There are two forms of Vitamin B3

Niacin
Niacin is able to increase good cholesterol but it has a side effect of causing flushing which isn’t harmful but is annoying. It does this by activating the G-protein coupled receptors, GPR109 a and b, which then cause the release of a variety of prostaglandins, some of which cause the dilation of blood vessels (flush response) by stimulating a large release of histamine. This causes the person who has taken niacin to appear red and they may have a prickly sensation. Other side effects include: headache, elevated liver enzyme, and reduced glucose tolerance.

Other benefits of flush free niacin include: reducing the level of products of glycolysis in the blood and, improving the peripheral utilization of glucose
In a study that was conducted in Germany, inositol hexanicotinate was compared to niacin in its lower the free fatty acids levels overnight. Inositol hexanicotinate produced a significant reduction in the amount of free fatty acids in blood, than niacin.
Sources:
- http://cholesterol.about.com/cs/nicotinicacid/a/niacin1.htm
- http://cholesterol.answers.com/cholesterol-supplements/the-effectiveness-of-flush-free-niacin-in-lowering-cholesterol-levels
- http://www.4hourlife.com/niacin-and-niacinamide-vitamin-b3/
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