Free coronavirus tests unviable for private labs: Kiran Mazumdar-Shaw

KEY HIGHLIGHTS:

• Existing testing charges are already fixed by the government
• Private labs need to pay upfront to build inventory of testing kits  
• Fall in routine tests have hit revenues and cashflow
• Free testing may force them to downsize, hurting many livelihoods
• Patients may get insurance companies to reimburse testing charges
• Govt reimbursement not viable as labs need money to meet current expenses

At a time when the Indian Council of Medical Research (ICMR) is inviting applications from all government and private medical colleges for establishing a COVID-19 testing facility, the Supreme Court has asked the government to facilitate free testing by the 65 private laboratories. "The whole purpose behind including private laboratories was to augment testing capacity. They have already been told to conduct tests at government-specified rates. Expecting them to do it for free will be challenging for the laboratories, especially in the current economic scenario," says Kiran Mazumdar-Shaw, chairperson and managing director of  Biocon, the largest Indian bio pharmaceutical company.

Private laboratories employ a large number of people whose livelihoods are tied to the viability of the laboratories, she says. "Any move that makes them to downsize is the last thing that anyone will want in the current economic crisis." Besides, private laboratories have been saying that their revenues are depleting and cashflow is affected due to other routine tests having sharply declined.

They also have to build inventories of kits, Shaw says, which they cannot do on credit. "There is no reason why any people who could travel abroad is not in a position to pay the fixed price of Rs 4,500 for the test. Alternatively, if they are not in a position to pay, they can get their insurance companies to pay for it, she says.

What if private laboratories offer the tests for free and the government reimburses it? "This can only happen over a period of time and the issue before the laboratories is to fund current expenses, which include running the current operations, paying staff and building the testing kit inventory," says Shaw.

What if private laboratories offer the tests for free and the government reimburses it? "This can only happen over a period of time and the issue before the laboratories is to fund current expenses, which include running the current operations, paying staff and building the testing kit inventory," says Shaw.

In fact, one of the doctors at a private laboratory said that they are really confused and may put on hold more tests until clarity emerges. No laboratory, he points out, can afford to do thousands of tests for free. Besides, a travel cost is also involved along with the kit cost as not many technicians are willing to go and collect the samples. Also, now all hospitals are asking patients slated for regular operations to also go in for coronavirus testing.

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