Amazon and Flipkart found violating Competition law in India-DG investigation report out
I was invited to participate in a Live panel discussion on NEWSX TV channel in their weekly program “LEGALLY SPEAKING “, which was telecast live on 11th May 2021 at 10.30 to 11.00 PM on the topic “HOSPITAL BILLS AND INSURANCE COMPANIES- PATIENTS CAUGHT IN BETWEEN “. I was joined with four other lawyers to discuss the ongoing grim situation during the ongoing COVID-19 situation in general and the high medical bills of the hospitals and the instances of the Insurance companies not clearing the claims of COVID treatment or the hospitals asking for payment despite “Cash less” Mediclaim insurance policies and the Insurance Regulator , the IRDAI issuing directions to Insurance companies to ensure expeditious settlement of claims of COVID patients and even the Delhi High Court issuing directions on a PIL to hospitals etc. The discussants mostly highlighted the one-sided clauses of the Mediclaim policy documents, hospitals charging exorbitant amounts for the treatments during COVID-19, under coverage of large population by insurance cover, huge profits made by critical service providers such as ambulance drivers etc. from COVID patients etc. You may like to view the YouTube video of the panel discussion here.
As you would notice that I made some suggestions for the long-term solutions, such as urgent need for a national health policy , on the pattern of the National Education Policy to resolve the emerging urgent issues at macro level , which I could not elaborate due to paucity of time.
I would like to expand my suggestions made and also add a few thoughts on the current situation, which needs to be seen from socio economic perspectives. A caveat, I am no expert about healthcare and my views emanate from whatever little knowledge I have acquired so far in advising some large pharmaceutical companies on competition issues.
During the second wave commencing from 19 April, there has been a sudden surge in demand for all essential life saving drugs and related facilities such as hospital beds, Oxygen cylinders, Oxygen concentrators, BiPAP machines, Ventilators etc. Due to the growing contagious nature of the Indian variant of the SARS-Corona Virus leading to growing number of serious patients with co morbidities etc. suddenly the hospitals have become full and short of beds forcing most patients to remain in home quarantines and get treated at home. This has also resulted in mass scale casualties which has also brought a sudden increase of demand for ambulances with Oxygen support en-route as well as excess load on crematorium for last rites of the dead bodies. This is an unprecedented and dystopia like situation making the common man and even the VIPs helpless. Unfortunately, those in the government have also been caught napping and failed to anticipate such mass scale spread of pandemic.
Can we blame those exploiting the situation to make excessive profits in the absence of adequate regulatory framework?? Is it not a case of excessive demand producing huge opportunities for those in the related businesses? As per the law of demand and supply, increase in demand always results in increase in prices and more suppliers entering the market to fill in the gap. The competition works “in reverse” to the detriment of the consumers, that is, more suppliers compete to make more and more profits due to ever increasing demand. This is because the demand of pharmaceutical and health related products and services is “inelastic” i.e., it does not reduce on increase in price, the situation is ideal for those in related businesses to rake in the mullah! In the absence of suitable laws or government orders issued under the applicable laws to impose maximum prices, it is left for the higher judiciary to issue directions on populistic PILs filed and trying to intervene in the implementation or promulgation of orders due to neglect or omissions of the Executive.
For instance, unlike the case of certain drugs declared essential with their prices capped by the National Pharmaceutical Pricing Authority (NPPA) by including them in the National List of Essential Medicines (NLEM) under the Drug Price Control Order (DPCO) ( promulgated under the Essential Commodities Act ,1955) till date there is no maximum price cap prescribed by the NPPA on some COVID related medicines such as Remdesivir or on Oxygen cylinders or on Oxygen concentrators or BiPAP etc. , which has been used by unscrupulous elements in indulging in selling these at exorbitant prices in the black market !
Similarly, there are still no maximum caps prescribed on prices to be charged by the hospitals on COVID related essential services such as ventilators and other life support hospital services. This is because such essential life saving services have not been included in the Essential Services Maintenance Act, 1968, which, though includes “health services”, but has been used mainly to ban strikes, lockouts and layoffs etc in such services declared as essential. Why can’t the govt use this Act to impose price caps on the essential COVID related hospital services?
These are extraordinary times require extraordinary and urgent steps by both the Central and State Governments. Please note that public health is included in the State List and each State Government is primarily responsible for ensuring the health of its citizens.
In my view, therefore, the following legal and policy initiatives may be considered as long- term solution on urgent basis-
- Declare the current pandemic as a National Health Emergency without waiting for the spread of the Virus in the rural India, at least, initially for a period of six months, in exercise of its powers under the Epidemic Diseases Act, 1897 and the National Disaster Management Act, 2005. Please note that the during the first wave of COVID -19, the all-India lockdown was imposed under the same powers.
- Use the above powers to take over all the public and private hospitals declared as COVID hospitals and prescribe maximum charges on treatment of COVID patients, by the private hospitals as well as prescribing maximum prices for sale of life saving facilities such as Oxygen cylinders, Oxygen concentrators, BiPAP etc.
- Amend the DPCO to include all medicines necessary for treatment of COVID-19 as “essential” medicines, if not already included and bring them under the NELM and prescribe maximum prices for each. For instance, currently Remdesivir is not included under NLEM Currently, maximum prices of 856 essential drugs are prescribed by the NPPA.
- Divert the focus of the current National Health Mission and upgrade it towards the prevention of communicable disease including COVID-19.
I am sure that if the above measures are considered by the governments, we can tackle the third or any subsequent wave of COVID-19
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