Bigger is Better?
Sizing up the IVD Industry

All of us in the health care delivery business have been trying to cope with the changes brought about by global health care reform. Although health care costs have appeared to stabilize in the short term, a remarkable wave of consolidation has been occurring for the past several years, both on the customer side and on the side of the manufacturer.

Manufacturers such as DPC have been forced to systematically reassess strategies to keep in sync with the changes that we are experiencing in the marketplace. As a customer-focused organization, we continually observe how our direct customers are interacting with their own customers, other suppliers and each other, so that we can fine tune our product and service offerings both now and in the long term.

One of the most significant recent events has been the wave of mergers that seems to be sweeping the in vitro diagnostics (IVD) industry. The acquisitions of Boehringer Mannheim by Roche, and Coulter by Beckman, have created a new cadre of competitors whose sheer size now rivals or exceeds that of the Diagnostic Division of Abbott. But the question remains: Is bigger necessarily better? We think not.

Although the one-stop shopping approach has obvious benefits, there are substantial drawbacks, too. Choice has always been a foundation of our health care system, and customers like yourself tell us that they feel short-changed when they are contractually obligated to a broad product offering that consists of less than "world class" products. We believe that there is still plenty of room for the so-called "best of breed" strategy in which a company such as DPC is in a position to offer you the finest immunoassay products in the industry. By avoiding the herd mentality that is prevalent at this time, DPC has been able to remain highly focused on rapid product development and an ever increasing level of service. As customers, you must believe in this strategy too, since you have helped us outgrow both the market and our competitors for the past five years. This increase in relative market share has catapulted DPC from a supplier of RIA kits to a worldwide player in the automated systems arena. We thank you!

Another side of the merger and acquisition story is that of imperiled customer service. We have stood on the sidelines as companies merge, and have observed that confusion seems to reign supreme as companies attempt to meld widely diverse cultures into a new corporate entity. Often, the reassignment of field and internal service personnel can be disconcerting when customers have a problem and no longer know whom to call. Morale can falter as employees worry over layoffs, and certainly in the short term it is the customer who suffers.

DPC will continue on its chosen path and, with your input, it will be our mission to market innovative instrument platforms and immunoassays that will help you, the customer, to remain competitive in your own health care markets. Let us know what you think.