Mail-order drug giant ramps up HME offering

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Sunday, August 31, 2003

WOBURN, Mass. - Liberty Medical Supply, the nation’s leading direct-to-consumer diabetes provider, will begin marketing home healthcare products to its half million customers through a new catalog developed by Cardinal Health.

The catalog will feature some 750 products that span home healthcare, including mobility and bath safety products, and will start shipping to its large customer base in September or October.

“Since we’re already talking to them [through Liberty’s diabetes and respiratory medicine business], we want to make this available to them as well,” said Keith Trowbridge, president of Liberty Medical Supply.

Last year, with marketing support from the company’s avuncular, television spokesman Wilford Brimley, Liberty’s diabetes business generated $245 million in sales; its respiratory business, including nebulizer meds, racked up $75 million, a 44% jump over the previous year’s business.

The new foray into home healthcare is intended as an adjunct, largely cash business, but if its Medicare customers want Liberty to do the billing for these new products, Trowbridge said they will.

In July, Liberty quit doing business with AmerisouceBergen and entered into a new long-term agreement with Cardinal Health. That move stimulated the desire for another crack at a catalog program, which Liberty first tried two years ago. That previous attempt to cross-sell to its massive customer base didn’t produce, said Trowbridge.

“The Cardinal catalog is much stronger. It’s well designed. The layout is consistent with what our customers want to see,” said Trowbridge.

After testing the Cardinal catalog with a sample portion of its customer base already, the response encouraged another major campaign. “A different time, different place, maybe a different success, huh?” he said.

Cardinal currently runs catalog programs for its customers in other classes of trade, which include chain and independent pharmacies, hospitals and managed care organizations. Although Cardinal hasn’t focused on the HME customer, the pharmaceutical distributor is in the midst of a three-year expansion of its home healthcare business - an effort that began with its core pharmacy business and is now expanding to specialty providers like Liberty.

“There are lot of synergistic opportunities with Liberty,” said John Himmelstein, Cardinal’s director of home healthcare. We’ll be able to test some new concepts and new models that we can’t do with our traditional independent or chain business.”

Reaching home healthcare customers through the use of catalogs is tempting, but Trowbridge admits that there is no precedent of success. There is certainly a precedent for trying to cross-sell within your existing customer base.

Apria tried and aborted catalog program two years ago. A large mobility company is rumored to be rolling out a supplies catalog to its customer base soon, if not already.

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