COVID-19 Tests : Kerala High Court Directs Govt To Consider Private Labs' Objections Against Price Cap

The Kerala High Court has directed the Kerala Government to consider the grievances of private laboratories against the November order which capped the price of COVID-19 tests as Rs 1500(R Cell Diagnostic and Research Centre and others v State of Kerala and others).

A single bench of Justice PV Asha directed the Government to take a decision within 3 weeks from the date of receipt of the judgment. Till then, the Court allowed the labs to charge up to Rs 2100 for COVID-19 tests, as has been fixed by a government order issued in October 2020.

The petitioners, a group of seven laboratories, challenged the slashing of price as unreasonable.They submitted that here are six types of tests and the expenditure being incurred by petitioners to maintain quality standards is more than the cost now fixed. The petitioners also relied on the Supreme Court order in Shashank Deo v Union of India which allowed private labs to charge as per ICMR fixed rates and restricted the coverage of free test to economically weaker groups. The ICMR has capped the rates as Rs 4500. Therefore, the contention of the petitioners was that the State Government has no authority to reduce the maximum charges further.

Advocate Paul Jacob, appearing for the petitioners, submitted that the order was passed without giving an opportunity of hearing for the affected parties.

The State submitted that the rate was re-fixed after considering various factors including cost of re-agents and kits required for the test and the rates prevailing in other States. It was argued that the costs of kits were higher during the initial days of the pandemic on account of the lockdown as they had to be imported but now that they are being locally manufactured, higher rates are not justifiable.

The Additional Advocate General Renjith Thampan submitted that the common man is benefited by the revision and reduction of rates and more and more persons are approaching private labs for the tests though the tests in Government hospitals and laboratories are done free of cost. It is stated 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 High Court observed that the contentions raised by the petitioners "require consideration by the Government as admittedly,their views are not ascertained before fixing/reducing the rate of charges from Rs.2,100/- to Rs.1,500/-" .The Court also noted that before passing the price fixing order in July- which capped the price for RTPCR tests as Rs 2750 -  the Government had taken the views of the private labs.

Click here to read/download order