What Do Private Labs Feel About SC’s Order on Free COVID-19 Tests?

FIT reached out to private labs to understand what they think of the judgement and how much of it is practical.

5 min read
FIT reached out to private labs to understand what they think of the judgement and how much of it is practical.

In an interim order issued on Wednesday, 8 April, the Supreme Court directed that private labs should conduct coronavirus tests free of cost.

While the government laboratories have been offering these tests for free, private labs are currently allowed to charge a maximum of Rs 4500 for screening as well as confirmation tests for the disease. This price was capped by the Indian Council of Medical Research (ICMR) in its guidelines released on 21 March, with the caveat that the apex body ‘encourages free or subsidised testing in the hour of the national public health emergency’.

The SC bench, which issued notice to the Centre and sought its response in two weeks, added that whether the private labs carrying free of cost COVID-19 tests are entitled to any reimbursement of expenses incurred shall be considered later on.

Currently, there are 139 government labs and 65 private labs across the country providing COVID-19 tests. All 139 government labs offer tests for free. In a notification on 4 April, the government also extended the Ayushman Bharat scheme to cover COVID-19 testing and treatment in private hospitals and labs.

The number of tests done in the past one week in private labs had also gone up. On 7 April, 2267 tests were carried out in private labs.

Since these laboratories are major stakeholders in the decision, FIT reached out to some to inquire what they think of the judgement, how much of it is practical, and what they are expecting from the government.

‘This is a Setback’, Says MD, Thyrocare

Speaking to FIT, Dr Arokiaswamy Velumani, Managing Director at Thyrocare, Mumbai, said, “The central and the state government need to take a call. We will follow as much as we can. But I have to say, this is a major setback.”

“We, at Thyrocare, have already been offering the test at a subsidised rate of Rs 3500. But I am a low-cost operator. I know that the labs conducting the tests at the price cap are also in a tough spot. We need practical solutions.”
Dr A Velumani

He claims at least 10 percent of the population can afford these tests. For others, there are government laboratories offering tests for free. If private labs are unable to sustain beyond a point, it would be a loss for a country which is trying to expand its testing.

“Now, some people who had come for the tests in the past few days have started asking us for refund!”
Dr A Velumani

The government would have to step in and offer support to private labs, he adds. The labs also need more clarity as to whether they should wait for the government decision or follow the SC order immediately.

“In the last 10 days, those who could pay for our facilities came forward and testing galloped. Now if that is blocked with a judgement without adequate clarity, it will be a set back for our COVID19 fight,” Dr Velumani said in a tweet.

We Are Not Doing This for Money, Claim Private Labs

Dr Arjun Dang, CEO of Dr Dangs Lab, Delhi, tells FIT that it is important to understand that this is not like any other regular test. He says, “We endorse the Supreme Court judgement which aims at increasing accessibility to COVID-19 testing and to make it affordable.”

“However for private labs there are numerous fixed costs such as reagents, consumables, skilled manpower and infrastructure specifics. The COVID-19 pandemic also calls for immense infection control measures like personal protective equipment, viral transport media and the need to keep sanitation and employee safety in mind at every step. Private labs are barely able to recover costs at the govt mandated cost of Rs 4500.”
Dr Arjun Dang

Dr Dangs Lab in Delhi has started conducting the tests free of cost as they await further clarity from the government. “We hope the government comes up with modalities so that testing in private laboratories remains sustainable.”

FIT also reached out to Aishwarya Vasudevan, Group COO, Neuberg Diagnostics, who said that the company had already been offering the tests free of cost for people from its Bangalore lab, and for BPL patients in Chennai, Pune and Ahmedabad. Complying with the SC order, testing by the lab has now been made free for everybody in these cities. She emphasised that these tests are not a ‘revenue-generating activity’ for the labs.

“We are also of the opinion that the government or corporates, through their CSR funds, should reimburse Rs 2000-Rs 2500 per test to the private labs so that their material costs are covered. Alternatively, ICMR or State Governments should provide testing kits, sample collection materials, and PPE for private labs to do free testing.”
Aishwarya Vasudevan

She also requests that the MRP for PCR kits, RNA extraction kits, VTM sample tubes should be fixed, as this initiative from the government will drive free testing more effectively and will be welcomed by private labs.

“Given the current situation, the routine business of all Private labs have fallen by 70%- 80% and facilitating free COVID-19 testing must be supported by the Government.”
Aishwarya Vasudevan

Activists Await Government Intervention

Malini Aisola, Co-convenor, All India Drug Action Network (AIDAN) said that other health groups along with AIDAN had written to the government to make testing as well as treatment free, which is why they are pleased with the order. She adds, however,

“In order to facilitate the low cost procurement of test kits, the government should do a cost estimation exercise and cap the price of the tests kits. This would help the government ramp up testing and ensure that approved private laboratories continue to offer COVID-19 tests at full capacity. Any reimbursement of costs of the private labs must be rational and evidence-based.”
Malini Aisola

Others are more critical of the judgement. Biocon Chairperson Kiran Mazumdar Shaw in an interview to CNBC-TV18, said, “They are not large organisations. They cannot run their businesses by giving credit to the government since the reimbursements will take time.”

She is of the opinion that private labs could have perhaps done 10 percent of the testing for free, but this judgement will severely affect testing. “Pvt labs simply cannot be expected to run their businesses on credit,” she tweeted.

Shamika Ravi, former member PM's Economic Advisory Council, also took to Twitter to express her opinion on the judgement and said, “The astounding economic illiteracy of the judiciary in India has already cost us significant growth. Now it will cost us lives...I hope the govt will push back against this overreach.”

The final decision rests in the hands of the government, and while rampant testing is crucial, a sustainable and practical approach is what the labs are hoping for.

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