Monday, August 10, 2020

The Oxygen Cartel

Sub-Saharan hospitals are dependent on costly oxygen from multinational suppliers. As Covid-19 spreads, doctors are being forced to make terrible choices. One nurse in Ouagadougou, Burkina Faso, says that in her hospital doctors frequently have to choose who receives oxygen and who does not.

A potentially deadly lack of oxygen is leaving doctors unable to offer essential treatment. Some experts put considerable blame on two multinational gas suppliers that dominate the market for oxygen cylinders across much of the continent, saying that their high prices and systems make the treatment unaffordable.
Ex-employees, industry insiders and hospital staff point to the processes and prices Linde Group and Air Liquide have for medical oxygen and say they are leaving hospitals struggling for supplies.
In European and US hospitals, liquid oxygen is delivered by tanker, stored in tanks, converted to gas and piped directly to bedsides. But for nations without this infrastructure, cylinders have to be bought in. As a result oxygen in sub-Saharan Africa is around to five times more expensive by volume, according to an investigation by the Bureau of Investigative Journalism (BIJ)
 The price of a 6.8-cubic metre cylinder of oxygen (a “J” cylinder), enough to treat an adult for roughly a day, ranges from $112 in Guinea, including transport, to $23 in Kenya. Additional costs can include a cylinder deposit fee of about $300, a monthly cylinder rental fee of about $25, and paying to transport cylinders to the gas company’s depot. As some big hospitals need up to 80 cylinders a day, the costs quickly spiral.
Globally the Linde Group and Air Liquide made revenues of $28bn and $24.5bn respectively in 2019. Ex-employees and analysts suggest some gas companies have likely made profit margins of between 45% and 88% on medical oxygen.
Oxygen is the key treatment that patients with the virus are taken into hospital for and is used when weaning patients off ventilator support. As lungs become damaged, blood oxygen levels can drop alarmingly, a condition called hypoxaemia, which can be fatal.
14% of Covid patients will need oxygen in hospital and 5% mechanical ventilation in intensive care. Across countries including Nigeria, Kenya, Burkina Faso, Guinea, South Africa, South Sudan, Cameroon, Ethiopia and Tanzania, many hospitals and dedicated Covid-19 isolation centres have oxygen shortages.
Air Liquide – which does not operate in Kenya – has charged up to a third more for medical oxygen than industrial oxygen. According to the BIJ, both come from the same gas plant; BOC/Afrox has charged up to seven times more for its medical oxygen. 
One former gas company employee  complained about the big price difference between medical and industrial oxygen.
“There’s no justification for it one way or another,” they say. “The Covid-19 crisis highlights the need for governments to treat medical gases as strategic and not be at the mercy of foreign owned suppliers.”
The chronic shortage of oxygen across Africa affects more than Covid cases. In 2018, almost half a million children died of bacterial pneumonia in sub-Saharan Africa. Better access to oxygen and antibiotics could reduce that number. Studies from Malawi and Nigeria show that fewer than a third of adults and children who needed oxygen actually got it.
Trevor Duke, director of the Centre for International Child Health at Australia’s University of Melbourne, found that improving access to oxygen reduced early deaths in children by 35%.
And hospitals cannot simply shop around for a better deal if their oxygen supply is too expensive. “There are many countries with a gas company monopoly,” Duke said. “In some countries,” he added, “the oxygen bill is the largest single drug purchase by ministries of health.”
For children with pneumonia in Nigeria, oxygen accounted for half the cost of an admission, says Dr Hamish Graham, a consultant paediatrician who researched improving oxygen access. “Oxygen was a really big driving force of catastrophic health expenditure for those families.”
“These prices are completely beyond the reach of most public hospitals across sub-Saharan Africa,” Leith Greenslade, an activist from the Every Breath Counts coalition, says, “which is why the hospitals have been passing the cost on to patients.
“You can imagine how desperate that situation can be for a family, when they have just put a family member in hospital and they have had to find the oxygen to help keep them alive and come up with these huge, huge amounts of money.”
Air Liquide has faced criticism in the past. In 2002, the European commission fined them and five other gas companies for participating in a medical and industrial gases cartel in the Netherlands, which prompted other investigations across Europe. The companies held regular meetings to fix prices between 1993 and 1997.  etween 2001 and 2011, Air Liquide and Praxair – which later merged with the Linde Group – were investigated for perceived cartel-like behaviour in a series of cases in Latin America. The Argentinian competition authority fined Air Liquide, Praxair and two other companies $24.3m in 2005 for price fixing and allocating customers. Praxair and two other companies were fined $8m in 2010 for bid-rigging in Peru. The Linde Group’s subsidiary Afrox is currently being investigated by the South Africa Competition Commission for concerns over alleged price-fixing over liquid petroleum gas cylinder rental schemes.
Maria Teresa Da Piedade Moreira, of the United Nations Conference on Trade and Development, says “It’s one of those sectors where the investments to enter the market are so high that you will never have a competitive market.”
It is “completely wrong” that gas companies can use cylinders to seek to tie hospitals to their product, because they cannot always deliver all the oxygen a hospital needs, says Temie Giwa-Tubosun, founder of LifeBank, a business enterprise in Nigeria working with hospitals. After seeing a news story about a man who died after being sent to five different hospitals, none of which had oxygen, she set up AirBank, to distribute free emergency oxygen cylinders to Nigerian hospitals, a project funded by corporate donations. “By tying hospitals to this one system you’re actually putting people at risk,” she says.

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