Price gouging hits health workers’ supplies
The private market for respirator masks, collection swabs, hand sanitizer and other supplies critical for front-line workers has become a profit-driven frontier, officials say.
Florida’s governor calls it “shady as hell.” The state’s emergencymanagement director calls it “a Ponzi scheme.” Hospital CEOs say they have little choice but to pay top dollar for the supplies that they need to protect patients and workers from the novel coronavirus.
The private market for respirator masks, collection swabs, hand sanitizer and other supplies critical for front-line workers has become a profit-driven frontier where bidding wars drive up prices, orders are promised but never delivered and vendors are not always who they appear to be, according to interviews and statements by Florida government officials and hospital executives.
“It’s shady as hell, that’s for sure,” Gov. Ron DeSantis said Thursday during a news conference in his Tallahassee office.
Though Florida has received shipments of masks from the federal government in recent weeks, DeSantis said he is frustrated by the state’s experience buying masks on the private market only to find out the supplies never arrived.
“It’s unbelievable,” he said. “There’ll be shipments of masks coming in, and you go to get them . ... They’re not there.”
Asked whether that should be considered price gouging, DeSantis wouldn’t say.
“I don’t want to say that it is just because like, I don’t have firsthand knowledge,” he said.
But members of DeSantis’ administration do.
Jared Moskowitz, director of Florida’s Division of Emergency Management, said he has had orders pending with vendors for a month. The most soughtafter commodity, and the only one he has had trouble acquiring in large quantities, is the N95 respirator mask, which protects against airborne particles.
Moskowitz said he has repeatedly run into unreliable vendors and brokers who contacted his office with offers of masks that never materialize even after the state has signed a purchase order.
“All of these brokers are coming out of the woodwork who are representing manufacturers,” Moskowitz said. “That’s where there’s the wild, wild west of N95 masks. It’s just complete madness.”
Moskowitz said distributors have told him that Florida’s orders keep getting snapped up by cash-paying customers.
“They continue to get pushed down,” he said, “and when I ask why does that happen, they say because folks are coming in with cash. I say, ‘What do you mean folks are coming in with cash?’ They say, ‘A lot of these factories are in other countries and those other countries are not democracies.’ ”
Moskowitz has taken the state’s struggle public, launching a social media campaign to pressure a mask manufacturer to stop selling masks to the highest bidder and provide them to states struggling to contain the coronavirus pandemic.
In a Twitter message directed at 3M, which manufactures N95 masks, Moskowitz sounded more like a frustrated consumer pleading for assistance than the person helping to lead Florida’s response to the outbreak.
“Please send us N95 masks directly to our hospitals, first responders and the state,” Moskowitz wrote on March 30. “How many brokers and distributors do we have to negotiate with only to find empty warehouses?”
That same day, at a news conference in Palm Beach County, Moskowitz said he has spent hours on the phone trying to buy supplies and likened the experience to “chasing a ghost.”
“We’re chasing down warehouses, only to get there and find out they are empty,” he said. “We’re being told these supplies are on planes, only to see that they’re phantom planes, chasing ghosts, when they don’t show up on FlightAware.
We’re engaged in bidding wars, being asked to wire money to accounts that were set up that very same day with email addresses that were created only a couple days ago.”
South Florida hospital executives say they, too, have encountered exorbitant prices for masks and other supplies that used to cost much less before the coronavirus pandemic.
Wael Barsoum, CEO of Cleveland Clinic Florida, said his hospital system has not had a problem dealing with its traditional suppliers, such as Cardinal Health and Premier Medical. But when those suppliers are sold out, Barsoum said, the hospital’s supply chain supervisors have turned to private vendors.
“That’s where you’re getting into all kinds of shadiness,” he said.
Carlos Migoya, CEO of Jackson Health System, Miami-Dade’s public hospital, said he’s thankful that the hospital currently has enough masks, face shields, gloves and gowns to protect its workers, even if they’re being rationed to conserve supplies. But if he has to buy more on the private market, he’s expecting to pay top dollar.
“A lot of these vendors … are taking advantage of the opportunity and the prices are going up,” he said, during an interview on March 25. He later announced he had tested positive for COVID-19, the disease caused by the novel coronavirus, and was self-isolating.
“We early on bought a bunch of masks, and we bought them at a rate of 20 masks for $9.50, which brings the price to about 47 cents each mask,” he said. “I think those N95 masks are now going on the market in great numbers at $3.50 to $4.50 apiece. And if you have none, you have no choice but to buy them.”
Migoya noted that Florida has an anti-price gouging law, “but good luck using it.”
Florida’s price gouging law, enacted after Hurricane Andrew in 1992, makes it illegal for vendors to run up prices on commodities or services considered “essential” during a state of emergency. The law compares the price of a commodity during the state of emergency to the average price charged over the 30-day period prior to the declared state of emergency.
According to the Florida Attorney General’s Office, any “gross disparity” between the prior price of a commodity and the price charged during the state of emergency is considered price gouging.
Florida Attorney General Ashley Moody has been posting examples to social media of price gouging during the coronavirus pandemic and calling out vendors by name.
Moody’s office has released a list of commodities considered essential under the state of emergency ordered by the governor on March 9. The list includes protective masks, hand sanitizer and other supplies needed to keep healthcare workers and the public safe from the highly contagious disease.
Last week, Moody announced that her office had issued more than 40 subpoenas to third-party sellers accused of price gouging on face masks, hand sanitizers and disinfectants on Amazon. In a letter to Amazon CEO Jeff Bezos dated March 24, Moody thanked the company for its help identifying individuals who were selling supplies at price increases of up to 1,662%.
Moody’s office has set up a hotline for consumers to report price gouging by calling 866-966-7226 or visiting the agency’s website at MyFloridaLegal.com.
Kylie Mason, a spokeswoman for the state attorney general’s office, said in an email that the hotline has received more than 1,200 consumer complaints about price gouging.
The top three items consumers have complained about the most are cleaning supplies, masks and hand sanitizer. The highest numbers of consumer complaints received by the office have come from Broward, Miami-Dade, Palm Beach and Hillsborough counties.
Mason said the office’s consumer protection division is working to deter price gouging “in real time” but no charges against a retailer or vendor have been announced.