Market efficiency is precisely about public wellbeing. Concretely, what are you suggesting? In face of limited supply, there's only 2 choices: keep the prices low or raise the prices. The former accelerates supply depletion; the latter helps maintain supply availability. You're asking for the government to come in and pull a third choice out of their sleeve, but I don't see such a choice. If you're the government, concretely, what would you do?

EDIT: Now, if you suspect price gouging, that's different. wtfrmyinitials was referring to a genuine shortage, though.

And does what? Mandates that hand sanitizer not exceed some price/oz? There'll still be shortages, because some whales will buy it all. Mandate caps on the amount that a person can buy? I suppose hospitals are fucked then, and that's assuming that people don't circumvent the restrictions anyways.

So the only way to "solve" the issue is to add more supply, and "price through the roof" is as good a way to get more supply (and possibly better) as the government mandating more production.

A bottle of isopropanol, prior to this event, cost approximately 79 cents.

The only change to resource allocation we need is a psychological one: specifically, to accept the idea that prepping, even at a very small level, is not insane.

If the price is being "gouged" by the manufacturer, doesn't that mean they will ramp up production much faster? The extra money will also help them hedge against the risk of overproduction if the thing fizzles out fast.

Not to mention people are less likely to unnecessarily hoard years worth of supplies and prevent others from using it if it's more expensive.

If everyone who could afford to handle their own lives and responsibilities did, the role of government could actually be to prop up the bottom x% and keep things stable. If 90% of people make no preparations, there's no possible way to respond in a way that you can save everyone from a serious disaster.

Sadly, whether you think it's 70% or 90% that could get themselves organized and take responsibility for their own security makes little difference in the real world because almost nobody actually does. The world went from victory gardens to big brother and people seem to prefer it this way.