Delhi HC exposes companies profiteering from COVID antibody test kits; ICMR cancels procurement order

27 April 2020
On 27 April, the centre cancelled an order to procure antibody test kits by a Chinese manufacturer, Wondfo. The previous day, a Delhi High Court judgment revealed that the procurement order by the Indian Council of Medical Research had allowed intermediary companies to inflate the costs for the test kits by nearly 145 percent.
Biplov Bhuyan / Hindustan Times / Getty Images
On 27 April, the centre cancelled an order to procure antibody test kits by a Chinese manufacturer, Wondfo. The previous day, a Delhi High Court judgment revealed that the procurement order by the Indian Council of Medical Research had allowed intermediary companies to inflate the costs for the test kits by nearly 145 percent.
Biplov Bhuyan / Hindustan Times / Getty Images

On 26 April, in what can only be described as inadvertent whistle-blowing, a dispute between three private companies over the distribution of antibody kits in India revealed that the centre had allowed the costs of COVID-19 antibody tests to be inflated by nearly 145 percent. In a judgment that favoured none of the companies, it was the Indian Council of Medical Research that suffered the most. The court disclosed that the ICMR offered to pay Rs 30 crore for five lakh test kits, at an inflated price that offered a profit of Rs 18.75 crore to the intermediary companies. As news of the judgment emerged the next day, the centre seemed to struggle to find a response, ultimately issuing a press release announcing that it had cancelled the procurement order for the test kits.

The antibody kits were manufactured by a Chinese company called Wondfo, and the day after the high court judgment, the ICMR issued an advisory to all state governments not to purchase kits from that manufacturer because it had led to inaccurate results. Meanwhile, in the press release issued that day, the central government stated, “It needs to be stressed that ICMR has not made any payment whatsoever in respect of these supplies.” It added that the Indian government “does not stand to lose a single rupee.” But neither the centre’s press release nor the ICMR’s advisory explained why the central government had placed such a large order, at highly inflated costs, for unreliable test kits in the first place.

The dispute arose when two distribution companies, Rare Metabolics Life Sciences and Aark Pharmaceuticals, filed a petition in the Delhi High Court against an importer, Matrix Labs, for not honouring a contract to supply antibody test kits. On 28 March, the ICMR had placed an order for five lakh antibody tests with Aark. The three companies had entered into an agreement through which Matrix would import the test kits, provide them to Rare Metabolics, which would then supply them to the ICMR through Aark Pharmaceuticals. According to the petition, Matrix delivered 2.76 lakh kits on 17 April, and threatened to not deliver the rest until Rare Metabolics paid the full amount in advance, prompting them to take the matter to court.

Vidya Krishnan is a global health reporter who works and lives in India. Her first book, Phantom Plague: How Tuberculosis Shaped History, was published in February 2022 by PublicAffairs.

Keywords: COVID-19 Delhi High Court Indian Council of Medical Research
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