Why has Cognizin's Citicoline raised in price?

Prices for almost everything have gone up. A lot of that are the tariffs and shipping/freight increases. There's a 25% across the board tariff for all shipments from China. Then certain HS codes have an additional tariff on top of the 25%. Some of those are an additional 8.5% on top of the 25%. Then shipping has gone up by 400-500%. This is having massive effects on the cost of good in the supply chain. These cost increases inevitably trickle down to consumers, so our government putting these tariffs in place is only hurting American consumers. Then you add packaging costs and labor increases to the equation, and things get real fast. Our packaging supplier is doing their SECOND price raise since the start of the year. Everything just keeps going up and up in price.

Regarding Cognizin specifically, we have no control over the pricing of the raw material. That's set by the patent holder. Why not just sell generic citicoline? Well that's what we did before. We sold generic citicoline sodium. The issue is that the patent holder of Cognizin, in this case Kyowa Hakko, threatened to sue us over it. They found an obscure investigational new drug filing in the early 90s for citicoline sodium that never went anywhere. It was withdrawn before even being ruled on. However, their lawyers found a way to apply the current law in such a way that it applied to anything that was even filed as an IND. Doesn't matter that it was withdrawn and was never a drug. Our lawyers went over their statutory construction completely. It was solid. The way the law is written is that anything that has an IND filed before it was sold as a supplement can no longer legally be sold as a dietary supplement in the US. Yes, everyone selling that generic citicoline sodium is technically violating the law. Many fly under the radar, but they could be hit with a lawsuit or regulatory action by the FDA for it. To prevent a long protracted lawsuit with a multi-billion dollar corporation, we agreed to cease sales of generic citicoline sodium and to sell Cognizin. This obviously increases cost, and takes the ability for us to control raw material costs out of our hands. It is what it is. The law and regulations are written in a shitty way, and we have to comply.

Now will prices eventually come down? That's really hard to say. I would hope the tariffs will eventually be removed, and shipping return back to normal. However, it's anyone's guess when that will happen. Moreover, since we don't directly control the raw material cost for Cognizin, there is no indication that Kyowa would pass those savings on to us if/when they do come down. Based on past experience, they won't. Prices pretty much only go up from patent holders. In fact, we really are low on margins on Cognin even at these prices. We are in the single digit margins after product costs, marketing, and overhead with the Cognizin powders. We are literally at 8% margin on them. However, the market will only bear so much, so we have kept the prices as low as we can.

I really wish I had better news for you, but costs across the board just keep going up and up. This is why some people are sounding the alarms on inflation. I am seeing it first hand across the entire supply chain. You name it, the cost is going up. Some people in the government are saying this is just a short-term transient thing that should level off soon, but I can be more of a pessimist sometimes. I really hope they are right, because these types of cost increases just can't keep going for much longer.