Research Question: Is competitive bidding and increased competition leading to a decrease in market share for industry leader ResMed?

Companies: ResMed (RMD), Invacare Corp. (IVC), Phillips Resperonics Inc. (PHG)

1. ResMed’s challenges moving forward include the potential for a 30% cut in reimbursement due to the U.S. government’s competitive bidding process, which will be compounded if private insurers follow suit. Additional challenges for ResMed include the launch of new products from competitor sleep apnea equipment manufacturers and tighter restrictions for sleep apnea mask replacements that are beginning to be implemented by Medicare.
2. To address the growing demand for lower cost care in chronic sleep disease conditions, ResMed is planning on expanding its product portfolio with additional sleep therapy systems, leveraging existing business channels and establishing new ones.
3. According to ResMed, the company’s mask business experienced strength across all categories in Q4, continuing to take market share from competitors, particularly with its Mirage nasal mask. Additionally, ResMed’s accessories business experienced improved efficiency in replenishment of its supplies.
4. A connection between sleep apnea and heart disease is evolving very rapidly, potentially expanding the clientele ResMed and its competitors can serve. People with cardiovascular problems such as high blood pressure, heart failure, and stroke have a high prevalence of sleep apnea.