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Necessary To Notify Oxygen Concentrators, Pulse Oximeters As Essential Commodities Under Essential Commodities Act

Necessary To Notify Oxygen Concentrators, Pulse Oximeters As Essential Commodities Under Essential Commodities Act
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India has been struggling with COVID-19 for more than a year now. The pandemic is no stranger and has cost us our loved ones and takes people within its grips daily. There is a major resource crunch on already overburdened health infrastructure. This resource gap has given rise to a few anti-social elements trying to turn misery into profits by hoarding, black marketing, and...

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India has been struggling with COVID-19 for more than a year now. The pandemic is no stranger and has cost us our loved ones and takes people within its grips daily. There is a major resource crunch on already overburdened health infrastructure. This resource gap has given rise to a few anti-social elements trying to turn misery into profits by hoarding, black marketing, and creating an artificial demand for essential lifesaving drugs. However, the legislature is well equipped with a legal framework of various acts that enable the Central Government to step in and control the commodities' supply, production, and prices. One such example would be the order by the Ministry of Consumer Affairs, Food and Public Distribution dated 21st March 2020 by which the costs of Hand Sanitizers and face masks were capped.

At present, people are running from pillar to post for finding oxygen, pulse oximeter, oxygen concentrators, and other lifesaving drugs. The system is overburdened, and people are forced to amplify demands via social media platforms like Twitter, Instagram, and Facebook. This has given rise to rampant hoarding and overcharging of these medical devices and drugs. However, not every kind of hoarding is considered to be an offence. For instance, a person who has imported and stored a particular quantity of goods in his warehouse cannot be charged for hoarding unless those specific goods are notified as Essential Commodity. If the same goods are sold over and above the MRP, the consumer can take the assistance of the Consumer Courts, but the seller will not and cannot be held to be liable under Criminal Law or any other Special Enactment if the channels for import/manufacturing were legal. It may be immoral or unethical, but it is not illegal.

On 7th May 2021, the Delhi Police allegedly busted a "massive oxygen concentrator racket" by conducting raids at popular South Delhi eateries, including Khan Chacha and Town Hall. The police claim to have seized around 524 oxygen concentrators. In the status report, Delhi Police have said their initial investigation revealed Matrix Cellular – firm which imported the devices, was taking "undue advantage" of the Covid crisis and made "wrongful pecuniary gain". These are a few of many busts which have been conducted, pan India.

India is currently struggling with the second wave of COVID-19 with experts opining that the third wave is inevitable as per a news article published by the Hindu[i], on its online news portal. As on 07.05.2021, the data shared by Ministry of Health and Family Welfare (hereinafter referred to as "MOHFW" is as follows:

Date

India (Daily New cases)

Delhi (Daily New Cases)

01.02.2021

8,635

227

01.03.2021

12,286

175

01.04.2021

81,466

2,790

07.05.2021

4,14,188

25,219

This article explores the present situation concerning the rising demand for essential lifesaving drugs, the legal framework, and the grey area.

Section 2A of The Essential Commodities Act (hereinafter referred to as "ECA") states that, for this Act, "Essential Commodity" means a commodity specified in the Schedule of ECA. Entry No. 1 to the Schedule annexed with Section 2A of the ECA includes "Drugs" as defined under Section 3(b) of The Drugs and Cosmetics Act, 1940 (hereinafter referred to as "DCA"). This in no way implies that every drug which is covered by the definition of "Drug" under Section 3(b) is an Essential Commodity. The section is an enabling provision that empowers the Central Government to declare any commodity as an Essential Commodity by adding it to the Schedule of predefined classes. Once a particular commodity is notified, and an order regulating its price is passed under Section 2A r/w Section 3 of ECA, any breach would entail punishment up to seven years, in addition to fines, seizure of property, and other penalties.

However, it is interesting to note that the definition of "Drugs" under DCA is not limited to medicines and covers "Medical Devices" as well. Medical Devices are governed by the Medical Devices Rules, 2017[ii] (hereinafter referred to as "MDR"), which were notified by MOHFW on 31.01.2017 which came into effect from 01.01.2018. These rules are in conformity with the Global Harmonization Task Force (GHTF) framework of 1993, which emboldens uniformity in standards and regulatory practices related to the safety, performance, and quality of medical devices. The GHTF not only promotes technological innovation but also facilitates international trade. From time to time it publishes certain documents for basic regulatory practices.

