DeVilbiss Implementing Internet Policy

[NiceDMEDude]

Greetings to all.

I have not posted in quite some time, but wanted to share this information with the good folks on CPAPTalk.

We are all quite familiar with the restrictive, anti-competitive pricing policies which have been implemented by Philips-Respironics, Fisher & Paykel, and the most egregious of them all, ResMed.

Now, sadly, DeVilbiss is jumping on board as well. Effective later this month (possibly February 15th, 2012), a policy will be implemented to control the price at which their products are sold online. I will have more details in the coming hours, but if history is any indication there will certainly be increased pricing; at the very least, the selling price will be less transparent than it is currently.

They are also increasing the warranty period to 5 years, which is nice, but does not offset the harmful effect of a large price increase. Think of the warranty this way: would you prefer to pay twice as much for a machine with a 5 year warranty (versus the current 3 year warranty), or would you prefer to pay much less initially? The technology changes so rapidly that my preference would be to pay much less at the time of the initial purchase, and simply replace the unit with a new one if it becomes non-functional after the warranty expires.

While the longer warranty softens the blow a bit, it is yet another example of a manufacturer attempting to bypass the free market system which has served this country so well.

My knee-jerk reaction is to sell off my current inventory at any price I see fit, and simply cease offering the DeVilbiss units on my site. I have not sold one single DeVilbiss unit in my local DME, but it sells quite well on my website. The local physicians do not script this unit, and they never will. It is a pure internet play, and they are fooling themselves if they think otherwise.

DeVilbiss has allowed their success to inflate their ego; they do not seem to realize that the entire reason their sales numbers are so impressive is due to YOU, the online customers who seek out a quality product at a reasonable price. Keep an eye on the Consumer Preference portion of CPAP.com. Let us all watch as DeVilbiss falls from their position in the quarterly trends.

I will also call on every internet dealer with whom I have a relationship and ask them to join me in ceasing to carry these products. We did not have that luxury with the other manufacturers, but DeVilbiss simply does not have the juice to pull this off (not with me at least). I do not NEED their products like I do ResMed and the others.

Bite it DeVilbiss

Best regards to everyone.

[SleepingDVader]

Well that really stinks! I was planning on purchasing one of their units as a travel/backup. I'm really new to bipap and have been investing (too much too fast) in extra hoses and masks, backup battery and power cables, etc. Was really hoping to hold off for awhile before purchasing a backup machine. Any recommendations?

[NiceDMEDude]

SleepingDVader, I would wait a few days until we have more details for you to make an informed decision.

At this point though, you may want to start budgeting for a purchase prior to February 15th.

[Slinky]

Unfortunately, the pricing policy has worked out well for Resmed. Watch their stock ratings and prices. In 2010 they were able to con their investors into approving the maximum annual pay for nonexecutive directors of ResMed as a group from $400,000 to $800,000.

... In fiscal 2010, the six nonexecutive members of the company’s board received $330,000 in retainer payments as a group ­ $60,000 each for committee chairmen and $50,000 for the others, according to a Securities and Exchange Committee filing outlining the proposals.

Those figures represented an increase over the pay rates that had been in place in 2009 when each board member received a $15,000 retainer, $1,500 for attending board meetings and $1,000 for attending committee meetings.

Without the change, ResMed could face problems increasing the size of its board or paying directors at rates that keep pace their peer companies, the board argued....

[NiceDMEDude]

Thanks for that info Slinky.

My take on that: ResMed makes fantastic interfaces which are in high demand. We sell the Swift FX at approximately a 10:1 ratio over the next closest interface. Same goes for the Quattro, Activa, Swift LT, etc. Their stock has performed well (IMHO) due to the quality of their masks.

ResMed basically dominates the competition in that product category.

Philips-Respironics dominates (in my geographic region) the blower business.

ResMed tries to strong-arm DMEs into buying their blowers by threatening to raise their price on interfaces. "Buy more S9 units, or we'll be forced to charge you more for masks".

Respironics has the opposite approach. "The only way we can give you that great price on machines is if you buy 500 of our masks at the same time".

DeVilbiss does not have the ability to pull this off. Period. If DeVilbiss cuts me off due to non-adherence to a legally questionable policy, I don't care, because I do not need them.

Sorry if I ramble, but I'm not a happy camper at the moment.

[Pugsy]

DeVilbiss Intellipap Auto with the additional stuff needed for software use was already close to Respironics price for the PR S1 APAP which is an exceptional value and a great machine. Less than $100. I don't care for the software reports on the Devilbiss machines. No wave flow data. Hard to visualize event graphs. If they force a jacked up price then people who would normally opt for the price savings will just go to the next best price and it won't be DeVilbiss. Cutting their nose off to spite their face IMHO. The extended warranty...not worth it for me. Except for a few lemons, which can happen with any brand, these machines pretty much all perform way past that 5 year mark anyway.

[jmcanzo]

The number one reason I own a Intellipap was the price. Number 2 was the data, and 3 was the warranty. Maybe the DeVilbiss Rep will chime in for us.

[Emilia]

Interesting..... but I also anticipate a new machine and data interface is coming from DeVilbiss as well. They have been working on a new machine and asked for user input last year. I will wait and see what happens... my IP auto is only 16 months old so I have that luxury. It would be nice if our forum member, DeVilbiss Marketing, could shed some light on this development and when we might expect a newly designed machine and data interface.

