California Governor Gavin Newsom issued an executive order prohibiting pricing gouging on at-home COVID-19 test kits. The order was issued as part of "the state's ongoing efforts to protect Californians amid the national surge in COVID-19 cases driven by the Omicron variant."
The executive order prohibits businesses from advertising or selling any at-home COVID-19 test kit at a price that is more than 10% greater than the highest price charged by that business for that test kit on December 1, 2021.
The order does carve out certain types of price increases, however. Prices may be increased to account for the increased costs imposed by suppliers, provided that "the price is no more than 10 percent greater than the total of the cost to the seller plus the markup customarily applied by the seller for that item in the usual course of business on December 1, 2021." In addition, if the business was offering at-home test kits at a reduced price on December 1, 2021, the business is permitted to sell the kids at an increased price, so long as "the increased price is not more than 10 percent greater than the price at which the seller ordinarily sold" the test kits.
Businesses that did not sell at-home COVID-19 test kits prior to December 1, 2021 are prohibited from advertising or selling the test kits at an "unconscionably excessive price," which is defined as a price that is more than 50% greater than (a) the amount that the business paid for the kit or, (b) if the business did not purchase the kit, the amount that it cost to produce and sell the kit.
"the national surge in COVID-19 cases driven by the Omicron variant"