A US drugmaker is charging almost $300 for a bottle of prescription vitamins that can be bought online for less than $5, in the latest attempt at price gouging in the world’s largest healthcare market.
In the latest example of eye-watering price-gouging in the US’s lightly regulated pharmaceutical industry, records show Avondale Pharmaceuticals, a mysterious company registered in Alabama, raised the price of Niacor from $32.46 to $295.
Niacor is a prescription version of niacin, a type of vitamin B3 that is frequently used to treat high blood cholesterol. A wide range of generic versions of the vitamin are available; Walmart sells a jar of 100 tablets for $14.99 while other brands are available online for even less.
Yet some doctors still prefer to use the version approved by the US Food and Drug Administration to treat high cholesterol. The Financial Times said many doctors will be unaware the price of Niacor, for which 19,000 prescriptions were written last year, has so drastically increased because such announcements are not always made public or announced to the medial profession.
Avondale, a secretive Alabama-based company, put the price of Niacor up shortly after acquiring the rights to the medicine in a so-called “buy-and-raise” deal — a strategy made famous by Martin Shkreli, the disgraced biotech entrepreneur.
Shkreli, became the so-called “most hated man in the US” after he bought the rights to a drug used to treat people with Aids and increased the price by almost 5,000 per cent.
Shkreli was convicted in August of two counts of fraud and one count of conspiracy for misleading investors in hedge funds he ran. He is currently in jail awaiting sentencing.
The Financial Times said Avondale Pharmaceuticals bought the rights to Niacor from Upsher Smith, a division of Japan’s Sawai Pharmaceutical, earlier this year. The company also bought the rights to a drug used to treat respiratory ailments, known as SSKI, and multiplied the price 25 times, raising the cost of a 30ml bottle from $11.48 to $295.
Avondale Pharmaceuticals does not have a website and lists its address as a business park in Mountain View, a suburb on Birmingham, Alabama. The registered agent for the company is Acrogen Pharmaceuticals, which was set up in 2016 by Mark Pugh.
When The Independent visited the registered address, the suite said to be the company’s office was empty. People working in neighbouring offices said the suite had been vacant for some time and that they were not aware of any pharmaceutical companies or of Mr Pugh.
Mr Pugh’s Linkedin page says he is currently the CEO of Acella Pharmaceuticals, which lists its address in Alpharetta, north of Atlanta, Georgia. Nobody at that company responded to calls or emails.
Michael Rea, chief executive of Rx Savings, which makes software to help people find cheaper medicine, told the newspaper: “This is the latest example of an inefficient US market where the consumer, payer and doctor don’t have all of the information available to make a financially sound choice.”
He added: “They are caught in a web of inefficiency and are being taken advantage of.”