Document 6539566

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Many data and information resources were used as points of reference by the publishers to produce
the Medical-Surgical Distribution Market Overview. Furthermore, personal viewpoints and opinions
are expressed throughout the research. Knowledge Source, Inc. has not received compensation that is
directly or indirectly related to the personal viewpoints and opinions expressed. • 
Though every effort has been made to accurately report data and information about company
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attention, so they may be corrected in future editions.
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All contents within BusIntell Reports are protected by Knowledge Source, Inc. copyright: ©
Copyright 2013; all rights reserved. No part of this product may be reproduced, in any form or by any
means, including but not limited to photocopying or storage in any information storage or retrieval
system, without written permission from Knowledge Source, Inc.
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Knowledge Source, Inc. is an affiliate and the market research company of Bentelligence.
Bentelligence offers innovative healthcare market research, strategic direction and business
intelligence to help clients understand their markets and stakeholders. Bentelligence’s primary
mission is to provide actionable deliverables, using highly experienced talent and data sources that
are targeted, accurate and timely. The company works with leading pharmaceutical and device
manufacturers, health plans and other organizations working in the healthcare industry today and
boasts a proven track-record of success. 2
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Industry Overview– pgs. 5-19
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Background – pgs. 5-6
Customers - pg. 7
Products – pg. 8
Industry Participants – pg. 9
Growth –pgs. 10-13
Medical Device Tax – pgs. 14-16
Pricing – pg. 17
Generic Medical Devices – pg. 18
PODs – pg. 19
Company Profiles – pgs. 20-55
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ADCO Medical – pgs. 20-21
Advanced Medical Sales – pg. 22
Aero-Med – pgs. 23-24
Alliance Surgical Distributors – pgs. 25-26
American Medical Depot – pgs. 27-30
Buffalo Hospital Supply Co. – pgs. 31-33
Cardinal Health – pgs. 34-43
Centurion Medical Products – pg. 44
Claflin Company – pgs. 45-48
DeKroyft-Metz & Co. – pg. 49
First Choice Medical Supply – pgs. 50-52
Grogan's Healthcare Supply – pgs. 53-55
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Company Profiles – pgs. 56-113
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Healthcare Supply Solutions – pgs. 56-57
Henry Schein, Inc. – pgs. 58-63
Home Healthcare Solutions – pgs. 64-65
Kreisers Inc. – pgs. 66-67
Laboratory Supply Company – pgs. 68-70
McKesson Medical-Surgical – pgs. 71-76
Medical Action Industries – pgs. 77-79
Medical Specialties Distributors, LLC – pgs. 80-82
Medline Industries, Inc. – pgs. 83-85
Metro Medical Equipment & Supply – pgs. 86-87
Metro Medical Supply Inc. – pg. 88
Midland Medical Supply – pg. 89
Midmark Corporation - pgs. 90-92
MMS - A Medical Supply Company – pgs. 93-95
Mohawk Hospital Supply – pgs. 96-97
Owens & Minor Inc. – pgs. 98-102
Patterson Companies – pgs. 103-104
Professional Hospital Supply - pgs. 105-106
Seneca Medical – pgs. 107-108
Shared Service Systems – pg. 109
H.D. Smith – pgs. 110-113
Sources – pg. 114
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Leading medical-surgical distributors include the following:
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Distributor
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Cardinal Health
Owens & Minor Inc. Henry Schein, Inc.
Medline Industries
Patterson Companies McKesson Medical-Surgical
- PSS World Medical H.D. Smith
Medical Action Industries
MMS – A Medical Supply Company
Midmark Corporation Centurion Medical Products
Laboratory Supply Company
Professional Hospital Supply
Claflin Company
Estimated Annual Revenue
($ millions) Estimated # Distribution
Facilities
$9,600
$8,908
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NA
NA
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40+
48
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Since 1992, when it sold the wholesale drug division, OM’s operations in the United States have been focused
on medical and surgical supply distribution and other supply-chain management services. • 
Owens & Minor Inc. 9120 Lockwood Boulevard • 
Mechanicsville, VA 23116
804-723-7000
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http://www.owens-minor.com
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Owens & Minor, Inc. and subsidiaries (OM) is a Fortune 500 company providing distribution, third-party
logistics, and other supply-chain management services to healthcare providers and suppliers of medical and
surgical products, and is a leading national distributor of medical and surgical supplies to the acute-care market in
the United States. In the European market, the company has a leading position as a provider of third-party
logistics (3PL) services to manufacturers and suppliers of healthcare and life-science products.
