Oxygen crisis and the law: Life bottled in a cylinder?

Apart from the fact that oxygen is essential for human existence, it is also recorded to have wide applications across industries, including in the production of iron and steel, plastics, and textiles, in the aviation industry, for medical therapy and in life support systems. Medical oxygen has been recently classified as a ‘drug’ under the Drugs and Cosmetics Act, 1940 (DCA) – in State of Andhra Pradesh v. M/s Linde India Ltd. – making it the primary legislation regulating the production of medical oxygen.

A shortage in the supply of medical oxygen is not typically a problem within the medical infrastructure of India’s hospitals and nursing homes. According to news reports, the demand for medical oxygen in India was ~700 tonne per day before the pandemic, and this demand rose steeply, to ~2800 tonnes per day, during the first wave of COVID-19. The gap between supply and demand has only been exacerbated during the ongoing second wave. A single patient who is prescribed high flow nasal cannula (HFNC) therapy uses over 86 tonnes of oxygen per day. As per DCA, a manufacturing licence is required to manufacture drugs for sale or distribution in India; this licence would need to be procured for producing medical oxygen as well.

A worsening situation on the ground – including a grave shortage in the supply of medical-grade oxygen – prompted the Central Drugs Standard Control Organization (CDSCO) to allow manufacturers of industrial oxygen to manufacture oxygen for medical use by procuring the required permission via a ‘fast-track’ route, in early April last year. Meaning, an establishment having the facilities to manufacture industrial grade oxygen may be granted a manufacturing licence (under form 24) to manufacture medical grade oxygen within 24 hours of applying for the same, to the respective drug controllers under the DCA.

In addition to manufacturing, the Gas Cylinder Rules, 2016 (GCR) imposed certain restrictions on the refilling of gas cylinders. In light of the pandemic, the Petroleum and Explosives Safety Organisation (PESO) issued a set of standard operating procedures in April 2020 for the conversion of industrial oxygen cylinders and inert gas cylinders (nitrogen, argon and helium only) to medical oxygen cylinders, to help manage the demand for medical-grade oxygen. Additionally, under the DCA , a license under form 20B would have to be obtained to sell, stock or distribute such medical-grade oxygen (if as a wholesaler).

In order to effectively combat the second wave, the government has taken a few steps further, this year. By a letter dated 18th April, 2021, the Home Secretary restricted the supply of liquid oxygen for industrial use, barring all industries from producing oxygen (except nine exempted industries) and diverting all liquid oxygen supplies for medical purposes only. Further, by a letter on 22nd April, 2021, the central government has issued a notification to state governments under the Disaster Management Act 2005, directing them to ensure the uninterrupted transportation of medical oxygen across state lines in this critical hour of need.

As of 24th April, 2021, the reported production capacity of domestic industries increased to~9,103 tonnes of oxygen per day, including industrial-grade oxygen. Given that 10 per cent of active cases – now approximately 31 lakh active cases – require medical-grade oxygen, there is a major shortfall in the supply of oxygen in comparison to the demand. With COVID cases surging to new highs daily, as the pandemic’s second wave rages in India, the demand for liquid oxygen has gone up exponentially, in recent weeks.

The hurdles faced by manufacturers involved in the production of medical-grade oxygen include being regulated by the Ministry of Health which lays down detailed testing and manufacturing requirements, making the whole process time-consuming and cumbersome. These include passing an inspection of the manufacturing premises and ensuring internal pressure and numerous other technical requirements for the cylinder are met. Further, as detailed above, the gas cylinders used for supplying and storing such oxygen are separately regulated and need to comply with the GCR. A licence in Form E or Form F of Schedule V of the GCR is mandatory for the filling or storage of compressed gases. The requirements to be followed by manufacturers of such cylinders further include intricate compliances such as maintaining the internal pressure of the cylinders, labelling cylinders with the name of the gas (as well as the name and address of the person by whom the cylinder was filled), ensuring that the cylinder is painted with appropriate identification colours (white shoulder and black body, in case of oxygen cylinders), etc. which makes the overall process quite elaborate and lengthy. Lastly, it is important to follow good manufacturing practices besides abiding by the provisions of the DCA and GCR.

Most recently, a wing of the Ministry of Defence, the Defence Research and Development Organisation (DRDO) has published an official statement on 28th April, 2021 to meet the shortfall in the supply of medical oxygen for COVID patients. According to the statement, the DRDO has decided to set up 500 Medical Oxygen Plants (MOPs) across India within three months. These plants will be installed under the PM CARES fund and will comply with international standards like ISO 1008, European, US and Indian Pharmacopeia. The DRDO has further stated that using these MOPs, hospitals will be able to generate medical oxygen on-site, in a cost-effective manner, rather than being dependent on sourcing it from other places. The MOP scheme is a step in the right direction, making our healthcare infrastructure resilient for future emergencies as well, but given the scenes on news and in hospitals, we must ask the question – is it too little too late?

(The authors work with the corporate practice group at Spice Route Legal, with a focus on life sciences, healthcare and pharmaceuticals)