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New German Health Minister Takes Aim At Traditional Pharma Companies.

Newly appointed German Healthcare Minister Philipp Roesler – liberal – Free Democratic Party in likely move to break big pharma stronghold and submit new products to insurance pricing scrutiny and impose an “efficiency and clinical effectiveness /outcomes” pricing performance ratio.

Not totally dissimilar to the British NICE economic and clinical effectiveness system.

Sign of the times perhaps to introduce new effectiveness and economic liberalization in the DME (durable medical equipment) sector of the ever increasing homecare industry.

Maybe not – Roesler is clearly risking his parties popularity as a junior member in Chancellor Angela Merkel’s Christian Democrat Party.

Bridgepoint will be concluding the acquisition of UK care services provider Care UK.

Care UK provides care services through it’s facilities as well as in the growing home care sector. In addition they are a provider of NHS Walk-In centers. The acquisition is valued at 309 million Euro (about 460 million US Dollars).

Jamie Wyatt, director responsible for Bridgepoint’s UK healthcare investment activity, said, “Today’s offer is a fair one that comes with the unanimous recommendation of the independent directors of Care UK to the Care UK shareholders, and which will allow Care UK to accelerate growth and undertake selective acquisitions in a way that it was unable to as a quoted business.”

As an aside this compares in several ways with the 920 million US Dollar investment that Blackstone made to take (homecare services provider) Apria private in the USA. We wrote about this last year “Why Invest In Homecare? – Revisited – Blackstone Bids For Apria“.

Of course Care UK and Bridgepoint will continue to be going up against the likes of the agile and behemoth Bupa who is also not sitting still.

To view other Bridgepoint healthcare investments click here and adjust the tab.

With the age and population demographic being so favorable, these types of deals in services and facilities will only continue.

Frank Barlin is Managing Partner at Sibaya LifeScience!

Here is a thread from The BMJ where NHS physicians enter into the argument of the value (moral, ethical and commercial) of medical (pharmaceutical) sales reps.

The original letter from Dr Shane O’Hanlon starts like this:

It was switching to decaffeinated coffee that started it all. In a flash of lucidity I realised the dubious ethical basis for drug company representatives’ courtship of doctors.

Doctor – Sorry to say but so long as anybody works for money, including doctors, they could be asked the same thing. Doctors are very quick to court sales people when they “need” something. Medical Journals are quick to solicit and accept drug company advertising, and there is nothing wrong with that. It is also very ethical.

It becomes unethical when the conversation between a doctor and a sales rep concerning a product or service cannot be published in the local newspaper – that’s the acid test. In 99% of cases it can be.

The argument is the same one that has been made for years and usually ranges from “I don’t like them, they waste valuable time, they are (yes) commercial” etc.

The counter argument is that in fact the medical sales rep does provide a service – even if it is to only alert the doctor to a new product so that he or she can go and do their own research (which is what hopefully they do anyway).

Obviously there are good and bad sales people (and doctors) in every industry. I am making an assumption that most are good, so here goes.

Doctors, you get what you deserve – many of you treat appointments with sales reps with little respect for the content of their message (after having kept them waiting way past scheduled (and cancelled) appointment times). Even when the sales person is finally in front of many of you – you look at your watch and say “you have two minutes” as you continue to click on the keyboard.

If you have pre-determined that the sales rep will have nothing useful to say – then why agree to the appointment in the first place?

Without a doubt there are medical / surgical sales reps that are way better trained on a particular subject than the doctor is. This is of course the reason why so many sales people are invited into the OR (Operating Theatre) to explain the use of complex, and often life saving medical devices.

It is true that with modern media there are now improving ways of getting the message across to the doctor, which is good for all. In the mean time next time you the doctor complains or is rude to a sales rep – think first about the value of pharmaceutical and medical companies, especially when you demand samples of products, a demonstration, or support for an important clinical trial that you are going to publish.

Pharmaceutical companies – make sure you have the right message and you are sending it in the most effective way.

(To all the pharmaceutical representatives out there looking for a job – rest assured that you have great value. If you can succeed and survive selling into the hospital jungle – you can excel anywhere).

Reimbursement pressures subside in France – French homecare market a growth opportunity – cautious optimism…

Bastide, a French public traded homecare provider reports revenue up move of 3,5% Q2 2009 – 2010. This follows the troublesome legislative change in “les Etablissements d’Hébergement pour Personnes Agées Dépendantes (EHPAD)” (read Institutional reimbursement), the negative effect of which appears to have leveled off. In addition the regular homecare sector has continued it’s positive trend.

