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NPPA brings LMO under price control for next six months through a notification to ensure its availability for COVID-19 management

Our Bureau, Mumbai
Monday, September 28, 2020, 12:10 Hrs  [IST]

Amid reports of shortage and hoarding of oxygen, National Pharmaceutical Pricing Authority (NPPA) has brought liquid medical oxygen (LMO) under price control for next six months. As per sources, demand for medical oxygen has gone up almost four times, from 750 MT per day to 2800 MT in the wake of the pandemic.

As per the notification issued by the National Pharmaceutical Pricing Authority, medical oxygen’s price has been fixed at Rs. 15.22 per cubic meter (exclusive of GST) at manufactures’ end and its price at fillers’ end has been fixed at Rs. 25.71 per cubic meter, subject to transportation cost fixation at state level.

The decision of price control was being taken by the NPPA following the recommendations of an expert committee and the union health ministry under the Disaster Management Act (DMA), 2005 given the extraordinary circumstances.

Due to excess demand, delivery through cylinders has increased from 11% pre-COVID to 50% of current oxygen supply. It is therefore imperative to cap the price of LMO to ensure uninterrupted availability of medical oxygen through cylinders to the hospitals and consumers.

The existing rate contracts of state governments for oxygen purchase will continue in consumers’ interest and the ex-factory price cap of LMO and oxygen gas cylinders will be applicable only to domestic production.

“These measures will ensure availability of medical oxygen at reasonable price both at hospital level and through oxygen cylinders, especially to distant and interior districts,” said NPPA.

The Central government has put the onus on state governments to ensure oxygen availability for needy patients.

“In order to meet the enhanced requirement, medical oxygen is being supplied to remote areas of the country after incurring additional cost on transportation. Due to on-going pandemic of COVID-19, these extraordinary situations have caused strain at all levels in the value chain of production and supply, especially for distant and interior districts based on terrain and distance. And whereas, medical oxygen is not only an essential life -saving drug but critical for COVID management,” the notification further stated.

All the clinical protocols world over recognize the role of medical oxygen as an essential medical therapy in clinical management of moderate and severe cases of COVID-19. Medical oxygen is not only required for managing the patients of COVID-19 but also for the management of other health emergencies due to non-COVID causes as well as for elective surgeries and other essential health services. Therefore, ensuring adequate supplies of medical oxygen is an absolute necessity to save human lives.

In view of the COVID-19 pandemic, states/UTs have been advised by the union health ministry to strengthen the hospital infrastructure accordingly by creating required numbers of oxygen supported beds and ICU beds. All of these beds will require uninterrupted supply of medical oxygen through medical oxygen cylinders and LMO tanks. Without ensuring availability of oxygen, the dedicated COVID health centers and COVID hospitals can not admit or manage the COVID-19 patients.

Therefore, medical oxygen is an essential public health commodity and its uninterrupted availability needs to be ensured. It is informed that due to the increase in price of LMO being supplied to filler, the margins for them have been squeezed and are impacting their operational viability.


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