3M Faces Pressure to Prevent Price Gouging Among Distributors of Its N95 Masks

As the black market trade of its N95 respirator masks has continued to swell, pressure is mounting on 3M, which manufactures the masks and other protective gear, to crack down on price gouging among its distributors.

Tuesday, amid widespread reports that vendors of medical supplies are wildly overcharging for the desperately needed protective devices, the Minnesota-based company insisted that it is committed to combating the inflation of prices for its products used during the coronavirus pandemic. In a statement about both price gouging and the sale of counterfeit masks, which also appears to be a problem, 3M promised that it “will aggressively pursue third-parties that seek to take advantage of this crisis. We are working with law enforcement authorities around the world — including, in the U.S., the U.S. Attorney General, state Attorneys General, and local authorities.”

But some civic groups are asking the company to do more. The Metro Industrial Areas Foundation, or Metro IAF, a Queens-based nonprofit, responded to 3M’s statement yesterday with a letter to the company’s CEO, Mike Roman, insisting that Roman make it clear to the company’s distributors that if they take advantage of the desperate need for protective gear they won’t be able to sell 3M’s products in the future.

The group is also demanding that, within 72 hours, 3M put together a database of its worldwide inventory of N95 masks, with product information, quantities, pricing, payment terms, location, and contact information — and make it available to health care providers. “We believe that putting the burden on healthcare buyers and law enforcement to fix the problem of price gouging is unrealistic and sidesteps 3M’s duty of responsible care for its products,” Rev. Patrick O’Connor of the First Presbyterian Church of Jamaica, Queens, wrote on behalf of the organization.

Metro IAF, an affiliate of a 75-year-old organizing network, isn’t usually involved in procuring emergency medical gear. The group has a history of working on issues such as jobs, criminal justice, education, and housing. But its focus has changed in recent weeks as clergy in some of the churches that belong to the network began to get desperate reports from their members on the front lines.

“We were all hearing the same story over and over again: We don’t have the equipment we need, we don’t have masks, we don’t have what we need to protect ourselves,” said Rev. David K. Brawley of the St. Paul Community Baptist Church in East Brooklyn. Many of Brawley’s congregants are front-line health care workers — “the folks who work in services within the hospitals, and not just doctors, also the folks who people tend to forget about,” he said. “These are people I deeply care about and love.”

So organizers from the group, whose member organizations include religious congregations, unions, schools, community health centers, and other civic institutions, began to investigate whether they might be able to arrange a purchase of some of the supplies themselves — and quickly found themselves in what has become the “Wild West” global market of medical supplies. Among the suppliers they identified was a Canadian distributor who claimed last week to have millions of N95 masks, but demanded a minimum purchase of 20 million.

Within hours of the distributor’s demand, the group had assembled a consortium of 19 different entities in need of the masks, including two major hospital chains, one city health department in Colorado, six county governments in three states, and one governor’s office. Though several of the buyers were also hoping to purchase gowns, gloves, ventilators, and other supplies, they were pooling resources to be able to put in the minimum order of 3M’s 1860 N95 mask, which protects health care workers against airborne particles and is “resistant to splash and spatter of blood and other infectious materials.”

Although the 1860 N95 masks should cost $1.27 each, according to a price list 3M issued yesterday, the Canadian dealer was charging more than $7 per mask. But the jacked-up price isn’t what killed the deal. Even the major hospital chains were desperate enough to spend the money. Instead, the group’s purchase began to fall apart when the dealer said that the Canadian military had seized 10 million of the masks and then insisted that the group not only commit to buying the remaining 20 million masks but also to five additional monthly purchases of 20 million masks, totaling $140 million.

While it is still exploring how to help purchase managers find supplies, Metro IAF has pivoted since that and other deals fell through. “After a few of these experiences, our team regrouped and realized that 3M and other larger players needed to help clean up this mess,” said Joe Morris, an organizer with the group. “They maintain that they don’t have control,” Morris said of 3M. “We maintain they need to get control. Their duty doesn’t end after manufacture.”

In addition to petitioning 3M to use its influence with its distributors, Metro IAF is also now focusing on getting the right kind of intervention from the defense logistics agency to coordinate supplies. “We need our government to do what the Canadian government seemed to be doing,” said Morris.

While health care workers are reportedly reusing masks, which is not standard medical practice, the CDC issued updated guidelines yesterday for “optimizing” the use of N95 masks during the Covid-19 outbreak. Among the strategies it listed to cope with the shortage were using “N95 respirators beyond the manufacturer-designated shelf life for training and fit testing” and extending their use “by wearing the same N95 for repeated close contact encounters with several different patients.” The CDC is reportedly also considering whether the general public should wear face masks. While that guidance is still being developed, it is expected to clarify that people who aren’t health care workers shouldn’t be using N95 masks.

Meanwhile, many health care workers have been left to fend for themselves. Erik Stilp, an interventional cardiologist in Milwaukee, noted that some “savvy individual health care providers have identified supply chains on their own.” Stilp said that, while many hospitals are running short of the N95 masks, several hardware stores seemed to have them available “at double or triple what they’re usually acquired for in bulk.”

“No large hospital is going to allow for unapproved PPE acquired by their staffers,” said Stilp. “But when providers are stressed and potentially unsafe and their only option is supplying themselves with rogue PPE, that’s a difficult conundrum for a doctor to be in.”

Metro IAF is hoping that the extraordinary conundrum will motivate 3M to do everything in its power to stop its distributors from making it difficult and more expensive for health care workers to obtain its masks. While its new terrain for the group, its request is similar to ones it has made of the gun industry in the past.

“We’ve asked gun manufacturers to take responsibility for their distribution chains and to say to their dealers that they have standards — that if you to sell a Glock or a Smith & Wesson, you need to meet Glock and Smith & Wesson’s standards,” explained Morris. “Just as a gun manufacturer ought to be concerned with whether their distributors and sales outlets act responsibly, so should 3M during a public health emergency care about the conduct of their distributors. They’re both life and death matters.”