BASTIDE: Interim Results 2009-2010 & Resumption of growth in 2nd quarter)

Résultats semestriels 2009-2010 (Euronext)
(01/03/10 07:30 CET)

BASTIDE LE CONFORT MEDICAL

Résultats semestriels 2009-2010

Reprise de la croissance au 2ème trimestre

En K€ 2008-2009 2009-2010 Var.
Chiffre d’affaires 1er trimestre 24 427 22 782 - 6,7%
Chiffre d’affaires 2ème trimestre 26 846 27 778 +3,5%
Chiffre d’affaire 1er semestre 51 272 50 560 - 1,4%
[Read more →]

There is no doubt that with the strengthening dollar, costs for homecare products are set to rise in Europe. Most manufacturers and distributors of wheelchairs and other homecare products extensively source wheelchairs or components from China, where products are usually procured in US Dollars.

A quick glance at a ten year chart will show that a 10% or more swing in a relatively short time is not outside of the realm of possibility. It is also interesting to note the close linking of the Yuan (despite the US wish that that it will be allowed to float more in the future).

Of course with the largest revenues derived from Government reimbursement business, increasing prices is not going to be that easy. So it seems that the industry may be in for another round of restructuring, standardizing on lower featured products, or perhaps worse.

There are of course better ways to run sourcing and supply chain operations that are mostly dependent on China, but in an industry largely driven by cost, many companies have largely ignored these options – maybe at their peril.

Here is Business Week’s take on the fluctuating exchange rates.

Dollar Rises for Sixth Week Versus Euro After Fed Rate Increase – BusinessWeek.

Frank Barlin is Managing Partner at Sibaya LifeScience!

Are hospitals who limit ties with drug companies at a competitive disadvantage? | KevinMD.com.

KevinMD asks an interesting question, and goes on to summarize:

In a lot of ways, this is similar to the college recruiting of athletes. Schools that have rigorous academic requirements put themselves at a competitive disadvantage athletically. The same could be said for hospitals, who risk driving away doctors by limiting their ties with drug companies.

My own take is simply “absolutely not”.

On the related posts several other drug company / physician ethics / commercial questions are raised.

Press Release:

Handicare takes the next step to success

2 February 2010 – Midlands based Stairlift manufacturer Minivator has signed a deal to become the latest member of the family of companies in the Norwegian based Handicare, subject to regulatory approval.

Previously owned by its Directors and Gresham PE, Minivator Group has had an exceptional growth record, indeed it continued to experience double digit growth throughout the testing economic climate of recent years. With a core product range of stairlifts Minivator has expanded its presence establishing operations in North America and Germany and have recently started its own manufacturing base in the Far East. It has seen expansion within the UK having taken on new premises at least four times in the last three years.

As one of the world’s leading manufacturers of stairlifts with a turnover of approx. 55 million Euro, and 420 employees selling to over 35 countries the Minivator Group was a desirable prospect for many companies. The board were in no rush to sell, choosing instead to spend time finding the perfect partner to move forward with. They found such a match with the Handicare Group. Minivator CEO Mike Lord commented “We were looking for a buyer who not only made sound business sense but who was also a great fit with the culture and values that Minivator holds at its core. We are delighted with the deal and are looking forward to seeing what the future holds. We believe exciting times are ahead and being part of a larger and well established group that holds similar ethical beliefs will open up many opportunities that will be mutually beneficial and rewarding.”

The healthcare company Handicare AS, owned by Herkules Private Equity Fund1, was founded in 1986 and has operations in technical aids like wheelchairs and home care products in addition to adaptation of cars for elderly and physically disabled people. Through its subsidiary Puls, the Group also has a leading position in Norway in the sales of capital goods and consumables to hospitals and institutions. Handicare has its headquarters in Moss, Norway, and has subsidiaries in Sweden, Denmark, Germany, the Netherlands, England, Belgium, Poland, USA and Canada, and distribute its own products to an additional 30 markets. Handicare has just shy of 1000 employees and reached sales over 250 million Euro in 2009.

Handicare CEO Per Gunnar Borhaug explained “Handicare has grown both organically and through the acquisition of successful companies that had the same drive as Handicare: the desire to provide excellent products and services that help improve the quality of life for the less able, the elderly and those who care for them. Having identified Minivator Group as a financially promising acquisition target we were delighted to find that they had the kind of culture that would fit right in with Handicare’s other companies.”

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For further information concerning this press release please contact:

Per Gunnar Borhaug, CEO Handicare, +47 69 24 44 28

Mike Lord, CEO Minivator, +44 (0) 1384 40 87 00

[1] Herkules Private Equity Fund 1 is an investment fund with Euro 250 million in capital from 25 Norwegian and international investors. Herkules Capital has in total 1,4 bill Euro under its administration. HPEF has a financial strength which enables them to take a dominant position of ownership in well-established companies with a potential for further growth. Herkules acquired Handicare in July 2005 and has during the latest three years tripled the size of Handicare and is aiming for further growth.

More about Handicare over time on this blog