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Diabetes Care Club buys back into game

Diabetes Care Club buys back into game

FRANKLIN, Tenn. - Now that Diabetes Care Club has acquired Priority Diabetes Supply, a contract supplier, the playing field for the national mail-order program has been set, say industry watchers.

Ever since the list of contract suppliers was released in April and Diabetes Care Club wasn't on it, the provider was rumored to have been looking to buy back into the market.

“The usual suspects are going to remain in this space,” said Kevin Palamara, a managing director with Provident Healthcare Partners. “It's no surprise they chose to acquire one of the winning bidders in an effort to maintain their ability to service their patients.”

The deal should enable Diabetes Care Club to maintain its position as one of the top mail-order providers. In 2011, Medicare paid Diabetes Care Club more than $38 million for test strips, according to the HME Databank, behind only CCS Medical (nearly $45.5 million) and Liberty Medical (nearly $190 million).

With several million beneficiaries expected to be affected by the change, Diabetes Care Club, and other large contract suppliers, could gain several hundred thousand patients each.

“A lot of substantial patient bases need to find a new home very quickly,” said Palamara.

The biggest challenge now for Diabetes Care Club—indeed for all 18 of the mail-order contract suppliers—is maintaining a product mix that's profitable while offering beneficiaries choice, says Palamara. With an average reimbursement cut of 72% for diabetes supplies, that's a tall order.

Diabetes Care Club also announced it will partner with Roche Diagnostics to distribute its Accu-Chek line of products. CCS has previously said that it will partner with LifeScan. Still, others predict a sea change in the products provided to beneficiaries.

“Anybody who is going to want to be in this business has their Taiwanese or Chinese products,” said one source. “They think they will maintain margins by switching beneficiaries to generics.”


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