Inogen gets tough with Web rogues

Saturday, May 31, 2008

GOLETA, Calif.--Inogen’s attempting to rein in rogue Internet resellers of its portable oxygen concentrators by, on occasion, selling direct to the consumer, said CEO Ray Huggenberger.

In January, the company initiated a policy to bypass traditional HMEs and sell direct if that person called Inogen wanting to purchase a POC for cash over the Internet. Such sales represent less than 5% of Inogen’s business, and the company still passes on all insurance business to its providers, Huggenberger said.

There were a couple of reasons for the new policy. Some Internet resellers--certainly not all, Huggenberger’s quick to point out--sell Inogen POCs way below the suggested retail price ($4,995), and, alarmingly, some of the products have ended up with patients who needed a continuous flow of oxygen, rather than Inogen’s pulse-dose technology.

Additionally, many Internet shoppers for POCs end up calling Inogen after talking to online resellers. Now, instead of turning them away, Inogen will sell them a POC if it’s appropriate for their condition. Huggenberger said.

Other HME manufacturers--ResMed and SeQual, for example--have implemented policies designed to help control Internet resellers who drive pricing into the basement and skip adequate patient assessment and care. Inogen, however, appears to be the first--or at least one of the first--to use direct-to-consumer sales to maintain pricing and patient services.

In the past, Inogen attempted to connect cash-customers with HME providers, but that didn’t always work out.

“The providers have done, in most cases, the right thing,” Huggenberger said. “They stuck with the retail price, and then the patient still shopped around and bought from an Internet seller. Providers have also sometimes quoted over the retail price, and again that business went to the Internet reseller.”