The FBI discovered the supplies during an enforcement operation by the Department of Justice's COVID-19 Hoarding and Price Gouging Task Force on March 30 and alerted HHS which used its authority under 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 and 130,000 surgical masks, procedure masks, N100 masks, surgical gowns, disinfectant towels, particulate filters, bottles of hand sanitizer, and bottles of spray disinfectant.
"If you are amassing critical medical equipment for the purpose of selling it at exorbitant prices, you can expect a knock at your door," said Attorney General William P. Barr. "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," said 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. President Trump's all-of-America approach to combating the coronavirus involves an aggressive approach to stopping hoarding, and the American public can play a role by being on the lookout for this behavior."
HHS will pay the owner of the hoarded equipment pre-COVID-19 fair market value for the supplies and has begun distributing to meet the critical need for the 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.
"This is the first of many such investigations that are underway," said 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."
Vendors interested in selling PPE to the federal government should contact the Federal Emergency Management Agency here. Anyone who learns of hoarding or price gouging of PPE should report it to the National Center for Disaster Fraud by dialing 866-720-5721 or emailing email@example.com.
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.
The Defense Production Act and Presidential Executive Order 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.
In response to the U.S. Justice Department's announcement, AdvaMed President and CEO Scott Whitaker released the following statement:
“Given recent allegations of price gouging in some parts of the country, it is important to be perfectly clear: Our member companies’ No. 1 priority is saving lives and at no time in our history has that been more apparent than over the past month as they have dramatically ramped up production of the diagnostics and devices that are essential to identifying, treating and combatting COVID-19.
“While AdvaMed members set their prices individually and AdvaMed has no involvement in these decisions, we are confident that prices set by manufacturers on this much-needed equipment have remained consistent since before the pandemic began, even as the cost of component parts and materials have risen as the result of worldwide demand pressures. I am proud of our industry’s commitment to people over profits and their dedication to saving as many lives as possible.
“The price gouging appears to be from third parties who are hoarding products that are crucial to the public with the hope that doing so will drive up prices far beyond normal market levels. There is absolutely no evidence that AdvaMed members have engaged in that conduct. To the contrary, they are working as hard as they can to supply as many products as possible to health care providers and the patients we all serve.
“We fully support the president’s recent executive order granting U.S. Attorney General Barr the authority to prosecute any and all who engage in price gouging. We stand with the president and patients in fully condemning those who do.”