Novum Pharma, a Chicago-based pharmaceutical company that made headlines in 2016 for its massive price hikes, has now filed for bankruptcy.
The trouble for Novum began when it started jacking up the price of an older eczema and acne skin cream — over a period of a few years the cost for one tube skyrocketed from $242 to $9,561. The company said it was attempting to offset its difficulties getting the cream, Aloquin, covered by insurance companies. Instead of helping Novum, the price increase only deepened its problem.
The price change caught the attention of the press and CVS, which dropped Novum’s cream from its formulary, citing the price hike. Other major PBMs, such as Express Scripts followed suit.
In its bankruptcy filing, Novum cited the bad press associated with the price hikes and the lack of insurance coverage for its products for its financial woes. The company also pointed to “a series of manufacturing issues” it experienced after acquiring Primus Pharmaceuticals in 2015, as well as competition from generics and a dispute with a wholesaler.
Read the full Chicago Tribune report.