CASE: R Cell Diagnostic and Research Centre and others v. State of Kerala and others
CORAM: Hon’ble Justice P.V. Asha
The Kerala HC directed the Government of Kerala to consider the private laboratories’ grievances against the November order restricting the price of COVID-19 tests to Rs 1500.
Within 3 weeks of the date of delivery of the judgment, a single bench of Justice PV Asha directed the Government to take a decision. The Court allowed the laboratories to charge up to Rs 2100 for COVID-19 tests until then, as set out in a government order issued in October 2020.
The petitioners, a group of seven labs, challenged the price reduction as unreasonable. They argued that six types of tests are provided here and the expense incurred by petitioners to maintain quality standards is more than the cost now set.
In Shashank Deo v. Union of India, the petitioners also relied on the order of the Supreme Court that allowed private laboratories to charge fixed rates in accordance with the ICMR and limited the scope of free tests to economically weaker classes. The prices were capped at Rs 4500 by the ICMR. Consequently, the petitioners’ argument was that the State Government had no power to further reduce the maximum charges.
Advocate Paul Jacob, speaking for the petitioners, argued that the order had been passed without giving the parties concerned an opportunity for a hearing. The State submitted that, after taking into account different factors, the rate had been re-fixed, including the costs of the reagents and kits needed for the test and the rates prevailing in other States.
It was claimed that, due to the lockdown, the prices of kits were higher during the early days of the pandemic because they had to be imported, but now that they are made locally, higher rates are not justifiable. It is also argued that the rates are revised gradually after a meticulous market analysis is done through the Medical Services Corporation with due regard to the cost involved.
The Court also noted that the Government had taken the views of the private laboratories before passing the price-fixing order in July – which capped the price for RTPCR tests as Rs 2750/ -.