has been hiked periodically by the government. KMSC on the other hand disputed the claims of the labs.
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Both the state government and KSMC said they have made the best possible offer to the labs. After hearing both sides, the court reserved its order in the matter.
KMSC had earlier told the court that some of the labs have installed different proprietary machines and each of them require different reagents for which manufacturers are also varying and therefore, it would be difficult to procure them in the small quantities required by the individual labs.
The corporation had said that procuring such items in smaller quantities would defeat the purpose behind setting up of KMSC -- to procure things in bulk so that it is cost-effective.
Responding to the stand of KMSC, the labs had contended that it indicated that the corporation's earlier report arriving at a price of Rs 448.20 per test was an exercise which was carried out without any application of mind.
The labs further contended that the corporation, it appears, did not even ascertain what kind of reagents or proprietary machines they were using before arriving at that figure based on which the state government slashed the prices of RT-PCR tests from Rs 1,700 to Rs 500.
The state government had on July 8 informed the court that it had arrived at the figure of Rs 500 as the rates arrived at by KMSC for RT-PCR tests through static and mobile labs was Rs 448.20 per test.
It had also submitted that the cost of the kits and consumables for the purpose of carrying out the RT-PCR test had come down and that for similar tests the rates charged in states like Haryana, Telangana, Uttarakhand and Odisha were comparable with the price fixed by Kerala government.
The private labs, however, had contended that rates arrived at by KMSC were not justified as it makes purchases for the state in bulk and therefore, can get the materials at a much lesser price than the institutions who do notprocure
the same in such large volumes.
Earlier, a single judge bench had declined to stay the April 30 order, against which the private labs had appealed before a division bench which dismissed the same, but left open the legal and factual contentions to be raised before the single judge.