Today (6 Jan 2021), Henry Schein, a top global medical, dental, and veterinary solutions provider / distributor with a global presence, announced its acquisition of a majority ownership position in Prism Medical Products, one of the top US DME (durable medical equipment) providers focused on shipping products to the home.
Recent forays into this space by Organogenesis and other product-service hybrid moves, as well as expansion and increased activity from some major SNF wound care supply-services firms, make this one of the more dynamic (though less publicly discussed) growth areas in the AWC (advanced wound care) commercial ecosystem.
With a nearly $10B market cap (at the time of this writing), Henry Schein is right up there with Cardinal Health, McKesson, Medline, Owens & Minor, etc. in terms of its distribution scale and presence, albeit focused on private medical, dental, and veterinary care customers in private practice as opposed to hospital, SNF, and other care settings. Traditionally, Henry Schein often focused on more generic / commodity medical products (often tending to be more specialized across dental). However, post deal, the company will now have a hand in a lot more distribution of wound, ostomy, and related specialty product lines.
Following this deal, now virtually all of the major medical product distributors have a home healthcare DME presence:
- Cardinal – acquired AssuraMed (the parent company of Edgepark Medical Supplies) for $2.07B in 2013
- McKesson – acquired Sterling Medical in 2006, with other relevant acquisitions (such as home infusion, etc.) in subsequent years
- Medline – acquired medical billing firm PFS in 2017 to bolster their existing DME business
- Owens & Minor – acquired Byram Health Care for $380M in 2017
- Henry Schein – has now entered the space with this Prism deal
For those less familiar with the intricacies of the wound care / DME space, Prism and firms like it typically act as a third party biller, submitting bills and supporting documentation directly to payers, while facilitating fulfillment of orders for wound care, ostomy, incontinence, breast pump, and other supplies. Most of the top global AWC and related (medical compression, etc.) brands are distributed by Prism Medical Products and similar firms, including 3M-KCI, ConvaTec, Coloplast, Medline, Smith & Nephew, and many more. There are also commercial incentives to build out and commercialize private label AWC brands within the DME space, with several firms doing so successfully.
Although is not typically encountered in hospital-based settings (even outpatient ones), they are a massive force in freestanding private clinic settings, where a material proportion of advanced / chronic wounds are treated in the US and overseas. Not to mention…Guess which wound clinic type was the fastest growing in 2019-2020, and into 2021 and beyond?…
We’d love to hear your take on this important wound care corporate M&A development. Or maybe you’re interested in discussing how product-service strategies can help you differentiate in this crowded space, and learn the best practices (and most dangerous mistakes to avoid).
Contact us to discuss your unique wound care business situation. Most importantly, don’t get hit with bad wound care business decisions.