The MOHFW vide S.O 648(E)[iii] dated 11.02.2020 issued a new definition of "Medical Devices", by using powers conferred under Section 3(b)(iv) of the DCA. The notification effectively defines "Medical Devices" to include:

All devices including an instrument, apparatus, appliance, implant, material or other article, whether used alone or in combination, including a software or an accessory, intended by its manufacturer to be used specially for human beings or animals which does not achieve the primary intended action in or on human body or animals by any pharmacological or immunological or metabolic means, but which may assist in its intended function by such means for one or more of the specific purposes of ―

(i) diagnosis, prevention, monitoring, treatment or alleviation of any disease or disorder;

(ii) diagnosis, monitoring, treatment, alleviation or assistance for, any injury or disability;

(iii) investigation, replacement or modification or support of the anatomy or of a physiological process;

(iv) supporting or sustaining life;
(v) disinfection of medical devices; and (vi) control of conception.

On 11.02.2020 The MOHFW issued a notification to amend MDR and specified that these rules may be called the Medical Devices (Amendment) Rules, 2020[iv] (hereinafter referred to as "amended MDR") and shall come into force on 01.04.2020. The said amendment added Chapter IIIA to the MDR which entails all devices notified under Section 3(b) of the DCA needs to be registered under the provisions of Chapter IIIA of the Rules in accordance with the newly added Rules 19A to 19F, excluding the devices that are notified under Schedule Eight of the rules. The Amended MDR introduces two changes to MDR. The first is introduction of a new chapter for registration of Newly Notified Medical Devices by their respective manufacturers and importers. The second is an exemption for the 37 categories of already regulated or notified medical devices from the requirement of registration introduced by the new chapter[v]. The combined effect of the new notified definition under Section 3(b)(iv) of the DCA and the amended MDR is that all Medical Devices will be subject to quality and safety regulation as of the effective date of both notifications, which is April 1, 2020. As a result, all medical devices will be subject to DCA regulation in accordance with MDR.

From the above, it can be construed that medical devices such as Pulse Oximeters and Oxygen Concentrators (amongst other medical devices) are "Drugs" within the definition of Section 3(b) of DCA. This proposition is further strengthened by Notification dated 03.09.2020 issued by Directorate General of Health Services, Central Drugs Standard Control Organization (Medical Device Division). This is a draft notification issued to stakeholders for their comments. The notification under Annexure II creates 24 Categories under which Medical Devices are classified and are to be mandatorily registered as per the deadline Set in The MDR Amendment, as per the risk classification set under the rules. It is pertinent to note that both "Oxygen Concentrators" and "Pulse Oximeters" are classified under "Respiratory category" – Entry No. 44 and 48 respectively. Similarly, National Pharmaceutical Pricing Authority, Ministry of Chemicals and Fertilizers vide S.O. 1232(E) dated 31.03.2020[vi], has further clarified that Medical Devices intended for use in human beings or animals have been notified as Drugs with effect from 01.04.2020; all Medical Devices shall accordingly be governed under the provisions of the Drug (Price Control) Order, 2013 (hereinafter referred to as the "DPCO").

Now, as "Medical Devices" are included in the definition of "drugs" under Section 3(b) of DCA, the Government is well empowered to declare Oxygen Concentrators, Pulse oximeters, and any other medical device as Essential Commodities under Entry 1 of the Schedule appended to Section 2A of ECA and regulate their Prices. It must be noted that the National Pharmaceutical Pricing Authority (NPPA), which comes under the Ministry of Chemicals and Fertilizers, is a regulatory authority and has the power to set the prices of drugs and to monitor prices, but in cases of emergency, the Government can do so by passing orders under ECA.

