Study: Sleep labs increase CPAP, mask sales

Sunday, January 22, 2006

YARMOUTH, Maine - The number of sleep centers selling CPAP directly to patients is expected to double over the next 12 months, according to a new survey published by Wachovia Securities.

Ninety sleep centers participated in the survey.

Currently, around 15% of sleep centers sell masks and CPAPs with the remainder referring patients to a home medical equipment provider. Around 15% of sleep centers plan to start selling equipment directly within the next 12 months, a positive development for both Respironics and ResMed, which have established relationships with physicians and sleep centers. Additionally, sleep centers are more likely to provide patients high-end equipment and are less price sensitive than HMEs, Wachovia stated in the survey.

The trend toward more sleep labs selling masks and CPAPs bodes well for Respironics and ResMed, in part because of increased brand-specific prescriptions. Brand specific CPAP prescriptions account for 47% of prescriptions, according to Wachovia, up from 29% of prescriptions in its previous survey. Brand-specific mask prescriptions account for roughly 64% of total prescriptions compared to 62% in the previous survey.

Over the next 12 months, the survey's results suggest that Respironics will lose about 2% of its CPAP prescription share (currently about 51%) to smaller firms Fisher & Paykel and Puritan Bennett. ResMed should maintain its CPAP share (about 31%). Similarly, in masks, data suggests slight prescription share losses for Respironics (currently about 37%) while ResMed is expected to maintain its 37% share. Since HMEs select equipment for patients without brand-specific prescriptions, prescriptions are only part of the picture, Wachovia stressed.

The survey also reported:

-- There are approximately 118,400 respiratory therapists in the United States and roughly 80% are employed in hospitals' respiratory care, pulmonary care, and anesthesiology departments. The remaining 20% of sleep therapists work in physicians' offices, HME providers, home health care services, and nursing homes, according to the Bureau of Labor Statistics. Additionally, there are more than 2,800 sleep centers in the United States, according to Frost & Sullivan.

-- Respondents saw bed growth of 21% during the past 12 months and reported an average of 12.9 beds per respondent versus 10.7 beds per respondent 12 months ago. Respondents expect greater sleep center capacity expansion in 2006 (31% to 16.9 beds per respondent) than seen in 2005 (21% to 12.9 beds per respondent).