TS Emily: Price-gouging banned in 31 counties including Palm Beach

Charging a lot more for gas, food, lumber and other supplies just got itself branded illegal in Palm Beach, Martin and 29 other counties as a state of emergency exists with Tropical Storm Emily.

Jeff English, the store manager for the Plantation, Fla., Publix grocery store stares at his empty perishable food shelves on Oct. 27, 2005, after Hurricane Wilma destroyed the electrical system powering the store forcing store workers to dispose of perishable foods. (AP Photo/J.Pat Carter)

How much more? State law defines it as a “gross disparity” between the current price and the average for the previous 30 days. That vagueness leaves some wiggle room, but fines after prior storms have often gone to a sprinkling of mom-and-pop operators. Big corporations are less frequently targeted; they have the resources to fight in court if they so choose.

More than 10,000 Floridians complained about price-gouging after 2008’s Hurricane Ike, many about gas prices — though the approach of storms can shut down refineries or otherwise drive up fuel prices. And prices recently jumped 9 cents a gallon in Palm Beach County and are expected to go higher. So it’s complicated.

What’s covered? The price gouging statute  mentions “essential commodities.” The Florida Attorney’s General’s Office says this includes food, water, ice, chemicals, petroleum products, and lumber to protect or fix properties. Examples not deemed essential: Alcoholic drinks and cigarettes.

To report price gouging, call 1-866-9-NO-SCAM.

 

EpiPen ‘price gouging’ indefensible? ConsumersUnion pushes petition

epipenWant to inject yourself into the debate on drug prices? A national consumer advocacy group is reaching out with a petition it plans to drop next week at the headquarters of the company that raised prices about 450 percent on EpiPens.

The petition aims at drug maker Mylan. The company has jacked up prices on injectable drugs that can save a kid’s life in an allergy attack from around $100 for a pack of two to more than $600, while executive pay shot up by millions, advocacy group ConsumersUnion says.

New York’s Attorney General said Tuesday his office has begun an investigation into whether Mylan may have inserted “potentially anticompetitive terms” into its EpiPen sales contracts with local school systems.

“An EpiPen can save a child’s life during a sudden allergic reaction,” an email from ConsumersUnion, the policy and advocacy arm of Consumer Reports, said Tuesday. “But the recent absurd price hike by Mylan is putting this lifesaving drug out of financial reach for many families. Sign our petition to tell Mylan to stop putting people in danger and lower the cost of the EpiPen.”

The group says people can sign up at consumersunion.org.

Mylan CEO Heather Bresch commented on the company’s website, “We understand the deep frustration and concerns associated with the cost of EpiPen to the patient, and have always shared the public’s desire to ensure that this important product be accessible to anyone who needs it.”

Among other moves, the company has announced plans for a generic alternative that costs about $300 and enhanced payment assistance for buyers.

Controversial former pharmaceutical executive Martin Shkreli,  scrutinized for big drug price hikes in his own tenure, is a Mylan defender: “I think important medicines should be expensive because they’re valuable.”

A pharmaceutical group is launching an advertising campaign to defend drugmakers, Bloomberg reported.

“We’re under pressure and scrutiny like never before,” said Jim Greenwood, chief executive officer of the Biotechnology Innovation Organization. The “Innovation Saves” campaign emphasizes drugs can save lives and costs to the health-care system.

 

Tropical Storm Colin: Don’t worry, gouging still legal in S. Fla.

Jeff English, the store manager for the Plantation, Fla., Publix grocery store stares at his empty perishable food shelves on Oct. 27, 2005, after Hurricane Wilma destroyed the electrical system powering the store forcing store workers to dispose of perishable foods. (AP Photo/J.Pat Carter)
Jeff English, manager for a Plantation Publix grocery store, stares at empty perishable food shelves on Oct. 27, 2005, after Hurricane Wilma. (AP Photo/J.Pat Carter)

Monday’s order by Florida Attorney General Pam Bondi forbids price-gouging in 34 counties in advance of Tropical Storm Colin, but Palm Beach, Martin and St. Lucie counties are not among them. Normal gouging activities are not affected in most of southeast Florida.

State law prohibits “extreme increases in the price of essential commodities, such as food, water, hotels, ice, gasoline, lumber”  and other equipment needed as a direct result of an officially declared emergency, Bondi’s office explains.

“Florida consumers need to be diligent during this state of emergency to ensure they do not become victims of price gouging,” Bondi said in a statement. “Taking advantage of consumers during a declared state of emergency is not only reprehensible, it is illegal and will not be tolerated.”

This is boilerplate talk before a storm to discourage profiteers, but it raises old debates about laws that try to keep a lid on prices in disasters. Florida’s law forbids pricing that “grossly exceeds the average price at which the same or similar commodity was readily obtainable in the trade area during the 30 days immediately prior to a declaration of a state of emergency.” OK, but what is “grossly excessive” in percentage or dollar terms?

After 2008’s Hurricane Ike threatened to disrupt gasoline supplies and affect prices, for example, more than 10,000 Floridians complained about price-gouging. At least two retail stations in north and central Florida agreed to settlements of about $6,000.

Still, one man’s gouging is another man’s free market in action.

“There is no such thing as price-gouging, period,” said Alex Epstein, an analyst for the Ayn Rand Center for Individual Rights, a Washington-based espouser of free-market policies. “Price-gouging laws should not be allowed, period. The last thing we should want in a crisis is for people to be afraid to produce gas or sell it at a market price.”

Freezing prices only discourages producers from providing more of a product to areas that need it, he told the Palm Beach Post in 2009. Higher prices attract more supply, which tends to stabilize prices in due course, he said.

But try giving that lecture in how markets work to people reeling from a storm. People often feel outraged, abused and exploited if they face really steep price hikes for a bottle of water or a gallon of gas, said David Hoffman, associate professor of law at Temple University.

“I think price-gouging laws will always be with us,” Hoffman said.