PMI flexes low-price muscles

Friday, October 31, 2003

MEDTRADE - Invacare is responding to bullish competition in the standard HME products category with a new subsidiary, Professional Medical Imports, dedicated to the distribution of low-price HME.

The subsidiary will be run as an independent entity, with separate manufacturing, sales, marketing and pricing platforms. PMI’s roster of ‘ProBasic’ brand products will run the gamut from standard, bent-metal DME to scooters and power wheelchairs.

The company has distribution centers in Calhoun, Ga. and Edison, N.J. and plans to open a third distribution center in southern California within the next 30 days.

Although Invacare declined to characterize the price difference between its Invacare brand lines that will now compete with PMI products of the same sort, industry sources say the aggressive, new pricing models are coming in at 25% less than name-brand products.

“There is a segment in the market that is more driven by price,” said Invacare senior vice president of sales, Lou Slangen, “and we want to play in that segment.”

Price is the primary driver in purchasing decisions for about 20% of the HME supplier base, Slangen estimates.

Invacare quietly began developing PMI in 1999. Last year, the company acquired Pinnacle Medsource, Inc. and rolled that distributor’s operations into the fledgling low-price vendor.

PMI manufactures the vast majority of its product in China, which has emerged as a powerful source of production for the HME industry in recent years, so much so that Invacare has begun to intensify its own manufacturing efforts on the mainland.

In the near future, Invacare will open its first two factories in China where the company will make Invacare-designed and branded product.