Is RT-PCR test highly overpriced in Kerala?

Photo courtesy - https://www.worldometers.info/coronavirus/

When I enquired about pricing of RT-PCR test at a lab in one of the famous hospitals in northern Kerala (2021 Feb), they told it will cost 1700/test. Couple of months before that, one of my colleagues did the same test in Rajasthan at 800; recently another one did the test in Bangalore at 800.

Price of RT-PCR test varies significantly across India. Lately, a lot of states capped the price somewhere in between 800-1000. Let us see the rates at some places.

As per reports, Mumbai airport offers the test at 600. 

Spice jet offers RT-PCR test at a discount rate of 299 to their passengers and at 499 for public from March 11, 2021. 

Apollo Diagnostics and most private labs in Bangalore offers the test at 800. If its home collection, then the price is slightly higher. At first Karnataka state government capped the test at 1200; later it was reduced to 800. RT-PCR test at 800, TrueNat at1250, CBNAAT at2400, Rapid antigen at 400, and Rapid antibody at 500 from 2020 December.

Maharashtra, on April 1, the government cut the prices of RT-PCR tests for the sixth time. New rates are 500 for submission of samples at the collection center; 600 for the same test at a COVID Care Centre or a quarantine center; 800 to collect the swab from home – The Mint.

Delhi, last November, government fixed the price at 800. For home collection price was fixed at 1200.

In Uttar Pradesh, RT-PCR test at government hospitals is fixed at 600. In 2021 September, government reduced the cost of RT-PCR test in all laboratories from 2500 to 1600. Currently, price of RT-PCR tests has been fixed at 700 in all the private hospitals. Private labs can charge 900 if the sample is collected from home.

In Gujarat, on April 19, government reduced the charges from 800 to 700. For home collection rate were reduced from 1100 to 900.

Odisha, in 2020 August, government had slashed RT-PCR test price to 1200 from 2200. In 2020 December maximum price that can be charged by private laboratories were further reduced to 400. 

Uttarakhand government on last November revised RT-PCR price cap in government and private laboratories to 850 and 900, respectively.

Telangana government slashed the prices of RT-PCR tests in private labs from 2200 to 850. For collecting a sample from home, it is 1200.

Kerala

Kerala government earlier (last year) fixed the price at 4500; then it was reduced to 2750. Rate was further reduced to 2100 in September last year. Later government tried to reduce it to 1500. This time private labs took the government to Kerala high court and price was fixed at 1700 (private labs demanded 2000/test in the court). 

What I do not understand is, when price was slashed in other states by respective state governments, private labs were not shut down or stopped testing. For e.g., in Karnataka, for many months the rate is 800/test. Numerous private labs are still doing the testing. As you understand these labs are not charities. They will not continue with testing, if they are making losses. Remember, SpiceJet is offering tests for public at 499. How this is possible? It is true that there are different types of test and cost for conducting the tests may vary from place to place. 

How come private labs in many states are doing tests at 500 or 800; and in Kerala they are charging 1700 or above? Equipment’s will be coming under GST, which cost the same (there may be slight differences) across India. There are no state specific changes required for equipment used in RT-PCR. Similarly, its no that in Kerala only 2-3 people have covid and hence required testing. Hence the volume argument also does not stay. It is possible that salary and other expenditure may be higher in Kerala; but will it result in double charges?

Labs in Kerala argue that, reagent cost around 300-600. Then PPE, extraction of protein, home collection, sanitation expenses etc. costs more. In addition to that, labs need specialists in pathology and microbiology. They also need to store positive sample at minus 80 degree Celsius. Hs to pay the power bill also. They also cite, huge capital expenditure for PCR machines (10-19 lakh) and RNA extraction machine (6-10 lakh). But the same cost might be there in Bangalore, Mumbai, or Delhi. Its not that only the labs in Kerala must pay the power bill.

As per reports, some lab officials concede that, they are making 30-40% profits at 1700 INR/ test excluding capital expenditure. 

“Anywhere between Rs 800 to Rs 1,000 would have been viable,”

“There are 96 wells (small depressions) in a plate kept in the PCR machine. “Ideally, only one sample should be kept in a well. But labs mix two to 10 samples in one well and run the test,” he said. If there is no positive, the labs save around Rs 400. But if one well throws up a positive result, they will have to do an independent test on all the 10 samples. “Some labs will ignore such results and declare all as negative or do antigen tests on the 10 samples to save money,” he said. An antigen test kit costs only Rs 100.” - New Indian Express

If the cost is less than half in other states; then why these tests cost 1700 until recently in Kerala? Why they resist recent price reduction?

Sajeev