Tata Memorial Hospital has decided to reimburse cancer patients who were overcharged for a Novartis-branded oncology medicine over the last nine months.
The hospital admitted to overcharging at its two pharmacies (one each in the main building and the Homi Bhabha block). The hospital administration said in an email that there has been a "collective failure".
The price discrepancy at Tata Memorial pharmacies was first reported by dna on November 5, 2014.
Till fourth quarter (Oct-Dec) of 2013, the oncology medicine, Sandostatin LAR, carried a maximum retail price of Rs 65,499 for a 20mg vial (injection). It was being sold by Tata Memorial for Rs 48,296 – that is at discount of 26%.
However, even when Novartis revised the price to Rs 32,000 during Oct-Dec 2013, Tata Memorial continued to sell it at Rs 48,296.
The question is even while chemists in the hospital's vicinity were selling the same vial for Rs 32,000, how did Tata Memorial miss the revision?
"We have decided to reimburse the difference in price to our patients and the same will be recovered from the company as a credit note. M/s Novartis has also agreed to compensate us to the extent of revision," said Narayan HKV, medical superintendent, in the email.
Narayan said Tata Memorial has sold seven vials of Sandostatin 20mg to four patients, after Novartis revised the price.
The four are likely to receive Rs 1,33,000, collectively, for seven injections they were overcharged for. The figure is based on the fact that new stock of Sandostatin LAR 20mg will be sold by Tata Memorial at around Rs 29,000, after its discount to the new price of Rs 32,000.
Patients could have saved much more if the hospital had prescribed an Octreotide generic of the same strength, instead of Sandostatin LAR 20mg.
For instance, Octride Depot 20mg by Sun Pharma costs Rs 17,800 and is sold at Tata Memorial for Rs 12,157.
This means, four vials of the generic could be bought for the price of one vial of Sandostatin. Since patients have to take multiple injections, the generic Octreotide would save a great deal of money.
Though dna sought the names of patients who were overcharged, Tata Memorial didn't share the details.
After dna reported about the disparity, the hospital administration started investigations internally as well as with the Indian unit of the Swiss drug maker and their stockist (Om Sai Surgicals).
While the hospital did not disclose as to how the discrepancy occurred, Narayan said in the email: "There has been an omission in the supply-chain management on the part of the (pharmaceutical) company and their stockist in not recalling existing stocks proactively, resulting in existing stocks being sold at a higher rate. On our part also, we had not raised a rejection note to achieve the same objective."
However, he did not share details (number of units sold and to how many patients) on other variants like Sandostatin LAR 10mg and 30mg.
The hospital claims no other oncology drug has seen such a downward revision of rates. However, Novartis India, in its earlier response to dna, had clearly stated that prices of Sandostatin LAR 10mg were revised from Rs 48,277 to Rs 24,000 and 30mg from Rs 72,081 to Rs 35,000. The prices of Sandostatin SC 50mcg and 100mcg remain unchanged at Rs 380 and Rs 715 respectively, Novartis India had said.
There's also no clarity on Sandostatin sales at Tata Memorial's pharmacies in other centres – Kharghar and Kolkata.
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