Cost Of Prescription Skin Gel Goes From $226 To $9,561 In Under Two Years

Stop us if you’ve heard this one before: there’s a drug out there that does a very specific thing, and has no generic alternative. For years, it sold for a predictable three-figure price point. Then one day, if gets acquired by a new company and in just a few months, the price increases by more than 4000%. It is, unfortunately, such a common tale of late that we all know the general outline by heart. And now it seems to be happening again.

Stat, a healthcare news site, brings us the story of a $9,500 skin gel, and its two counterparts.

A line of three skin-care dermatological gels isn’t as critical as the EpiPen or likewise life-saving insulin or anti-parasite drugs, it’s true. But the shenanigans leading to its recent price increases seem to be just about the same.

The gels were acquired by a company called Novum Pharma in March, 2015. In May, 2015, their prices went up. Alcortin A, used to treat dermatitis and eczema, started the year at $226 per tube and finished it at $2,995. Prices for the other two gels, Aloquin and Novacort, went up similar degrees.

Then came 2016. Novum has hiked the prices on the drugs twice this year. That tube of Alcortin A that cost $226 in 2015 is now up to $9,651 for the same amount. Aloquin is also wholesaling for $9,651, Stat reports, and a tube of Novacort is now up to $7,142 from its previous (also-high) price point of $4,186.

For Alcortin A, that’s a price increase of more than 4,100% in less than two years, which is, let’s say, more than a bit extreme.

Stat News wanted to know why Novum suddenly thinks the market should bear a price of nearly $10k per tube for eczema medicine. A spokesperson for Novum told them the wholesale prices as reported were inaccurate and included “thousands of dollars in extra charges” that third parties add along the way. Yes, that is what Mylan’s CEO said about the EpiPen and yes, while it does reflect a truth about the complications in the U.S. medical system, it seems unlikely at best to be the only element at play.

Stat asked, then, if the data they had was wrong, what the right information was, but Novum did not reply.

If you’ve never heard of Novum, well, nobody will blame you. Stat did some digging and found that the company basically sprang into being as a privately-held entity in 2015. Its only products are these three skin gels. Its website doesn’t contain detailed information, and when Stat called the number given online, no real human answered.

So Stat kept digging, through Novum’s ties to a business called Avondale Strategic Partners and, through state records, managed to find some folks listed as Novum managers. And among those managers are two folks who have a history, with other companies, of buying up drugs without generics and raising their prices. Significantly.

As Stat points out, this sort of thing has significant repercussions — and can backfire way beyond the bad PR hit. When some companies suddenly jack prices, others in the field follow. There’s been a wide-scale, rapid increase in prices for some dermatology treatments, which means insurers and pharmacies are now starting to exclude them from their lists of drugs they will cover. And when a $9,600 drug isn’t covered under insurance anymore, who’s ever going to actually buy it?

The curious case of the $9,500 skin gel [Stat News]

Want more consumer news? Visit our parent organization, Consumer Reports, for the latest on scams, recalls, and other consumer issues.