Masks, Middlemen and Medicine: Protecting Ourselves from COVID-19

By Ashwat Subbaraman

A staggering 295,323 coronavirus-related deaths have occurred worldwide as of May 14, sending hospitals around the country scrambling to keep up with the demands of care. The United States has come to the forefront of this issue after replacing China as the country with the highest number of coronavirus cases on March 26.

SARS-CoV-2, the virus that causes COVID-19, can survive in the air and on surfaces. The risk of transmission in these ways, combined with the rapid growth of cases globally, the risk of asymptomatic transmission and the current lack of an effective treatment or vaccine, has created a great need for protective wear like masks, gloves, hand sanitizers and disinfectants. With the pandemic affecting areas around the world, large exporting countries like China halted exports on many of these items and thus U.S.-based manufacturers had to increase their outputs in order to prevent shortages on a massive scale. These U.S. companies included manufacturing giants like 3M, Honeywell and Medicomb.

3M Chairman and CEO Mike Roman made bold promises on March 22 regarding increased production of the company's services — and he delivered. The company nearly doubled mask production and strongly scaled up its production of sanitizers and wipes. Among these scale-ups was the company’s trademark N95 masks, named so because of its guarantee in preventing 95% of particles from entering the nose and mouth if worn properly. 

3M has been a major player in the mask industry, owed mainly to one key strategy. Unlike the majority of other companies that manufacture their goods in low-cost countries, 3M brings in the materials for its masks and respirators from locations near its assembly plants and serves customers reasonably close by. “We make respirators in China for the China market, we make respirators in Korea for a little more than the Korea market, ” Roman stated in an interview with Bloomberg.

Despite its unique production strategy, 3M has a major problem beneath its surface. 

“People are holding stocks of masks and waiting for them to increase in value before selling them off.”

This was said by Tamer Abdouni, founder of the Beirut-based Consultium Ltd., which facilitates global trade of, among other things, 3M masks. “This is a war on coronavirus, and I don’t want to be a warlord, ” said Abdouni to Bloomberg.

The problem that Abdouni tries to bring to light is the power of the countless number of middlemen that are buying and selling these products. These middlemen, Abdouni says, are not held accountable for raising the prices and are not obligated to direct their sales to hospitals. Thus, the masks are simply sold to the highest bidder, often for 10 times the regular price. The impacts of this price gouging include preventing masks from reaching hospitals and clinics, thereby putting countless patients at catastrophic risk. Although 3M released a letter from Chairman Roman to Attorney General William Barr condemning “pandemic profiteers,” it also asserted that it could not control what happens after selling its products to distributors.

In addition, according to Premier Inc. — an organization that helps over 4,000 member hospitals buy and manage supplies — scammers may already be trafficking counterfeit or faulty products. 

Billionaire investor Mark Cuban openly slammed 3M in a Fox Business interview on April 4 for shirking its duty to keep prices low and allowing distributors to make as much money as they possibly can. “I literally have been offered billions of masks at premium prices from $4 to $8, million-dollar minimum orders, who knows what’s real,” he added. Cuban said he reached out to Roman but remains dissatisfied.

Cuban, on his end, is finding mask sellers that he deems legitimate and pointing them toward Project N95, a nonprofit working with governments and health care providers to deliver medical equipment (including masks, gowns and ventilators) to crucial locations. Project N95 created a database in which hospitals report what they need and suppliers report what they have. This sort of data monitoring can dramatically help put life-saving equipment in the hands of frontline health care workers.

In the midst of a pandemic, mask production is not just an economic issue, but a moral one. “It’s operating like an illegal drug market, not a legitimate market,” Cuban remarked. “I get wanting to make millions of dollars, but people are dying.”