It is to be noted that vide notification S.O. 3322(E) dated 25.09.2020 NPPA had fixed the price of Liquid Medical Oxygen and Oxygen Inhalation (Medicinal Gas) in Cylinder, excluding GST at the maximum price of Rs. 15.22 & Rs. 25.71 per cubic meter respectively and the fixed Ex- factory prices were to be valid till 30.03.2021. Thus, this notification ensures that there is a fixed price on the sale of Liquid Medical Oxygen and Oxygen Inhalation (Medicinal Gas) in Cylinder Pan India without prejudice. However, unlike Liquid Medical Oxygen and Oxygen Inhalation (Medicinal Gas) in Cylinder, there is no fixed price on the sale of medical devices such as oxygen concentrators and pulse oximeters in India, and these items are being sold at exorbitant prices, leading to hoarding, black marketeering, and profiteering from the sale of such medical devices. Further, vide notification S.O. 1335(E) dated 25.03.2021[vii], NPPA extended the validity of the notification S.O. 3322(E) dated 25.09.2020 until 30.09.2021. This clarifies further that the price of Liquid Medical Oxygen and Oxygen Inhalation (Medicinal Gas) in Cylinder will remain fixed at Rs. 15.22 & Rs. 25.71 per cubic meter respectively until 30.09.2021.

Amidst this massive resource crunch and non-availability of cheap alternatives to oxygen, there were several representations from various non-profit organizations and entities such as manufacturers and importers seeking IGST relief, exemption from health cess on imports made for items such as oxygen concentrators and other items which are essential for COVID-19 management. These representations and requests were taken into consideration by the Government of India, Ministry of Finance, Department of Revenue which enlisted certain items including Oxygen Concentrators vide Notification No. 28/2021–Customs dated 24.04.2021[viii] to be exempted from IGST relief, health cess on imports, etc. However, despite waiving off the Customs Duty, health cess on imports, the prices of these Oxygen Concentrators have not changed and they are yet being sold at exorbitant prices i.e., the benefit of such exemption has not been transferred to the end consumer. This creates a peculiar situation because the Government has done everything (mostly) to make sure that there are no impediments on the import or sale of certain medical devices but a step further in the right direction would be declaration under Essential Commodities Act.

There is another major issue due to lack of action on the part of the Government on the declaration of Medical devices as essential goods. Today, a victim of overcharging of Medical Devices has no other option but to consider the legal recourse available under Consumer Protection Act, 2019. The remedy is Civil in nature and becomes ineffective as Consumer Courts are not functional, and lodging online complaint and adjudication thereof will take time. In isolated instances, Police authorities were able to catch miscreants involved in overcharging, Black Marketeering, and Hoarding of certain drugs such as Remdesivir and Oxygen Concentrators. However, concerning oxygen Concentrators, they are not yet declared as an essential commodity. Furthermore, Remdesivir, a lifesaving drug, is controlled via DPCO, 2013, and the offenders can be penalized for hoarding, black marketeering and profiteering of essential commodities. But concerning medical devices, the authorities cannot charge the offenders on the ground of taking "undue advantage" in the regular course of business.

Moreover, Delhi Disaster Management Authority, GNCTD vide order dated 25/04/2021[ix] had come out with a list of directions that needed to be followed to curb hoarding, black marketeering and profiteering of lifesaving drugs and upon flouting of such directions, "the defaulting person(s) shall be proceeded against as per the provisions of section 51 to 60 of Disaster Management Act, 2005, Section 188 of IPC, The Epidemic Act, 1897, Drugs & Cosmetics Act, 1940 and Rules 1945 and other applicable laws." But again, the question is what exactly is the ambit of those lifesaving drugs? Unless explicitly specified, the executive authorities cannot include any and every drug/device within its ambit.

However, if an order regulating the Price is notified under Section 2A and 3 of the ECA, 1955 r/w Disaster Management Act, 2005 (hereinafter referred to as DMA), then the Legal framework provided under these Act can be used for the benefit of the Consumers. This will further create deterrence in the society, as a violation of an order under Section 3 can entail maximum punishment of up to 7 years, i.e., depending upon the facts and circumstances of the case and the order contravened. It is common knowledge that a product cannot be sold above MRP. However, the sellers can get away with charging exorbitant amounts by citing supply issues, but the reality is something else. Artificial demand is created by individuals, which eventually works for their benefit and can charge money five times over MRP. Pulse Oximeters are essential medical devices used to diagnose COVID-19 and are sold at around 1800- 3500/- on Amazon (Online shopping portal). Last year, the same Oximeters were being sold for 350-800. Anti-social elements have no regard for this unprecedented situation and see this as a golden opportunity to get rich. This grey area around pricing needs immediate redressal by the authorities as COVID-19 is here to stay, and we need a strict monitoring and regulatory price framework to ensure that people do not have to beg for such Essentials.

