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Nicotinic acid reduces lipid levels by inhibiting hepatic synthesis of very-low-density lipoprotein (VLDL) through inhibition of diacylglycerol acyltransferase-2 and decreasing free fatty acid mobilization from adipose tissue via inhibition of hormone-sensitive lipase. These actions lead to reduced triglyceride production, decreased LDL cholesterol, and increased HDL cholesterol. Additionally, niacin induces vasodilation via prostaglandin release, accounting for common flushing side effects.