Delhi HC Caps Price of Testing Kits From China at Rs 400 Per Unit, Says Profit Margin Was High

New Delhi: The Delhi High Court has directed three private companies importing Covid-19 testing kits from China to cap the selling price at Rs 400 per unit, down from the Rs 600 per kit rate approved by the Indian Council of Medical Research.

Saying that public good must be prioritised over private gain, the court ruled that test kits should be made available at the lowest possible price so that the virus can be controlled and people's health can be safeguarded at a time when the country was facing an "unprecedented medical crisis".

“The litigation between the parties should give way to the larger public good,” a single bench of Justice Najmi Waziri said, according to the LiveLaw. “In view of the above, the kits/tests should be sold at a price not beyond Rs 400 each.”

However, the order would not affect price of the kits to be sold to ICMR and the Tamil Nadu government, who had placed the original orders.

The court’s order came after Rare Metabolics Life and Aark Pharmaceuticals filed a petition to seek the release of 7.24 lakh test kits from their importer, Matrix Labs. The petitioners alleged that the importer was asking for full payment before delivering the kits.

According to the petition, the initial order was for 10 lakh kits of which five lakh were meant for ICMR. Out of the five lakh meant for ICMR, 2.76 lakh were delivered. Post the delivery of the first instalment, the importer said it will not hand over the remaining 2.24 lakh of the 5 lakh kits that were supposed to go to ICMR till it received full payment, the petition claimed.

The petitioner companies said they have paid the initial payment of Rs 12.75 crore for the import of 5 lakh test kits at Rs 600 each. According to the agreement, the remaining Rs 8.25 crore was to be paid after they received money from ICMR, said the petitioners.

After hearing both sides, the court said that Covid-19 tests “are required in the country on urgent basis” and directed that the remaining 2.24 lakh of the 5 lakh kits be delivered to ICMR the moment they arrive in India.

The court also directed the companies that the remaining amount of Rs 8.25 crore (at Rs 600 per kit) should be paid to Matrix within 24 hours of receiving payment from ICMR. Of the remaining five lakh units, out of the initial order of 10 lakh, 50,000 kits have to be kept aside for Tamil Nadu government, the court said.

It added that remaining 4.5 lakh kits will be sold at the price of Rs 400 to any “government, governmental agency or private entity.”