Look for Internet dealers to sell more oxygen equipment, study says

I came across this study the other day by Kalorama  Information, which predicts big changes are in store for the home respiratory market. Here's the executive summary, which I think you'll find interesting. MM

Internet Sales Challenge Respiratory Equipment Manufacturers, Says Report

NEW YORK-  Over six billion dollars worth of respiratory equipment is sold through online dealers, often discounted, one of the many distribution challenges that manufacturers of respiratory  equipment will face in coming years, according to healthcare market research publisher Kalorama  Information. Companies active in this product area will need to adapt their approach in order to stay  relevant in this new environment, says Kalorama Information, in its latest market report on the respiratory  equipment industry, "Market for Respiratory Equipment and Disposables, 4th Edition."

Kalorama Information believes that while product innovation and marketing will always be important in order to succeed in the $63.8 billion respiratory equipment market, distribution is also critical. The market includes items such as oxygen concentrators, ventilators, and airway masks, among many other items  which improve a patient's breathing function or deliver anesthesia. Where once manufacturers' sales reps and a few key dealers sold to hospitals, distribution now includes not only specialized home health care  providers and extended care facilities, but also retail drug stores, surgical supply houses, hospital and  HMO-based stores, mass merchandisers and increasingly, internet-based dealers.

"Where a respiratory equipment product is sold has become as important as the product itself," said  Kalorama Information publisher Bruce Carlson. "Internet price erosion is going to be a particularly important concern for manufacturers going forward."

Kalorama estimates that internet-based dealers now account for 10% of respiratory equipment sales and expects the internet to continue to grow in popularity. Products are often priced at a 25% to 30% discount online—and manufacturers are likely to respond with new high-value products or with products priced for  the discounted channels.

The report cites Respironics as an example of a company that has adopted multiple products at differing  price points for various levels of distribution. Its REMstar Series CPAP systems are low-cost, obstructive  sleep apnea therapy devices for the home care and internet market, while its BiPAP Pro and BiPAP Plus  are more feature-rich devices for standard distribution.

Kalorama's report, "Market for Respiratory Equipment and Disposables, 4th Edition," covers the  latest trends and developments in a variety of segments. The report provides market estimates and  projections, and profiles of major competitors in the industry, aiding industry participants to re-assess the  industry's growth areas and direct their resources to these areas. It is available here.