Antitrust Law Daily Hoarded medical supplies seized from price gougers, rushed to front lines of COVID-19 battle
Thursday, April 2, 2020

Hoarded medical supplies seized from price gougers, rushed to front lines of COVID-19 battle

By E. Darius Sturmer, J.D.

Departments of Justice, HHS exercise Defense Production Act authority to order that supplies discovered during first COVID-19 Hoarding and Price Gouging Task Force investigation be "immediately furnished" to the government for distribution to "the doctors, nurses, and first responders who need them."

The Department of Justice and the Department of Health and Human Services (HHS) announced on April 2 the distribution of hoarded personal protective equipment (PPE), including approximately 192,000 N95 respirator masks, to those on the frontline of the response to the pandemic caused by the novel coronavirus or COVID-19 in New York and New Jersey.

The FBI discovered the supplies during an enforcement operation by the Justice Department’s COVID-19 Hoarding and Price Gouging Task Force on March 30. It then alerted HHS, which used its authority under the Defense Production Act (DPA) to order that the supplies be immediately furnished to the United States. In addition to the N95 respirator masks, the supplies found included 598,000 medical grade gloves, 130,000 surgical masks, procedure masks, N100 masks, surgical gowns, disinfectant towels, particulate filters, bottles of hand sanitizer, and bottles of spray disinfectant, according to the government.

The Defense Production Act, along with a March 27 Presidential Executive Order delegating additional authority under the DPA with respect to health and medical resources, are intended to prevent accumulation in excess of reasonable demands of business, personal, or home consumption, or for the purpose of resale at prices in excess of prevailing market prices, also known as hoarding and price gouging, of medical supplies critical to the COVID-19 response.

HHS will pay the owner of the hoarded equipment pre-COVID-19 fair market value for the supplies and has begun distributing it to meet the critical need for supplies among healthcare workers in New York and New Jersey. Specifically, after inspecting the supplies, HHS arranged for the delivery of the PPE to the New Jersey Department of Health, the New York State Department of Health and the New York City Department of Health and Mental Hygiene.

"If you are amassing critical medical equipment for the purpose of selling it at exorbitant prices, you can expect a knock at your door," Attorney General William P. Barr said. "The Department of Justice's COVID-19 Hoarding and Price Gouging Task Force is working tirelessly around the clock with all our law enforcement partners to ensure that bad actors cannot illicitly profit from the COVID-19 pandemic facing our nation."

"Cracking down on the hoarding of vital supplies allows us to distribute this material to the heroic healthcare workers on the frontlines who are most in need," noted HHS Secretary Alex Azar. "Thanks to the quick work of the White House, the Department of Justice, and HHS, the seized resources were distributed in days to the doctors, nurses and first responders who need them," he added.

"This is the first of many such investigations that are underway," according to Peter Navarro, DPA Policy Coordinator and Assistant to the President. "Our FBI agents and other law enforcement agencies are tracking down every tip and lead they get, and are devoting massive federal resources to this effort. All individuals and companies hoarding any of these critical supplies, or selling them at well above market prices, are hereby warned they should turn them over to local authorities or the federal government now or risk prompt seizure by the federal government."

HHS and the Federal Emergency Management Agency continue to collaborate with private industry to overcome the shortage of PPE across the country amid the COVID-19 pandemic.

MainStory: TopStory Antitrust ConsumerProtection GCNNews Covid19

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