Invacare rethinks price protection

Friday, June 6, 2014

ELYRIA, Ohio – Invacare’s decision to terminate its existing price protection policy has left some HME providers concerned about their ability to compete with online retailers and about the fate of the manufacturer’s brand.

“We’ve always looked at Invacare as the big shiny brand name,” said Chris Rice, CEO of Diamond Respiratory Care. “Without some sort of protection on pricing, anyone can charge what they want. It’s a race to the bottom.”

In a letter to its provider customers dated May 22, Invacare states: “Invacare Corporation is terminating the advertising policy, which consists of the lowest advertising and marketing prices (LAMP) guidelines and the Internet advertising and sales guidelines, effective immediately.”

Invacare states in the letter that it plans to introduce a new policy soon, but when contacted by HME News, it declined to provide additional details or a timeline, or to explain further why it terminated the existing policy before introducing a new policy.

“The existing policy was not the best way to address Invacare’s interests or those of our customers, and with that in mind, we felt it was best to terminate the policy now,” said Judy Kovacs, vice president, customer service and sales operation, in an email dated June 2. “We plan to introduce an advertising policy shortly that we believe will protect the Invacare brand and enhance the ability of all of our customers to effectively market our products.”

The way that Invacare, which has been handcuffed by a consent decree limiting its manufacturing activities since late 2012, has handled the change has led to quite a bit of speculation among providers.

“If you were to speculate, with the situation they’re in, are they hurting for business so much, they don’t care what people sell their stuff for?” asked Jim Greatorex, president of Black Bear Medical.

While they may not like it, providers acknowledge Invacare may have no choice but to ease up on its pricing protection policy, with increased competition from lower-cost manufacturers and increased pressure from providers for better deals.

“We’re moving into a mature life cycle in our industry,” said Woody O’Neal, vice president of O2 Neal Medical. “Dropping the policy plays into their favor. No one wants to buy a $200 bedside commode; it’s a $65 item.”