By Bizodisha Bureau, Bhubaneswar, December 5, 2020: The Odisha government has set an example for other states to ensure affordable cost for RT-PCR test in private laboratories.

It has capped the price of RT-PCR test in private laboratories at Rs 400, the lowest in the country. Currently most of the RT-PCR tests are priced anywhere between Rs 900 – Rs 1800. The price of RT-PCR test at private laboratories and hospitals which was initially pegged at Rs 4,500 by government owned Indian Councill of Medical research (ICMR), has crashed by 10 times.

Though Odisha is not a major market, but its decision has impacted the stocks of diagnostic companies. Shares of Metropolis and Dr Lal Pathlabs dropped 6.44 percent and 2.38 percent respectively, on anticipation that other states may follow suit.

Besides, the price gap between RT-PCR and rapid antigen tests have significantly narrowed. RT-PCR (Real-time reverse transcription polymerase chain reaction) kits are considered the gold standard for COVID-19 tests due to its high sensitivity, compared to the rapid antigen tests that throw more false results.

India has the second-highest COVID-19 cases in the world, with 96 million confirmed cases, and with 0.4 million active cases, as on December 5. The cumulative total samples tested by India, as on December 5, is 145.9 million. India has the domestic capacity to produce over 1 billion RT-PCR test kits.

From just a few thousand tests in March-April, India now conducts more than 1 million tests per day. About one-third of these tests are done with RT-PCR kits, and the remaining are rapid antigen tests.

Now, there are about 100 companies, both domestic and overseas, small and big, competing to supply RT-PCR test kits as India ramps up testing for COVID-19, leading to a price war.

This also coincided with the expansion of capacities undertaken by global raw material suppliers of enzymes and reagents that go into the manufacture of the test kits.

The RT-PCR test kit component used to be 50 percent of the total cost of RT-PCR testing. Now it has dropped to less than 10 percent.

However, there was a lag of a few months, when the diagnostic labs didn’t pass the full benefit of reduced RT-PCR test kit prices. This helped diagnostic chains to wriggle out of the revenue loss in non-COVID-19 testing, and post decent enough profits.

Now with governments catching up with price caps, diagnostic companies will have to settle for lesser margins, but it shouldn’t be a problem as the non-COVID-19 testing is back to normal.