J&J seems poised to sell iBOT direct to consumer

Thursday, October 31, 2002

NEW BRUNSWICK, N.J. — Since the world first learned in 1999 that Johnson & Johnson would be releasing a power chair with such features as the ability to climb and descend stairs and elevate the occupant to eye level with a standing person, there has been a lot of talk. Will there be a market for the chair? Can J&J recoup its investment? Will DME providers even be a part of the picture? But there haven't been many answers.

Johnson & Johnson and its subsidiary, Independence Technology—which will market the iBOT chair once the FDA approves it—continue to keep their cards close to their vests. But recent activity, such as putting out a call for sales reps with PT/OT backgrounds to sell the iBOT, suggests that the manufacturer is gearing up for something, and it probably doesn't involve rehab providers as part of the sales channel.

Though it won't discuss its hiring processes or potential sales strategy, Independence Technology is now advertising for 24 sales reps jobs across the nation, leading some to speculate that the expected $25,000 wheelchair will be sold directly to consumers.

"They are looking to hire 24 people by the end of the year with two or more years of experience selling to rehab clinics, and by the end of 2003 there will be 130 people on staff for this product," noted one rehab provider. "They are going direct with this. They will not be selling to providers."

Some are also saying that Johnson & Johnson will angle for a K0014 designation in the short run to help with reimbursement from private insurers, but that long term they will actually try to effect a change in the coding overall to accommodate the iBOT.

"In the reimbursement world, it's all about the least costly effective medical equipment. That's what payers will allow," said Nancy Lansing, RN, director of marketing for Design-Able, Connecticut Rehab and Assistive Technology, which are all operated by a holding company called ATG. "It will be interesting to see if it can even get paid for."

As Tim Barrett, operations manager at Louisville, Ky.-based Rehab Design noted, "It's hard enough to get a payer to reimburse for a Permobil, and the iBOT is way beyond Permobil's league."

The question lingers, though: Is the market for an ultra high-end power chair big enough to help Johnson & Johnson make back the estimated $150 million to develop the iBOT? In earlier statements, Johnson & Johnson estimated the market to be at least a million people worldwide. But some providers still wonder how many people will find the high-tech features appealing enough to pay several times over what they would for a more traditional high-end chair.

"There is no medical necessity to climb stairs," Lansing noted. "A chair like this won't help with spasticity or contractures or anything else. The question is, are you willing to pay $20,000 or $25,000 out of pocket for something that isn't medically necessary? I just don't hear people who need these kinds of products saying, 'I really wish I could climb stairs.'"

But, if any company can stick it out while the market for the iBOT develops, it's probably Johnson & Johnson, said Jim Greatorex, owner of Black Bear Medical in Portland, Maine. "They have deep pockets," he noted. "They sell an awful lot of Band-Aids."

In fact, Johnson & Johnson reported in mid-October that its third-quarter earnings were up 20% from last year, which beat consensus estimates by financial experts and helped rally the stock market into a more Bullish mode.

Still, many in the rehab industry insist that the iBOT is just too far ahead of the technology curve to make much more than a public relations splash for a while.

"Any novelty will gain attention," said Tom Hafford, Texas DME / Mobility Designs in Cleburn, Texas. "A chair that can go anywhere and climb anything sounds good, but does it really address the lifestyle aspect? I'm sure the first power wheelchair gained a lot of attention just like the horseless carriage did, and this might be a development of that caliber in the rehab world. But until I see practical applications for the product, I'm one of the people who will be standing on the curb waiting to see how it all shakes out."

As Bob Guoy, president of St. Louis-based United Seating & Mobility said, "I think it's a fantastic product—with a very, very limited niche market." HME