OM has significantly expanded and strengthened its national presence through organic growth and acquisitions.
The OM HealthCare Logistics (OM HCL) third-party logistics service was launched in 2010 and began offering
transportation, warehousing and order-to-cash services to manufacturers. On August 31, 2012, OM acquired the
Movianto Group, an established European third-party-logistics provider, for approximately $157 million. For the
fourth quarter of 2012, Movianto represented 5.5% of OM’s consolidated revenue.
OM’s core domestic business consists of the distribution of finished medical and surgical products, including its
private label line, to approximately 3,600 healthcare providers in the United States, primarily to the acute-care
market. OM procures these products from nearly 1,300 suppliers and distribute from 48 distribution centers. In late 2011, OM established a sourcing unit in China that conducts sourcing activities, quality assurance,
logistics and transportation of products for our private label line. In serving customers, OM also provides a range
of data analysis tools and outsourced resource management and consulting services, such as inventory, supply
spending and contract management, as well as low-unit-of-measure shipments and tailored deliveries. In certain
cases, OM also performs distribution and supply-chain management services on an outsourced basis from
facilities that are owned by customers. OM typically provides distribution and supply-chain management services under contractual arrangements of
varying lengths and terms with hospitals, hospital-based systems, large integrated healthcare networks, and
alternate-site providers. The majority of OM’s revenue is derived from the distribution of consumable medical
and surgical goods to these healthcare providers. In addition, OM enters into fee-based service contracts of
varying lengths and terms to provide consulting and outsourcing services to the healthcare market. 6
Through its distribution model in the United States, OM purchases a large volume of medical and surgical
products from suppliers, stores these items at its distribution centers, and provides delivery of these products
and related services to healthcare providers. • 
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In order to support its private label line of products, OM also operates a sourcing joint venture in Shanghai, China
that conducts sourcing activities, quality assurance, logistics and transportation of these products to its
distribution centers.
OM has 48 distribution centers located throughout the continental United States that generally serve hospitals and
healthcare providers within a 200-mile radius, delivering most supplies with a fleet of leased trucks. OM
customizes its product deliveries, whether the orders are “just-in-time,” “low-unit-of-measure,” pallets, or
truckloads, and we also customize delivery schedules according to customers’ needs, to increase their efficiency
in receiving and storing the product. The OM Solutions SM team provides outsourced resource management and fee-based consulting services, which
make use of its proprietary supply-chain management programs and technologies, to acute-care providers. OM
Solutions deploys experienced analysts and project managers to provide these services under structured but
customizable programs that are designed to improve the provider’s supply chain through more efficient
management of inventory, supply spending and supply chain processes.
OM’s domestic supply-chain management offerings are supported by a significant investment in information
technology infrastructure and services. OM uses a variety of software and information technology systems to
support its business needs and efficiently manages its business growth, including warehouse management
systems, customer service functions, and demand forecasting programs. OM employs a number of customer-facing technology solutions, including OMDirect SM , an Internet-based
product catalog and direct ordering system that facilitates commerce with customers and suppliers. OM also
provides a tablet-based ordering application for use by its physician-practice customers to place their typically
smaller orders.
OM offers customers a broad portfolio of products and services. Distribution of medical and surgical supplies to
healthcare providers, including the MediChoice ® private label product line, account for over 95% of Domestic
segment revenues. Additional services include logistics, supplier management, analytics, inventory management,
outsourced resource management, clinical supply management and business process consulting. 7
OM currently provides distribution, outsourced resource management and/or consulting services to
approximately 3,600 healthcare providers in the United States, primarily hospitals in the acute-care market. • 
OM also serves the federal government, including the U.S. Department of Defense, as a prime vendor for medical
and surgical supply distribution services. On a more limited basis, OM serves alternate-site providers, including
ambulatory surgery centers, physicians’ practices, clinics, home healthcare organizations, nursing homes and
rehabilitation facilities. OM also provides distribution and supply-chain management services, including thirdparty logistics and business process outsourcing services, to suppliers of medical and surgical products.
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In addition to contracting with healthcare providers at the IHN level and through GPOs, OM contracts directly
with individual healthcare providers, including surgery centers and physicians’ practices, and smaller networks of
healthcare providers that have joined together to negotiate terms.
