As demand for COVID-19 screenings soared with the recent omicron surge this past winter, a handful of New Jersey pharmacies illegally opted to sell — at possibly inflated prices — professional tests kits for unapproved use at home, according to state regulators.
In some cases, the kits were simply repackaged in plastic bags accompanied by photocopied instructions and sold retail, authorities said.
Four pharmacies — in Hudson, Middlesex and Morris counties — now face fines of up to $5,000 from the Division or Consumer Affairs in the state Attorney General’s Office for various consumer fraud violations, officials announced Thursday. It is not clear how many consumers may have been impacted or for how long the products in question were available.
With these, a total of 16 merchants have been penalized for price gouging or other misdeeds, according to the AG’s office, which has issued over 100 subpoenas in these cases and sent formal cease-and-desist letters to nearly 2,000 stores suspected of various “unconscionable business practices.” The businesses can appeal the charges.
‘We thought we were helping people, but we got fined.’
Paresh Patel, the owner of Sayreville Pharmacy — one of the two Middlesex County businesses penalized — told NJ Spotlight News he was not aware the tests his store repackaged were not intended for home use, noting the wholesaler who provided them never suggested they couldn’t be sold retail.
“Things were so crazy then,” Patel said of the demand for tests at that time. “We thought we were helping people, but we got fined.” He said he plans to explain the situation to state officials, but acknowledges the pharmacy is at fault and doesn’t plan to appeal.
Pharmacies have played a key role in New Jersey’s COVID-19 testing and immunization campaign. In addition to selling at-home test kits, many of the state’s 2,100 pharmacies have screened or vaccinated customers on-site. When the state’s immunization system was nearly overwhelmed by demand in the spring of 2021, CVS and Rite Aid partnered with the federal government to bring additional vaccine shipments directly to local communities. A separate federal contract put CVS and Walgreens in charge of immunizing residents at some 1,800 nursing homes and other congregate living sites.
‘Zero tolerance for such conduct’
“While New Jersey residents have joined together in fighting COVID-19, unfortunately there are still some businesses seeking to profit unlawfully from the pandemic. Two years after the pandemic arrived in New Jersey, we still have zero tolerance for such conduct,” said acting Attorney General Matthew Platkin.
On the same day as Platkin’s announcement, state officials also disclosed that Gov. Phil Murphy had tested positive for COVID-19 as part of a regular screening. He was not showing any symptoms or feeling ill, they said.
The governor and his family have been tested frequently throughout the pandemic; his wife was found to be infected in January, following a family vacation. Nearly 2.2 million New Jerseyans have been diagnosed with the disease since the pandemic’s start, although the number of cases identified daily has dropped significantly since January.
Platkin said easy access to COVID-19 testing is an important component in returning life in New Jersey to normalcy and encouraged residents to use the state’s online search tool to find reputable testing options, some of which are free.
Results from nearly 17.5 million test kits have been logged by the state since the pandemic’s start — including more than 2 million that were positive — although that doesn’t include hundreds of thousands of home-based screenings, which are not required to be reported.
Early in pandemic
According to the AG, the bulk of the alleged fraud occurred quite early in the pandemic, when residents in New Jersey — and across the region — were desperate for basic items like water, disinfectant and face masks. A Bravo Supermarket in Trenton was fined $5,700 for inflating the price of Poland Spring water in mid-March 2020 and a Food Fair market in Paterson faced a $5,250 penalty for overcharging on Cheerios cereal around the same time, according to a press release in September 2020.
The highest fine to date — $12,500 — was charged to Performance Supply, a business based in a residential Manalapan neighborhood, for attempting to resell 3M-brand face masks to the City of New York in mid-April 2020 for more than $6 each, six times the list price, the AG said. And convenience stores in Neptune, Parsippany and Ridgewood were penalized $500 each for not posting the prices on water, toilet paper or other hot commodities.
The recent allegations involve two drugstores — Valley Pharmacy in Succasunna and Sayreville Pharmacy in Sayreville — that now face $5,000 fines for breaking up boxes of COVID-19 test kits intended for use at hospitals, clinics or other testing sites and repackaging the items for individual use at home, which was not approved, according to the AG’s office. When state inspectors visited these sites in early January they found the repurposed kits for sale to the public in zip-close bags, some of which contained photocopies of the manufacturers’ instructions.
The Iselin Pharmacy, in Woodbridge, also faces a $5,000 fine for offering professional testing kits for unauthorized home use, which the staff kept behind the counter, the AG alleges. The owner said he had purchased the kits from another drugstore in Linden — in which he also had an ownership stake, state officials found — but was unable to provide receipts or other documents for the transaction.
The fines can be contested
In Union City, Wellcare Pharmacy faces a $500 fine for not properly marking the price of home-testing kits it had on display, according to the state. When an inspector visited in late February, he was unable to verify that these products had been sold at inflated prices, which a consumer alleged in a complaint more than seven weeks earlier.
Valley and Iselin pharmacies declined to comment on the allegations. A representative at Wellcare said he had not received notice of the AG’s violation before hanging up. The four businesses are scheduled for an initial hearing with state officials in early April and can contest the state’s fines through a formal administrative review process, according to certified letters sent by the AG’s office late last week. If they fail to respond to the notices, the businesses could face additional penalties of up to $20,000.
