The first law of commerce decrees that if something is in short supply, the price immediately increases. This virus pandemic has created a shortfall in most medical supplies and many manufacturers have used this golden opportunity to hike their prices.
Our hospitals have some protection because they have access to government stockpiles bought under contractual arrangements, but for those outside that perimeter world demand makes medical supplies a sellers market and essentials like face masks are selling at premium prices.
This price inflation is most keenly felt by pathology laboratories, aged care facilities, Community health centres and any newly formed medical facility that had not had time to establish contractual arrangements with suppliers.
Pathologists report that protective gowns that sold for $1.65 before the pandemic are now costing as much as $ 13.27 and nasal swabs have increased from 50 cents to $3. Perhaps the most essential of all protective items - disposable gloves -have tripled in price, protective masks have increased five fold and alcohol swabs have gone from $50 to $99 a pack.
It seems that personal protective equipment - PPE - has attracted entrpreneurs who scent quick profits from this health crisis. COVID-19 has brought " carpetbaggers and snake oil salesmen " out of the woodwork and many manufacturers are facing rising costs as they try to ramp up production to meet market needs. In particular, freight prices have also increased sharply as a result of the need for faster deliveries.
The fact that this is a world pandemic has added the price incentive of a huge surge in demand. It is not uncommon for supplies being loaded on a plane for delivery to Australia to be put on hold because of a higher priced bid from another country. A lot of companies lacking experience in the production of medical supplies have entered the field and consequently the quality of their output can be suspect.
One of the main victims of this price inflation is the independent general practitioner running a suburban practice. This is rarely tied in to contractual supply and is usually served by several suppliers competing for trade. The cost of running such a practice has increased sharply because of this price inflation and shows no sign of returning to stability. A similar price impact is hitting the aged care industry which is under government control in the care cost it charges residents.
Suppliers of PPE should remember that this pandemic will end, and the people they ripped off will have long memmories.
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