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OM offers its products through its uniquely, non-competitive partnerships with leading health care products
manufacturers and through our own quality, cost-effective private label product line, MediChoice®. MediChoice® is Owens & Minor's line of medical and surgical products developed in partnership with leading
manufacturers to help meet patient-care needs and address budget concerns. MediChoice® Product Portfolio
includes:
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Anesthesia
Apparel (Patient)
Apparel (Staff)
Central Supply
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Diagnostics
Equipment Gloves
Kits & Trays • 
Maternity & Nursery Nursing
O.R. Products
Orthopedic Rehabilitation
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Patient Care
Respiratory • 
Additional offerings include: • 
PANDAC® is an operating room-focused inventory management program.
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SurgiTrack® is a customizable surgical supply service. • 
OMSolutions is a supply-chain consulting, customer technology and resource management service offering. • 
WISDOM Gold is online supply spend management, data normalization and contract management solution.
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Clinical Supply Solutions is an inventory and contract management service. • 
Implant Purchase Manager is a technology-based service. • 
OM HCL is an offering of customized third-party logistics and business process outsourcing services.
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OM’s 2012 revenue were approximately $9 billion.
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($000) 2012
Net revenue
$8,908,145
Income from continuing operations $109,003
Net income
$109,003
2011
$8,627,912
$115,198
$115,198
2010
$8,123,608
$110,579
$110,579
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Owens & Minor announced that, effective August 31, 2012, it has completed the previously announced
acquisition of the majority of the Movianto Group, a leading European healthcare third-party logistics (3PL)
business, from Celesio AG, for approximately €130 million. The acquisition, which was funded by available
cash, is expected to be dilutive to earnings per share in 2012, neutral in 2013 and accretive thereafter.
Movianto serves pharmaceutical and medical device manufacturer customers globally from 23 logistics
centers in 11 European countries with approximately 1,800 teammates, providing warehousing,
transportation, and cold chain logistics, as well as value-added services such as order-to-cash, repackaging
and relabeling of products. Movianto's operational capabilities and services are highly complementary to
those of OM HealthCare Logistics, Owens & Minor's domestic healthcare 3PL service, and the combination
will enable Owens & Minor to offer healthcare manufacturers in the U.S. and Europe expanded global reach.
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University Hospitals is driving its distribution center from the suburbs into Cleveland, in the first major
example of the health system's long-discussed plan to use its spending power as a prod. • 
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Owens & Minor has agreed to move its Glenwillow operations to city-owned land near East 55th Street and
Interstate 90. A North Carolina developer will buy part of the site, lease the rest and construct a 75,000-squarefoot distribution center there by spring 2014.
Three years ago, when public and private partners announced plans to create a Health-Tech Corridor in
Cleveland's Midtown neighborhood, University Hospitals, the Cleveland Clinic and Case Western Reserve
University pledged to push their vendors into city neighborhoods. At the time, Steve Standley, UH's chief
administrative officer, said, "You need to move into the city, or we will find somebody who will.”
Since then, UH has placed offshoots, including its Rainbow Care Connection and the UH and CWRU Cleveland
Eye Bank, in the new MidTown Tech Park building on Euclid Avenue. Those deals are much smaller than the
Owens & Minor move, which will bring the hub of UH's supply chain -- from gauze to medical implants -- to
land overlooking Lake Erie. Heidi Gartland, UH's vice president of government relations, said the hospital system
needs more storage than it has in Glenwillow. OM leases a 60,000-square-foot building in the southeastern suburb and dedicates most of it to UH. ValleyCare
Health System of Ohio and Robinson Memorial Hospital in Ravenna use the rest of the space.” Neither UH nor Owens & Minor would discuss the terms of the companies' contract. Dean Huibregtse, area sales
director for Owens & Minor, described the relationship as a partnership that started more than six years ago and
continues to grow. Workers at the Glenwillow facility take in shipments from UH suppliers and sort, package and
load supplies for daily deliveries to the health system's various medical centers. Off-site distribution means UH can use more of its space for patients instead of storage. Channeling supplies
through a single facility gives the health system a better sense of its inventory and costs.With a new, tailor-made
building, Owens & Minor will be able to handle more costly, nontraditional items like medical implants and
special orders for surgeons.
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