Respironics Instituting Price Controls ??

rested gal · Post by **rested gal** » Sat Dec 08, 2007 12:20 am

DME Daddy wrote:FDA approved machines are still going to sell dirt cheap on the internet right?. How does this help them?

Be kind. I am sensitive and I might be an idiot.

LOL, you're very smart, DME Daddy.

Yes, less expensive machines will sell cheap on the internet.

But internet sales are a drop in the bucket compared to the manufacturers' main (in numbers) customers...the traditional brick/mortar DMEs. THAT's who the established manufacturers want to cater to. THAT's where the bulk of their sales are. THOSE are the middlemen the manufacturers want to keep happy.

I think the guest nicknamed NiceDMEDude nailed what's going to happen, and why:

viewtopic.php?t=26342
Nov 29, 2007 subject: Manufacturer Pricing Policies

Snoredog · Post by **Snoredog** » Sat Dec 08, 2007 2:01 am

my opinionated guess:

This is a result of the value drop of the US dollar vs other currencies and OR
it is the result of that pricing policy put in place over a year ago by them bastards at Resmed and they are just playing monkey see monkey do

Slinky · Post by **Slinky** » Sat Dec 08, 2007 2:22 am

You? Opinionated? SnoreDog? Nah. I never wouldda guessed!

jupmalis · Post by **jupmalis** » Sat Dec 08, 2007 9:05 am

It happens all the time. When I went looking for New Balance running shoes, I found most US internet retailers will not sell to Canada, and vice versa. This is enforced by the manufacturer's threat to withhold supply. And the pricing is pretty tightly controlled, even if most of the shoes are made in China at a small fraction of the selling price. I guess those damn overheads get you every time, and I expect the DME's are high cost outfits.

I believe that the success of the two R's, apart from their existing market share, rests on DME's pushing their products into the homes of CPAP users. As with most of us, I would welcome the opening of this marketplace to free competition. And here comes the old saw - it starts with an educated consumer. But the same way as the doctor knows best, DME's consider themselves to be an extension of the doctor's office. I know how my local supplier tried to impress on me that they are accredited, and can lose this just the same as a doctor can lose a license to practice.

And the low overhead nature of the internet goes a long way towards this furthering of competition, as long as it has a source of supply of product.

DME Daddy · Post by **DME Daddy** » Sat Dec 08, 2007 12:20 pm

Certainly there will be items that cost much more in a price controlled environment. Anyone who is determined to buy a given name brand make is going to pay dearly for it. Those who are willing to explore new options will be able to get fine equipment at very good prices. I don't think the shoe market matches up with the cpap market. I have not seen any Resmed ads on TV lately with Michael Jordan or even Elmer Fud. Who wears cpap when they walk down the street? Who makes a fashion statement. with cpap? Who shows off how much money they have with cpap? Brand names are nothing in cpap. Nothing.

jupmalis · Post by **jupmalis** » Sat Dec 08, 2007 4:37 pm

DME Daddy, would it help if I told you I was buying New Balance shoes on the advice of an orthotic specialist, who I was referred to by a foot doctor. So the comparison to Cpap still applies. And the particular shoe is a diabetic shoe, size 12 6E to be exact. Not a fashion statement.

So my point is, manufacturers will try to manage their markets. And if they have downstream retailers to do this, they will support them unless they see something better. And I see Resmed and potentially Respironics as trying to flex their market muscle to do this. And Cpap users will be stuck with inflated prices if they allow this to happen. Given what I see in dollar stores, is a Cpap mask worth anything more than twenty or thirty bucks?

And god bless the small manufacturers, who have a hell of an uphill battle to fight, with the exception of PB and FP who have a foothold. And my impression is that FP does have a global presence, but has not made it in the US of A. Why?

Slinky · Post by **Slinky** » Sat Dec 08, 2007 8:13 pm

'Cause they don't provide full data capabilities and pressure relief??
'Cause they haven't felt inspired or inclined to add these "frills"??
'Cause xPAPs aren't a major part of their business??
Just guesses on my part.

jupmalis · Post by **jupmalis** » Sat Dec 08, 2007 9:29 pm

Slinky,

Just replying to our anonymous guest, who says brand names are nothing. Nothing, I tell you all. As our guest says. There goes the slippery slope, slinky.

NiceDMEDude · Post by **NiceDMEDude** » Mon Dec 10, 2007 8:48 am

Hello all,

It appears the word is spreading about new minimum pricing policies.

