Medical Equipment & Supply Wholesalers

Brief Excerpt from Industry Overview Chapter:

Companies in this industry distribute professional medical equipment, instruments, and supplies on a wholesale basis to physicians, hospitals, and extended care facilities. Major US-based companies include Henry Schein, Owens & Minor, Patterson Companies, and PSS World Medical. National distributors generally participate in international markets, especially in Europe and China.

The US medical equipment and supplies distribution industry includes about 7,000 companies with combined annual revenue of about $130 billion. Moderate growth is forecast for the next two years. Key growth drivers include demand for medical treatment, which is expected to increase as the population ages and more people receive health insurance.

COMPETITIVE LANDSCAPE

Demand depends on the number of people in the US receiving medical treatment. The profitability of individual companies depends on merchandising and efficient delivery systems. Large companies have economies of scale in purchasing, and highly developed infrastructure that allow for efficient distribution. Small companies can compete effectively by specializing in a product line or servicing a local customer base. The industry is capital-intensive: annual revenue per employee is about $700,000. The industry is concentrated: the top 50 companies account for about 70 percent of revenue.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products include medical and surgical instruments and equipment (about 45 percent of revenue); supplies (about 40 percent); and dental equipment and supplies (about 5 percent). Other products include orthopedic and prosthetic appliances, and veterinary supplies. Some companies carry over 90,000 stock-keeping units (SKUs) while others specialize in...