SeQual ensures patient service as part of sale

Sunday, March 16, 2008

SAN DIEGO - SeQual has implemented a new reseller policy that requires the company's customers to adhere to a set of terms and conditions that govern the sale of SeQual products on the Internet, at home and abroad. Additionally, the new policy dictates levels of support that ensure timely service and maintenance of SeQual products used by patients.

The policy move comes amid concerns that Internet resellers and other price-driven dealers may abandon the necessary service component that attends the sale and maintenance of a high-tech oxygen device like the company's Eclipse portable oxygen concentrator.

"It was something we needed to do because of all the debates that have been ongoing, all the cuts in reimbursement and how transparent the Internet has made pricing," said Ron Richard, senior vice president of strategic marketing.

SeQual made its policy known to sellers in a letter that circulated in December. Thus far, Richard says, feedback from brick-and-mortar providers, and some Internet dealers, has been encouraging, and that 95% of the customer base is on board with the stringent new requirements.

The policy echoes an Internet reseller policy that Richard put into effect when he was vice president of marketing at ResMed. That policy is still in effect. Like SeQual today, ResMed's reseller measures were a hedge against dealers who would drive pricing into the basement and skip the patient contact that contributes to increased compliance.

"Recently we've seen that Internet providers who compromise patient service in order to offer drastically reduce prices have given insurance companies an inaccurate impression of the cost of providing effective treatment," said Ben Cheah, director of sales operations at ResMed. "Our customers have told us that they are concerned that this trend will put pressure on their ability to provide appropriate patient care."

At SeQual, an HME supplier that desires to sell the company's products must become an "authorized dealer." To become authorized, HME suppliers must:

-- Sell SeQual products at a price determined by SeQual.
-- Track all products sold and rented on a quarterly basis.
-- Contact patients to notify them of software upgrades and product enhancements.
-- Offer service on the product, or sell a service package offered by SeQual.

The policy also establishes a unilateral pricing policy as a guarantee that service will be provided on SeQual products. Buyers are prohibited from marketing or selling the product below a "suggested advertising price." Schemes for selling SeQual products cheaply are prohibited.

On the Internet, sellers can use only those graphics and text authorized by SeQual. Sales of the company's products on auctions sites, such as eBay, are prohibited.

Richard expects that Internet sales are bound to rise as savvy consumers shop from home and products like the Eclipse become better known to consumers.

"Manufacturers are going to be challenged in the future by having to deal more and more with patients, particularly on the service side," he said.