[NiceDMEDude]

Emilia, they are introducing a new product, a IntelliPAP Auto BiLevel, this month.

Not sure about a complete platform update, but that would make sense. Launch a new platform to coincide with a new policy regarding internet sales, in hopes it will soften the inevitable drop in sales due to higher pricing.

I did just speak with their VP of Sales for about an hour, and I feel he would have mentioned an imminent product introduction. But I challenged him (politely) on so many points that perhaps he tired of me, and just wanted to end the conversation. We'll soon see...

[Slartybartfast]

I read a similar story on another internet DME site a while ago. http://www.cpap-supply.com/Articles.asp?ID=327

Certain manufacturers maintain very tight controls over the prices retailers charge for their wares. Bose audio stuff is one that comes to mind. From an outsider's perspective, it looks like price-fixing, but in order for it to be so, collusion must be proven. http://business-law.freeadvice.com/busi ... fixing.htm

Too bad for DeVilbiss. I haven't looked at their corporate position, but some genius there must think they're leaving money on the table. One reason I liked them is that they offered a high quality product at prices that undercut the competition. However, since they, like all xPAP manufacturers, market entirely to the professional community, what the customer pays is really not a factor because the customer is the insurance company. And what us chickens here think is really of little concern to them.

If everyone rowed their own boat things would change quickly. There's no reason a machine like the Resmed S9 Autoset needs to cost $1100.

[Slinky]

Product News
DeVilbiss Healthcare Introduces Its Latest Respiratory Assist Device
The IntelliPAP® AutoBilevel System from DeVilbiss Healthcare incorporates the automatic adjusting therapy of the AutoAdjust® system and the comfort of the Bilevel to deliver superior therapy at higher prescription pressures, according to the company.

“The AutoBilevel algorithm enables the device to maintain a lower mean airway pressure than many competitive devices, providing a more comfortable therapy and ultimately better patient compliance,” said Brian Palmer, product director of sleep devices for DeVilbiss Healthcare.

DeVilbiss Healthcare’s patented Flow Rounding™ technology softens transitions during IPAP and EPAP, and the soft start function slowly increases to the prescribed pressure over a period of 10 seconds, making it easier for patients to acclimate to higher pressures. The system includes the SmartCode® remote adherence monitoring system without additional cost or fees. With a call to the patient, providers or clinicians can obtain therapy-efficacy data including leak % and apnea-hypopnea index, as well as usage data through a simple 12-digit encrypted code provided by the unit.

I'm not trying to undermine you, NiceDMEDude. I"m really disappointed that DeVilbiss has opted to take this tact as I/we were quite hopeful when DeVilbissMarketing would post here and was interested in what we had to say and wanted in a PAP device, etc.

[Slartybartfast]

[snip] I'm not trying to undermine you, NiceDMEDude. I"m really disappointed that DeVilbiss has opted to take this tact as I/we were quite hopeful when DeVilbissMarketing would post here and was interested in what we had to say and wanted in a PAP device, etc.

What DeVilbissMarketing was doing here was providing customer service, generating goodwill and collecting direct customer feedback. Sure, a few sales were generated by DeVilbissMarketing's presence, however the corporate sales/marketing types are keenly aware of who it is that actually pays them for their products. Unless they want to go the route of the big pharma companies (I feel queasy when I see my employer saturating radio and TV with glitzy ads, which the FDA used to prohibit) and market directly to the end user, that's not going to change.

I presume the marketing folks at DeVilbiss are savvy enough to have either run a test marketing study, or have what they consider reliable data that such an approach would not be advantageous.

[chunkyfrog]

Can't do anything this year--just spent two grand on a hearing aid and hubby needs a pair of them.
Our flex will be gone for the year.
Any travel/back-up machines will most likely be second hand.--and we were hoping for new. . .
Devilbiss WAS the number one contender!

[Cotay]

If the statistics I've heard are to be believed, most folks on CPAP/APAP don't care about data or tweaking the clinician menu. For those folks this isn't such a bad deal.

Consider that the IntelliPAP Autoadjust with Humidifier will now cost $490...a roughly 14% increase over the average current online price. That isn't actually too bad for an additional two years of warranty coverage. Your average user that doesn't care about data will see this a very important value ad. I'm even guessing that DME's will see this as a very nice selling point.

Now for those of us who are obsessive with data and monitoring our settings, this doesn't seem like such a good deal when you consider that the PRS1 can be had for $515-$615 with full data and SD Card capability out of the box.

I would suggest that maybe DeVilbiss could market two SKUs here for the Autoadjust at the new price. One with the 5 year warranty and a second version that maintains the 3 year warranty but comes with the Smartlink Module.

[archangle]

If the statistics I've heard are to be believed, most folks on CPAP/APAP don't care about data or tweaking the clinician menu. For those folks this isn't such a bad deal.

It's a bad deal when they find out their doctor can't monitor their therapy because there's no data being recorded.

It's a bad deal when they get less effective treatment because of a lack of data.

It's a bad deal when they have to pay for an in-lab study to try to find their problems instead of just reading the data recorded by a data capable CPAP.