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Inogen Selling Direct to Consumers; An Act of Desperation?

Posted by Bob .. Patient Expert

TheInogenOne was a revolutionary product when it was introduced. Due to the high cost of this new technology, many oxygen providers took a wait and see position before embracing theInogenOne.

Early problems and a recall didn’t help theInogenposition with established oxygen providers. Such occurrences are not uncommon with new equipment and technologies. Through time theInogenOne has proven a top quality, reliable portable oxygen concentrator (POC).

A second battleInogenhas had a tough time dealing with is the fact the unit is a pulse dose only delivery system. The medical community changes very slowly and the perception prior to the introduction of theInogenOne was that pulse dose oxygen delivery systems would not keep patients saturated with oxygen while sleeping.Inogenhas clinical trials that show theirPOCis effective at maintaining satisfactory blood oxygen levels during sleep. As I said, the medical community changes slowly though. It doesn’t help that pulse dose systems for compressed gas and liquid oxygen systems are unreliable at best.

In March 2007,Inogenreceived $22 million in venture capital. A month later, respiratory giantRespironicsreleased theirPOC, theEverGo.Sequalalso began to gain ground with their offering, the Eclipse, which is the onlyPOCto offer continuous flow.Invacareis releasingtheirXPO2 in May 2008.Airsephas had 2POCs, the Freestyle & Lifestyle, out for some time. The market has no shortage ofPOCchoices.Inogenis the only company that doesn’t have any other product offerings, though. This lack of diversity has angel investors worried. Combine the increased competition with an uncertain reimbursement future, shrinking reimbursements along with the high cost of thePOCunits and you wonder whether a stand-alonePOCmanufacturer can weather the storm.

When I heard the news thatInogenwas selling direct to the consumer, I contacted them by phone and verified the news. I was shocked, to say the least. I spoke to sources atRespironicsandVGMAssociates who echoed my initial thought thatInogenstarting to sell direct to the consumer is most likely a last act of desperation by a company having trouble competing in the current marketplace. This move byInogenwill alienate the company from the established medical supply companies.Inogenisn’t likely to recover those lost relationships once they are severed. In the long run, this move will cost thePOCinnovator. It will devalue their company even in the event of a sale to a larger entity due to theanimositythis move will certainly cause with providers.

I’m sure the Inogen One will continue in the marketplace. I’m equally as sure Inogen as a company will not. The Inogen One is a fine oxygen delivery system. Too bad Inogen’s business plan and execution haven’t been up to par with their product.

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Buyer Beware if you are considering Inogen We just "wore out" our 2nd unit with a total of 452 hrs total! What a deal for a $5,000,00 package
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