DME Daddy makes a good point about "name brand" manufacturers, but I agree with Slinky about the reasons that F&P and some others have not been players in the U.S. market.

Until F&P comes out with an Auto (which of course will have a removable download media and full data), they will not compete with R & R in any meaningful way. Plus, from my understanding, they fear a lawsuit if they produce a bilevel unit, so that will leave the PB 425 as the only option for bilevel therapy.

Do any of you feel, as I do, that if the smaller manufacturers like AeioMed get a foothold that results in a large revenue infusion that they will develop some higher-end devices? The only reason I mention AeioMed is because they appear to be the most aggressive in marketing and R & D.

I wish we had at least one or two more LEGITIMATE manufacturers, who devote a large percentage of revenue to research and development of new devices.

There is nothing like a few strong competitors to make company change it's tune, especially if they are getting their butt handed to them in the market. Probably would take several years, though, for any of the smaller companies to become major players.

This topic is fascinating to me (I hope many others as well), and I would love to see posts from everyone who has an opinion on this.

Take care everyone!

rested gal · Post by **rested gal** » Mon Dec 10, 2007 9:30 am

NiceDMEDude wrote:Until F&P comes out with an Auto (which of course will have a removable download media and full data), they will not compete with R & R in any meaningful way. Plus, from my understanding, they fear a lawsuit if they produce a bilevel unit

"of course will have"

"from my understanding"

Those phrases sound like you have inside info directly from someone at Fisher & Paykel. But, I won't ask.

I am curious, though... why would a lawsuit result from developing a bilevel machine... any more so than from developing a new autopap?

I hope you're right about any auto that might come out from F&P as being one that would have full data recording ability. An autopap without software available to the user, and full data recording at that....would not be anywhere near as attractive to most of us here as one "with."

Of course, if F&P decides to tag along with the minimum price requirement "stuff" that resmed started (and I fear Respironics may be caving in on next) that wouldn't be well received. Well, at least not by those of us who purchase our equipment online.

DreamStalker · Post by **DreamStalker** » Mon Dec 10, 2007 9:57 am

As has been said before, the informed PAP users make up a very very small minority. Most PAP users do not even know the basics about their own treatment ... much less about minimum pricing and marketing practices of the PAP manufacturing industry.

It is the big corporate DME businesses that control the PAP market and therefore the business practicies of the PAP manufacturing industry. Corporate profit monsters and Wall Street greed has has politically check mated competative American capitalism and innovation. In time, all competition will be smothered out before the consumer ever realizes that it existed in the first place ... I think they used to call it "monopoly" about 100 years ago. Unfortunately, I just don't see another age of "trust busting" in our near future if ever again.

Sorry for the pessimistic opinion ... but oh well, you asked

Wulfman · Post by **Wulfman** » Mon Dec 10, 2007 10:21 am

I've been saying for quite awhile that it's only a matter of time before their flow generators start coming into this market, too. If P-B 420G machines can sell for $200, it won't be long before the $50 - $100 machines are available from China......maybe at your local Wal-Mart.....next to the glucose testing supplies and blood pressure machines.
It's where all of our computer parts come from. It's not much of a stretch to make computerized flow generators from those parts.

If we're doing business in China, it's only logical that their manufactured items will start showing up here. They may already be and we don't know it.

Den

http://www.hmenews.com/index.php?p=arti ... 0712ATE0zA

Manufacturers raise prices on standard products
'This is not the year that prices are going down'
By Mike Moran Editor - 12.10.2007

YARMOUTH, Maine - As expected, some manufacturers have begun to raise prices on standard products to offset an increase in the cost of doing business in China.

Come Jan. 1, Graham-Field will increase prices on many standard products by 4% on average, said Ken Spett, vice president of global marketing. Invacare plans to increase prices on some standard products by 1% to 4% beginning Jan. 15, said Carl Will, group vice president for HME.

"Everything adds a little cost these days," Spett said. "This is not the year that prices are going down."

A number of factors have contributed to the boost in the cost of manufacturing products and parts in China: the declining U.S. dollar, an increased tax on exports, stricter regulatory and environmental controls, and rising materials costs.

"I've seen factories dumping the residue from the chrome-plating process into rivers," said Dave Jacobs, vice president of Medline's HME business. "Regulating these more will raise costs. It's the right thing to do, but it can cost a factory $1 million to put the right kinds of environmental controls on a process like that."

Chrome plating is used on many DME products made in China, including wheelchairs, IV poles and bed rails.

