An executive at an Ohio hospital accused Battelle, a science company lauded by Gov. Mike DeWine for its newfound ability to decontaminate N95 respirators, of price gouging.
Lisa Geiger, CFO of Alliance Community Hospital in Stark County, filed a price gouging complaint with Attorney General Dave Yost’s office on April 2.
She alleged Battelle Memorial Institute told the hospital it could decontaminate the protective masks, which are in shortage nationwide, for $3.50 per mask. Bloomberg Businessweek reports the N95s typically cost about 70 cents each.
The hospital reports annual spending of more than $100 million per year on average, tax filings show.
Given the governor’s March 29 statement claiming Battelle can decontaminate 160,000 masks per day (the company puts that figure at 80,000), Geiger said Battelle is making $560,000 per day on its technology, which “seems like price gouging.”
The technology allows masks to be re-used up to 20 times, a partial answer to a national shortage as the domestic COVID-19 caseload rises.
A week after Geiger filed the complaint, Battelle won a $415 million federal contract to deploy its decontamination technology nationwide at no charge to health care providers.
After Battelle procured the federal contract and the hospital received media inquiries, a spokesman said the hospital would not pursue the complaint, which was obtained via public records request.
TR Massey, a Battelle spokesman, said “prices in the early days were in flux,” and noted the complaint has been withdrawn.
“Battelle brought its technology to market at its own expense and has worked closely with the State of Ohio and the Ohio Hospital Association to ensure that the service was of value to any healthcare providers who would choose to use it,” he said in a statement.
The U.S. Department of Health and Human Services, which awarded the contract, did not respond to inquiries.
A shortage of masks
Since state health officials first detected the new coronavirus that causes COVID-19 in Ohio on March 9, DeWine has warned of a looming shortage of N95 masks.
The masks, regulated by the Food and Drug Administration, provide more respiratory protection than a standard surgical mask by providing barrier protection against droplets in the air that could carry the virus, according to the CDC.
The respirators, as well as ventilators, gowns, gloves, and other medical gear, are in short supply around the country. Ohio received about half the allotment it requested from a federal stockpile. The governor and Ohio Department of Health Director Dr. Amy Acton banned non-essential medical procedures to lock down available resources.
President Donald Trump has also invoked the Defense Production Act to compel 3M, a large-scale manufacturer, to produce N95 masks.
‘Reckless’ decision reversed
In late March, DeWine pressured the FDA to remove restrictions placed on how many masks Battelle could sterilize per day, calling the regulators’ decision “reckless.” The FDA is allowing Battelle to decontaminate an unlimited amount of masks on an emergency use authorization.
DeWine called the technology a game changer given its ability to decontaminate a single mask up to 20 times. Trump on Monday called the technology an “incredible thing.”
Despite the governor’s warmth, the CDC offers cooler guidance on the new technology.
“CDC and [the National Institute of Occupational Safety and Health] do not recommend that [masks] be decontaminated and then reused as standard care,” the CDC advises. “This practice would be inconsistent with their approved use, but we understand in times of crisis, this option may need to be considered when [mask] shortages exist.”
Likely, nothing, as far as the complaint.
Geiger said in an email Tuesday she’s going to rescind her complaint. She did not answer whether she’s doing so because of the federal contract enabling Battelle to decontaminate masks at no cost to the hospital.
A spokesman for the attorney general said consumer complaints involving a transaction generally enter an informal mediation process. The office then evaluates complaints to see if further action is suitable.
The U.S. Department of Defense, in a news release, said six Battelle decontamination units have been deployed to Columbus, Boston, Chicago, Tacoma, and two to New York.
Sixty systems will be available by early May for prioritization by the Federal Emergency Management Agency and HHS — enabling the decontamination of 4.8 million masks per day.