Michigan pharmacies suspected of price gouging at-home COVID-19 tests

DETROIT (FOX 2) - A Notice of Intended Action has been issued to Michigan pharmacies accused pf price gouging at-home COVID-19 tests.

Michigan Attorney General Dana Nessel said Value Center Pharmacy II in Madison Heights and Skip’s Pharmacy in Holland were charging more than they should be they should be for the tests.

"As detailed below, this Office has evidence Value Center Pharmacy was charging $50 per kit for the iHealth kit in December 2021, and that Skip’s Pharmacy was charging $80 per kit for that same product in early January 2022. We have compared these prices with both those being offered online as well as those being charged by other Michigan pharmacies. The information we have gathered provides probable cause to believe Value Center Pharmacy and Skip’s Pharmacy were charging prices to consumers for the iHealth kit grossly in excess of the price at which this kit was being sold by other retailers," the NIA said.

When purchased online from the manufacturer, the iHealth COVID-19 Antigen Rapid Test currently costs $17.98 for a package with two tests and was selling for as high as $19.98 over the past month. The NIA did note that tests could cost more at brick and mortar stores, but that the prices at the two pharmacies were "artificially high."

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Nessel said the pharmacies tried to justify the prices by showing invoices with the price they paid to get the test kits from Birch Run Drugs.

According to Nessel's office, the resident agent of the two pharmacies, Murali Ginjupalli, has a connection to Birch Run Drugs.

"Compounding this Office’s concerns is the resistance we have met in trying to gather information about the prices being offered at Value Center and Skip’s Pharmacy for iHealth tests. We understand these stores to be under common ownership. And, when we finally did receive some information we were requesting, it was in the form of invoices showing Value Center and Skip’s Pharmacy purchased the kits from Birch Run Drugs. A business look-up of Birch Run Drugs on the Michigan Department of Licensing and Regulatory Affairs (LARA) website shows you are the resident agent for that entity as well. Thus, it appears an effort was made to justify the prices being charged by Value Center and Skip’s Pharmacy through invoices that do not reflect arms-length transactions," the NIA said.

The Department has invited the pharmacies to explore a voluntary assurance agreement to avoid additional legal action. They have until Feb. 13 to respond and have also been asked to provide additional documentation.

"Our attempts to look into consumer complaints have been met with unnecessary roadblocks thus far, so it is my hope this can be resolved without needing to take additional action against these pharmacies," Nessel said. "We will not stand for businesses exploiting this current wave of COVID-19 cases for monetary gain. If you believe the prices for at-home test kits or any other COVID-related item are higher than they should be, please contact our consumer protection team. We remain committed to addressing instances of price gouging."