Drugmaker raises price of acne cream to $10,000 a tube

US pharma group accused of price gouging over huge increase in price of Aloquin

A US drugmaker producing skin creams for common conditions such as acne and eczema has raised the price of two of its treatments to almost $10,000 a tube in the latest instance of “gouging” in the world’s largest healthcare market, according to reports.

Novum Pharma, a Chicago-based group, last week more than doubled the price of the ointments, even after similar increases by other drugmakers prompted outcry and propelled the topic of high healthcare costs into the US presidential campaign.

Martin Shkreli became an international pariah last year after he increased the price of a drug given to Aids patients from $13.50 to $750 a pill while Mylan, the maker of EpiPen, recently came under fire for a sharp rise in the price of its life-saving allergy injection.

Novum last week raised the price of a 60g tube of Aloquin, which is used to treat conditions such as eczema and acne, by 128 per cent to $9,561.


The ointment contains two inexpensive main ingredients: iodoquinol, a decades-old antibiotic that prevents fungal growth, and aloe polysaccharides, derived from the aloe vera plant. A similar cream containing iodoquinol is readily available as a generic and costs less than $30, while a tube of aloe vera can be bought for a few dollars.

Limited evidence

Aloquin’s label says it is “possibly effective”, meaning the US Food and Drug Administration has decided there is only limited clinical evidence suggesting it is safe and works as intended.

"From a clinical standpoint, a drug listed as 'possibly effective' by the FDA shouldn't be a likely treatment choice by doctors – especially not with a $10,000 price tag," said Michael Rea, chief executive of Rx Savings Solutions, which sells software designed to help employers and their workers reduce the cost of prescription medicines.

Novum also increased the price of Alcortin A, another skin cream, by the same amount, while a third ointment, Novacort, went from $4,186 for a 29g tube to $7,142.

The high price of medicines in the US has become a central issue in the presidential campaign, with Hillary Clinton, the Democratic nominee, launching attacks on several companies, including Turing Pharmaceuticals, which Mr Shkreli used to run, and Valeant, a Canadian drugmaker.

Most recently, Mylan came under the spotlight for raising the price of its EpiPen by more than 500 per cent since 2007 to roughly $600 for a pack of two. The company has raised the price roughly 30 per cent this year.

Congressional hearing

Heather Bresch

, Mylan’s chief executive, is due to be grilled on the price increases by US policymakers at a congressional hearing on Wednesday.

Novum’s price rises far outstrip Mylan’s – and rival Mr Shkreli’s in size.

As recently as May 2015, a tube of Aloquin cost $241.50, but shortly after acquiring the drug from its previous owner, Primus Pharmaceuticals, Novum raised its price overnight by 1,100 per cent. In January it again increased the price before raising it a third time last week, according to the figures.

Overall, the price of Aloquin has increased by nearly 3,900 per cent since May of last year.

The strategy of acquiring drugs and then implementing sharp price increases - known as “buy and raise” – has become so controversial that many pharmaceutical executives have pledged to abstain from the tactic.

Novum is a privately held company that does not report its sales or revenues. It was launched in 2015 by “a group of like-minded investors who believe in the firm’s focus of providing therapeutic innovations that are affordable for patients”, according to a company spokesperson.

The company said it would invest the revenues generated by raising prices in schemes that ensured more patients could access the medicine.

– (Copyright The Financial Times Limited 2016)