It is imperative to note that The Ministry of Chemicals and Fertilizers vide Office Memorandum dated 29th June 2020[x] stated that the "Maximum Retail Price" of Oxygen Concentrators and Pulse Oximeters cannot be increased more than 10% in a year and further directed, by exercising powers under Para 20 of DPCO 2013, the manufactures and importers of the abovementioned devices to submit the MRP within 10 Days. However, this direction has been blatantly disregarded and prices continue to rise.

It is pertinent to note that, vide order dated 8th May 2021 in the case of "State Govt of NCT Delhi v. Vinay Agarwal & Ors" Ld. Principal and District Sessions Judge (S.W.) Sh. Narottam Kausal set aside an order passed by Ld. M.M to provide 12 seized Oxygen Concentrators to be used by "Family and Personnel of Police Department". The Ld. Judge set aside the order as Oxygen Concentrators are not declared as an Essential Commodity and relying on High Court of Delhi in W.P. (C) No.-5073/2021 titled as "Venkateshwar Hospital Vs. Govt. of NCT & Ors.", vide its order dated 29.04.2021 directed that in case of seizure of Medicines/ Oxygen Cylinders, the same should be informed to the Concerned District Commissioner and the District Commissioner should proceed to pass orders for release of the same without any delay. The declaration of Oxygen Concentrators and Pulse Oximeters as Essential Commodities would further aid in releasing the Medical devices seized in raids to those who need them the most. These seized devices can end up saving someone's life. The system is overburdened, and it needs assistance; the framework under ECA will lend sufficient support to prevent Overcharging, Black marketeering, hoarding and using the seized goods to be put to better use.

A Division Bench of Allahabad High Court by an order dated04.05.2021[xi] in PIL No. 574 of 2020 In "Re Inhuman Condition At quarantine centers and for providing better treatment to corona positive" via a strongly worded order concerning deaths of COVID-19 patients dying due to lack of oxygen noted;

"We are at pain in observing that death of COVID-19 patients just for non-supplying of oxygen to the hospitals is a criminal act and not less than a genocide by those who have been entrusted the task to ensure continuous procurement and supply chain of the liquid medical oxygen."

The entire system is cognizant of this terrible situation. People are dying due to a lack of oxygen, and this should be a strict wake-up call to those in power. It is clear that we are in urgent need of alternatives to uphold the life and dignity of individuals as mandated by the Indian Constitution under Article 21. Article 21 is a comprehensive right and takes under its definition the right to health as an integral part of one's right, even though not explicit, it is an implied notion. Right to life does not only mean the right to health but also means the right to access affordable healthcare. The right to health is inherent to a life with dignity, and Article 21 should be read with Articles 38, 42, 43, and 47 to understand the nature of the state's obligation to ensure the effective realization of this right. It is clear that the state has a positive obligation to protect the health of the citizens and provide them with the requisite assistance to deal with this unprecedented pandemic.

Moreover, In Suo Motu Writ Petition (Civil) No.7 Of 2020 [Re: The Proper Treatment Of COVID-19 19 Patients And Dignified Handling Of Dead Bodies In The Hospitals Etc.], The Supreme Court Held That "Right to health is a fundamental right guaranteed under Article 21 of the Constitution of India. Right to health includes affordable treatment. Therefore, it is the duty upon the State to make provisions for affordable treatment and more provisions in the hospitals to be run by the State and/or local administration are made. It cannot be disputed that for whatever reasons the treatment has become costlier and it is not affordable to the common people at all. Even if one survives from COVID-19, many times financially and economically he is finished. Therefore, either more provisions are to be made by the State Government and the local administration or there shall be cap on the fees charged by the private hospitals, which can be in exercise of the powers under the Disaster Management Act." Thus, it is imperative that the prices of medical devices such oximeters and oxygen concentrators, either be fixed or regulated by the Respective authorities.



