Friday, December 31, 2004

SAN JOSE, Calif. - On a recent Tuesday afternoon at eBay, you could have bid on a CPAP package that included a Respironics Virtuoso LX Auto, a ResMed Mirage mask, filter, tubes and plug and a carrying case for $365. The seller’s mother had used it once but didn’t take to it.

“The entire system cost me well over $1,300!” the seller wrote in the listing.

If you went back to eBay the following day to place a bid for that package, or 17 other flow generators or masks that were there Tuesday, you’d be out of luck. That’s because eBay, after considerable input from suppliers and a push by ResMed just before Medtrade, has begun to shut down the auctions before they close.

“Their policy is that anything that requires a prescription or is FDA- regulated should not be sold over eBay,” said Ron Richard, ResMed’s v.p. of marketing. “All we were doing was asking them to enforce it.”

Before eBay cracked down, the volume of CPAP sales had been rising steadily for years, said John Goodman, president of

“eBay was moving about 12-15 CPAPs a day, and 30-40 masks a day, and it was growing,” he said.

The sales bothered suppliers, not so much because eBay was gobbling share but because suppliers believed eBay’s pricing pressures were creating a misperception among insurance companies.

If consumers could buy new flow generators and masks at such deeply discounted prices, insurers were inclined to wonder why they couldn’t pay that amount as well, said Sandy Fermoile, owner of Apnea Care in Buffalo, N.Y.

The cost of providing CPAP therapy extends some distance beyond the cost of the equipment, say suppliers. And those costs are not reflected in the price paid on line.

“[Insurance companies] are negating the costs of dealing with insurance companies,” said Goodman. “In my business, 20 cents of every dollar is spent trying to get paid by insurance companies.”

Since ResMed pressed eBay, the company says the volume of auctions has dwindled dramatically, from a one-time high of 60 pages to just two pages. Though CPAPs may still make it onto the site, they’re pulled before they reach Page One.

Not so for oxygen concentrators. Name-brand concentrators were selling for $100 to $150 during the same week eBay was shutting down its CPAP auctions. Part of the reason eBay clamped down on CPAP may be the result of direct efforts by ResMed and suppliers. And part of the reason there might have been so many CPAP products for sale online may be unique to CPAP sales.

“A lot of [sleep lab] technicans [who received masks from manufacturers at deeply discounted prices] were taking them home and selling them at oneseys and twoseys,” said Fermoile.

Other culprits, he said, were the manufacturer’s reps themselves.

“They’d get a supply of masks from the manufacturer, and instead of giving them out for trial, they were selling them,” he said.