Skip to Content

Arriva buys rival company

Arriva buys rival company

CORAL SPRINGS, Fla. - Arriva Medical may have finally arrived at the top of the heap in the mail-order market for diabetes supplies.

The provider, a contract supplier for Medicare's national mail-order program, has acquired Nashville-based Simplex Healthcare, the parent company of Diabetes Care Club, also a contract supplier.

“They've been on a buying binge over the past two years and they are doing a great job of scaling their business,” said Jonathan Sadock, managing partner/CEO of Paragon Ventures.

Binge, indeed. Since early 2012, Arriva has bought Direct Diabetic Source, AmMed Direct, and the diabetes supply businesses of NationsHealth and Liberty Medical.

With reimbursement for mail-order diabetes supplies slashed, on average, 72%, as part of competitive bidding, buying is the only way to grow, say analysts.

“When you take that much of a reimbursement hit, revenue declines substantially,” said Patrick Clifford, managing director at The Braff Group. “Scale matters. You have to make acquisitions—you can't do it bringing on new patients one at a time.”

Until now, Simplex seemed to be positioning itself for growth in the mail-order market. After failing to secure a contract, it acquired contract supplier Priority Diabetes Supply in June. In September, it inked a deal with Neurometrix to distribute its pain management system geared toward diabetes patients.

Liberty Medical was the No. 1 Medicare provider of diabetes supplies in 2012, receiving more than $150.5 million in reimbursement; Arriva was No. 2, with nearly $43 million; and Diabetes Care Club was No. 5, with nearly $31 million, according to the HME Databank.


To comment on this post, please log in to your account or set up an account now.