Nobody is immune from this virus, nobody. Social media is flooded with reports and incidents where a person could have been saved if there was oxygen. One can only imagine the plight of a person and his family, which is running from pillar to post to get a pulse oximeter and/or an Oxygen Concentrator and learning that humanity has reached a whole new low where everyone is trying to make an extra buck, but at what cost? The cost of life, lately, is roughly 1,50,000/- + GST (Oxygen Concentrator). This amount is directly proportional to the caseload. The Government needs to wake up to the horrors of reality and uphold its Constitutional duties of protecting Life and Liberty as mandated by Article 21. Unless notified, hoarding of medical devices such as Pulse Oximeters and Oxygen Concentrators cannot be considered an offence. The offenders or people hoarding non-notified medical devices are doing nothing but their business. Oxygen Concentrators are a viable alternative that patients can use in case of non-availability of the Oxygen Cylinders at Home or Hospitals. Unless notified, the alleged offenders will walk away scot-free. This can be strengthened by the bail order passed on 12th May 2021 by Ld. Chief Metropolitan Magistrate Sh. Arun Kumar Garg granted bail to 4 accused, including the Matrix CEO, arrested in Delhi Oxygen Concentrators Hoarding Case. The court rightly observed:

"You can't first penalize people and then make a law. Can you make them guilty of offences which no offence just to remain in good books? There is a vacuum. Just because of hiding your failures you can't run behind people. You can't create terror"

The court further orally remarked:

"There is no law and there is a vacuum, you don't want to create a law. You want to abrogate the responsibility. A businessman suddenly, I don't know about the credentials of the accused here, but every businessman sees such an opportunity. Just because you have to hide your faults, you cannot curtail Fundamental rights of other people[xii]."

Unless the Government steps in and notifies Medical Devices as Essential Commodities, businessmen will continue to use this "Golden Opportunity" to fill their coffers. Criminal Procedure cannot be used retrospectively to punish people. It is also imperative to note that the government is cognizant of the growing issue at hand, however the failure of the State to fix a price on such equipment may be taken advantage of to sell the same at exorbitant and unconscionable rate[xiii]. Moreover, it has been already declared that Medical oxygen is a drug and therefore an essential commodity, thus, when there is lack of supply of oxygen, either in the form of LMOs, oxygen cylinders or oxygen concentrators, thousands of COVID positive patients will die as a consequence, and this dearth is a gross transgression of right to life under Article 21.this can be avoided if devices such as oxygen concentrators, devices that are used when someone needs oxygen therapy, as their respiratory system fails to get enough oxygen just by breathing. These are devices that concentrate the oxygen from ambient air and will serve as a viable alternative to overcome the oxygen supply in the country.This same line of thought was observed by The Goa Bench of Bombay High Court on Wednesday while exhorting the State and other authorities to make all efforts to ensure Oxygen needs of the State are met[xiv].

In this connection, it is relevant to note that the Kerala Government recently fixed the prices of pulse oximeters, oxygen mask etc invoking the powers under the Kerala Essential Articles Control Act 1986.

It will be interesting to see how long it takes for the respective authorities to declare medical devices such as oxygen concentrators and oximeters as essential commodities and even if they are declared as essential commodities, will the authorities regulate their prices? An interesting answer left only for the government authorities to unfold.

(Sahil Rajan Siddiqui is an Advocate based in New Delhi and an Alumni Campus Law Centre, 2020. Sayali Sawant is an Advocate based in Mumbai, currently Pursuing LLM from Maharashtra National Law University, Aurangabad. Views are personal)


[ii] india-medical-devices-rules-2017.pdf (emergobyul.com) (Last visited on 12/5/2021 at 7:15 PM IST)

[v] Articles & Guides – Arogya Legal – The Health Laws Specialists ( Last visited on 12/5/2021 at 9:12 PM IST)

[vi] https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1609670 ( Last visited on 12/5/2021 at 8:15 PM IST)


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