Profits before people- neoliberal market economy at its best

New York State paying 15 times more to buy medical equipment

There is acute shortage of medical equipment and supplies including ventilators-masks infusion pumps in America. The coronavirus outbreak in America has increased the demand for medical supplies. The total number of coronavirus infected patients has crossed two hundred thousand (2, 00,000) in America and numbers are still rising. The USA is desperately looking for essential medical supplies and equipment to deal with pandemic.

The companies that provide medical equipment and supplies to states-cities and hospitals have increased the prices many times. The America is facing a public health crisis but private vendors and companies are using it as an opportunity to earn huge profits. The market economy is at its best.    

According to media outlet ProPublica- 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.

The states and cities are forced to buy medical supplies and equipment outside of their usual vendors and contracts-they 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.

Some people will argue here that the increased demand and shortage of supply has created the situation in which prices went up. They will tell us the economic law of demand and supply. But what they will never tell us that prices have gone up because some private companies and capitalists using this crisis situation to maximise their profits. They are using this human tragedy to earn maximum profits.  

The states are competing with each other to get the medical supplies and equipment and ready to pay any price to get them. The competition among cities and states is also helping the profiteers to increase the prices.   The New York state has estimated that increased prices 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.

New York State has become the epicenter of the COVID-19 pandemic, with about 40% of the America’s coronavirus cases. New York State is especially desperate for medical equipment, no matter what the tab.

The ProPublica has reported that 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.”

New York isn’t the only government paying whatever it takes — and keeping quiet about who’s overcharging. Houston Mayor Sylvester Turner the media that he authorized paying $4 per N95 mask and still lost the bid. Turner’s spokeswoman Mary Benton said that price was commonplace but declined to provide further details.

“What Mayor Turner mentioned was not an isolated incident but rather the norm for today’s extreme demand on masks.” “Given the urgency of the city’s COVID-19 response and the focus on doing the work, the need for masks and other supplies, at this time we see no value in publicly calling out other cities or companies by name.”

That same price was apparently too much for the U.S. Coast Guard. It ordered 1 million N95 face masks for $5 apiece on March 17, then downgraded the order to 200,000 masks, before canceling altogether.

 Chuck Geer, the company’s senior vice president of field services, said Clean Harbors doesn’t manufacture masks. It simply offered to pass along the supplies from a vendor with access to 200,000 masks, Geer said.

In this situation-the rich states and cities might be able to pay very high prices for masks- medicines- ventilators- protective gears and other medical equipment and supplies but for rural areas and poorer cities this price is not affordable. They need immediate help from federal government to procure the much needed medical supplies and equipment. They are still waiting for the help.

We can clearly see that how the neoliberal market economy works. Even in the middle of an epidemic and worse public health crisis of modern American history-it is the lust for profits not the needs of the people that driving the market.

                                                               Khalid Bhatti