The urgency of the health emergency in India should convince the government to use its discretionary powers under the Essential Commodities Act. It is the only way to stop the black-marketing and hoarding of pulse oxymeters and oxygen concentrators, and make them widely available and accessible to the public, writes ROHAN WADHWA.
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A large number of Covid-19 patients have created a huge and sudden demand for medical devices such as oxygen concentrators and pulse oximeters. It has caused an acute shortage of this equipment essential in treating and monitoring the health of Covid-19 patients.
The situation is exacerbated by hoarding, black-marketing and selling oxygen concentrators and pulse-oximeters at exorbitantly high prices.
The central government, through multiple notifications and office memorandums, has created a preliminary legal framework to bring such devices under the purview of the Essential Commodities Act 1955 (ECA).
In the wake of the pandemic, the government used its discretionary power under the ECA to declare face masks and hand sanitisers as essential commodities for a temporary period.
Later, it removed them from the ECA, once there was an adequate supply for them at fair prices. It has still not used any discretionary power to notify these medical devices under the ECA, even as a temporary measure.
Government inaction has created a legal lacuna during the second wave. Now defence counsels have been arguing in courts that the offence of black-marketing cannot exist for pulse oxymeters and oxygen concentrators since no maximum price is fixed for them.
The ECA seeks to control the production, supply, and equitable distribution of certain essential commodities at fair prices in the public interest. Section 2A of the Act defines “essential commodities” as those specified in its schedule. The first entry in the schedule is “drugs”, as defined in clause (b) of section 3 of the Drugs and Cosmetics (DCA) Act, 1940. Clause (b)(iv) of the DCA says some medical devices are drugs if they help prevent, mitigate and treat a disease when they are externally or internally applied on the human body or to an animal.
Also read: Who is Navneet Kalra, who’s been accused of ‘black marketing’ oxygen concentrators?
The scope of medical devices under this section of the DCA was expanded in February 2020 through a notification from the Ministry of Health and Family Welfare. It then included medical devices that help diagnose, prevent, monitor, treat or alleviate any disease, disorder, injury or disability; investigate, replace, modify or support the anatomy or a physiological process; support or sustain life; disinfect medical devices; and control conception.
The effect is that oxygen concentrators and pulse oximeters can come under the ambit of section 3, clause (b)(iv) as drugs under the DCA.
The Ministry of Health and Family welfare, to regulate medical devices, enacted the Medical Devices Rules 2017. These rules provide for a license to manufacturers and importers of medical devices based on risk assessments and efficiency. In February 2020, the Ministry of Health added chapter IIIA in the Medical Devices Rules, 2017, through a notification. It specifically regulates manufacturers and importers of medical devices, whose scope was expanded under the DCA under the previous notification.
A series of government notifications prove that it anticipated the need for a wider scope to manufacture and import medical devices to bring more essential medical devices to the Indian market.
Further, the National Pharmaceutical Pricing Authority (NPPA), through another notification dated 31 March 2020, said that all “medical devices shall be governed under the provisions of Drugs (Prices Control) Order 2013.” In other words, the medical devices shall be governed by the government as drugs, and no manufacturer or importer is allowed to raise their MRP by more than ten percent. It was confirmed by the NPPA via an office Memorandum on 29 June 2020.
All these notifications make it clear that the Centre had foreseen the widespread need for a wide range of medical devices in the fight against Covid-19.
The need of the hour is to categorically declare that medical devices are essential commodities. Section 2A subsection (2) of the ECA says that the central government can add or remove commodities from the list of essential goods in the public interest.
Section 3 of the ECA says the central government can control the production, supply and distribution of essential commodities. Section 3(c) says the government is empowered to control the prices of “any essential commodity”. Section 3(e) says the government can prohibit any ordinarily-sold essential commodity from hoarding.
Section 3(f) empowers the Centre to pass orders to anybody holding (or likely to hold) stocks of an essential commodity and ask them to sell all or some of it to a government authority or corporation under government control. Section 7 provides penalties, including a fine or imprisonment not less than three months and up to seven years, for hoarders.
The government took temporary measures when it placed face masks and sanitisers under the ECA. A similar step should be taken for these two medical devices, considering the appalling situation.
The steps the government has taken so far are inadequate to prevent the hoarding of medical devices. Since no prices have been fixed for them, manufacturers are routinely demanding exorbitantly high payments. The Supreme Court held in Prag Ice and Oil Mills and Another vs Union of India and Nav Bharat Oil Mills and Another vs Union of India that a government order to fix the price of an essential commodity has to be presumed constitutionally valid.
A public interest test is enshrined in section 3 of the ECA itself and it is to be used to ensure the availability of an essential commodity at fair prices. Such orders have to keep consumer interest in mind, and there must be a nexus between the order and the object of the legislation.
The Kerala government recently passed an order under the Kerala Essential Article Control Act, 1986, to fix the price of pulse oximeters. The Delhi High Court said recently, “It is high time, the MRPs of not only oxygen concentrators but all other equipment requires for treatment of COVID for which there is much demand today, should be fixed so that malpractices immediately stop.”
Owing to the urgency and prevailing health emergency in India government should certainly use its discretionary powers.
(Rohan Wadhwa graduated from the OP Jindal University and is a lawyer. He has a keen interest in Litigation and Intellectual Property Law. The views expressed are personal.)
