Michigan attorney general warns 3 pharmacies about price gouging linked to COVID tests

Officials looking into Value Center Pharmacy II, Skip’s Pharmacy, Birch Run Drugs

An at-home COVID test. (AP Photo/Ted S. Warren) (Ted S. Warren, Copyright 2022 The Associated Press. All rights reserved.)

MADISON HEIGHTS, Mich. – Michigan’s attorney general issued a warning about price gouging to pharmacies that were charging $50 and $80 for at-home COVID tests that currently retail for under $20, she said.

“We will not stand for businesses exploiting this current wave of COVID-19 cases for monetary gain,” Attorney General Dana Nessel said.

A notice of intended action has been issued to Value Center Pharmacy II in Madison Heights, Skip’s Pharmacy in Holland and Birch Run Drugs, according to the AG’s office.

Officials said they received complaints from residents about at-home COVID test kits being vastly overpriced. Value Center Pharmacy II and Skip’s Pharmacy tried to justify the prices they were charging with invoices that showed how much they paid to buy the kits from Birch Run Drugs, according to Nessel.

“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,” the NIA revealed. “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.”

An iHealth COVID-19 Antigen Rapid Test package with two tests currently sells for $17.98 online. It was selling for as high as $19.98 over the past month, officials said.

NIA officials said it’s not surprising for the kits to cost more at brick-and-mortar locations, but the prices at these pharmacies appear to have been made “artificially high,” the investigation found.

Murali Ginjupalli owns Value Center Pharmacy II and Skip’s Pharmacy, and he also has a connection with Birch Run Drugs, according to authorities. That relationship was discovered during the investigation.

“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,” the NIA reported. “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 website shows (Ginjupalli is) 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 pharmacies have been invited to explore a voluntary assurance agreement to avoid additional legal action, Nessel said. 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.

About the Author:

Derick is the Lead Digital Editor for ClickOnDetroit and has been with Local 4 News since April 2013. Derick specializes in breaking news, crime and local sports.