In September 2007, Drive President Harvey Diamond said he expected product prices to creep up, but that they would still be reasonable. Diamond did not return a call for this story, nor did Sunrise Medical.

Medline does not plan to raise product prices at this time, but it will open a factory in Vietnam in February as a hedge against future pricing increases in China, Jacobs said.

There could be additional pricing increases in 2008, say industry manufacturers.

"I'm not saying I'm going to increase prices (again), but if those factors continue, we'll have to pass along the increase," Will said.

DreamStalker · Post by **DreamStalker** » Mon Dec 10, 2007 10:38 am

Wulfman wrote:I've been saying for quite awhile that it's only a matter of time before their flow generators start coming into this market, too. If P-B 420G machines can sell for $200, it won't be long before the $50 - $100 machines are available from China......maybe at your local Wal-Mart.....next to the glucose testing supplies and blood pressure machines.
It's where all of our computer parts come from. It's not much of a stretch to make computerized flow generators from those parts.

If we're doing business in China, it's only logical that their manufactured items will start showing up here. They may already be and we don't know it.

Den

http://www.hmenews.com/index.php?p=arti ... 0712ATE0zA

Manufacturers raise prices on standard products
'This is not the year that prices are going down'
By Mike Moran Editor - 12.10.2007

YARMOUTH, Maine - As expected, some manufacturers have begun to raise prices on standard products to offset an increase in the cost of doing business in China.

Come Jan. 1, Graham-Field will increase prices on many standard products by 4% on average, said Ken Spett, vice president of global marketing. Invacare plans to increase prices on some standard products by 1% to 4% beginning Jan. 15, said Carl Will, group vice president for HME.

"Everything adds a little cost these days," Spett said. "This is not the year that prices are going down."

A number of factors have contributed to the boost in the cost of manufacturing products and parts in China: the declining U.S. dollar, an increased tax on exports, stricter regulatory and environmental controls, and rising materials costs.

"I've seen factories dumping the residue from the chrome-plating process into rivers," said Dave Jacobs, vice president of Medline's HME business. "Regulating these more will raise costs. It's the right thing to do, but it can cost a factory $1 million to put the right kinds of environmental controls on a process like that."

Chrome plating is used on many DME products made in China, including wheelchairs, IV poles and bed rails.

In September 2007, Drive President Harvey Diamond said he expected product prices to creep up, but that they would still be reasonable. Diamond did not return a call for this story, nor did Sunrise Medical.

Medline does not plan to raise product prices at this time, but it will open a factory in Vietnam in February as a hedge against future pricing increases in China, Jacobs said.

There could be additional pricing increases in 2008, say industry manufacturers.

"I'm not saying I'm going to increase prices (again), but if those factors continue, we'll have to pass along the increase," Will said.

Hmmm ... not much more optimistic outlook for minimum price increases coupled with minimum quality decreases as corporate monsters feed on China trade ...

Guest · Post by **Guest** » Mon Dec 10, 2007 11:16 am

Gosh RG, what are you, an English teacher? You actually read what people write, and you understand that words have meaning.

F&P is in the final FDA approval stages for their auto-capable unit, and apparently it is already in use in Western Europe. A feature they can claim as completely their own is the ability to sense when the CPAP user awakens, therefore giving it a much faster response time in decreasing the pressure back to the minimum level for which it is programmed. May be a boon, may be a marketing gimmick, but I for one have a great deal of respect for F&P's products. They are somewhat late in developing certain categories of CPAP, but when they bring a new product to market it is always thoroughly tested and they hold up extremely well. They have never had a blower recall, but that could be due to the fact that their products are more simplistic than those from R & R.

Regarding the fear of a lawsuit, if I remember correctly, ResMed was sued by Respironics back when ResMed brought their first VPAP to market. I think it was settled. The actual term "BiPAP" is trademarked by Respironics, but most people in the field use that term and "bilevel" interchangeably.
If and when others start developing bilevels, I guess they will attempt to distinguish theirs enough so as to not run afoul of existing patents. But patent law is far beyond me.

DreamStalker, IMHO you nailed it!

LinCare, Apria, Rotech, and American Home Patient together comprise probably somewhere around 50% of the market for these devices. Remember too that Respironics makes not only products for treating OSA, but they also make oxygen concentrators, nebulizers and the like. They probably do not want to jeopardize the sale of these other products to the big DMEs.

With 94-95% of the OSA market comprised of DMEs, I suppose all of the manufacturers are scratching their heads as they try to figure out how to make their entire customer base happy.

Can't be done!

Regards