New York is getting played for chumps trying to get medical equipment and supplies

Propublica

With the coronavirus outbreak creating an unprecedented demand for medical supplies and equipment, New York state has paid 20 cents for gloves that normally cost less than a nickel and as much as $7.50 each for masks, about 15 times the usual price. It’s paid up to $2,795 for infusion pumps, more than twice the regular rate. And $248,841 for a portable X-ray machine that typically sells for $30,000 to $80,000.

This payment data, provided by state officials, shows just how much the shortage of key medical equipment is driving up prices. Forced to venture outside their usual vendors and contracts, states and cities are paying exorbitant sums on a spot market ruled by supply and demand. Although New York’s attorney general has denounced excessive prices, and ordered merchants to stop overcharging people for hand sanitizers and disinfectant sprays, state laws against price gouging generally don’t apply to government purchases.

With little guidance from the Trump administration, competition among states, cities, hospitals and federal agencies is contributing to the staggering bill for fighting the pandemic, which New York has estimated will cost it $15 billion in spending and lost revenue. The bidding wars are also raising concerns that facilities with shallow pockets, like rural health clinics, won’t be able to obtain vital supplies.

As the epicenter of the pandemic, with about 40% of the nation’s coronavirus cases, New York state is especially desperate for medical equipment, no matter what the tab. “We know that New York and other states are in the market at the same time, along with the rest of the world, bidding on these same items, which is clearly driving the fluctuation in costs,” budget office spokesman Freeman Klopott said in an email.

The Office of General Services, New York’s main procurement agency, declined to say which sellers were inflating prices for essential medical gear. “At this moment in time the New York State team is focused on procuring goods and services based on current market conditions,” OGS spokeswoman Heather Groll wrote in an email. “There will be time to look back and pull together info on all this, that time will be when the pandemic is over.”

Store owners claim they are gouging customers during COVID-19 pandemic because their suppliers are pressuring them to

QNS

 
For weeks, hand sanitizer, face masks, Lysol spray, disinfectant wipes and even gallon jugs of water have become scarce across New York City as residents stockpile their apartments for self-quarantine. In response to reports of price gouging on these items, Mayor de Blasio has vowed to get tough on the culprits.

The Department of Consumer and Worker Protection put an emergency rule into effect that makes price gouging illegal for a number of items needed to stem the spread of coronavirus. 

But while the mayor’s announcement took aim at retailers, dollar stores in the Ridgewood area struggling to comply said that they are not often the source of the inflated prices. Price gouging begins higher on the supply chain with wholesalers and distributors that sell to discount stores, they say.

When a customer walked up to the counter of U2 99 Cent Store in Glendale asking for isopropyl alcohol, store manager Steven Ng said that he stopped stocking it because he himself was getting gouged on the wholesale price. 

“We have to make a living, too. Before we sold for $2 and right now the wholesale price is $2. If we sell it for $2.99 people complain. What are we going to do? Sell it for $1.99? We’re losing money. So I’m not going to carry anything,” Ng said.

The mayor’s new law has presented 99-cent stores, who often rely on a competitive market of wholesalers for their stock, with a choice: continue to stock the items at a loss or negligible profit or stop stocking them at all. 

Out of the eight dollar stores that QNS visited, only one had a supply of hand sanitizer that it had saved  from a shipment that the store got before the last week of closures and directives to self-quarantine. Many of the shop owners said they are choosing the latter option and leaving their shelves that once contained wipes and hand sanitizer empty.

“If they’re charging more money, what am I going to do?” said Saleh Hassan, the manager of Glendale 99 Cent on Myrtle Avenue.

Hassan said that he relies on salespeople from wholesalers who typically travel into his shop to update him on their stock. His store has stayed out of wipes and sanitizer for weeks because his wholesaler didn’t have a supply or was inflating prices that he was unwilling to pay.

The problem is unique to stores that rely on a loose network of wholesalers to supply their products. 

Family Dollar on Broadway and Grove Street in Bushwick, for instance, doesn’t have that problem. A cashier said that they rely on a chain-based distribution system that drops off a limited supply of the sought-after items every few days.

Ng said that he gets his product supply from a number of wholesale warehouses that straddle the Brooklyn-Queens border on Flushing Avenue, but declined to identify which specific outlets are inflating their prices. He said that he’s stopped selling 33-ounce bottles of hand sanitizer at the price point set by the wholesaler because customers were complaining.

AG goes after gasoline price gougers

From The Politicker:

As several gas station owners are about to learn, it’s against New York State law to jack up the price of goods like fuel after a hurricane. To wit, Attorney General Eric Schneiderman announced he is bringing his “first series of enforcement actions” against price gougers in the wake of Superstorm Sandy.

“Today’s action is the first in a series of steps my office will take as we continue to actively investigate the hundreds of complaints we’ve received from consumers of businesses preying on victims of Hurricane Sandy,” the attorney general said in a statement. “We will do everything we can to stop unscrupulous individuals from taking advantage of New Yorkers trying to rebuild their lives.”

Although the law doesn’t specifically cite an illegal price for gasoline, it does prohibit an “unconscionably excessive price” during an “abnormal disruption of the market,” according to Mr. Schneiderman’s office. In addition to “war” and “military action,” the law names “weather events” as a triggering event that would restrict such sharp price increases. A fatal storm that left much of the city without gas would certainly seem to qualify.

Gas price gouging in College Point

"130-09 14th ave in College Point.



Cross Island Parkway, Whitestone.



150-65 Cross Island Parkway. They not only kept prices the same but hired extra people to pump gas in order to speed lines up.

Thanks, Exxon of Whitestone." - anonymous