McGaw Signs Distribution Agreement

McGaw Inc. announced Monday that it has signed a four-year agreement valued at $45 million with Block Medical Inc. of Carlsbad to distribute Block’s disposable intravenous therapy products to the home-health-care industry.

The agreement comes six weeks after an investor group led by James Sweeney, an Irvine health care entrepreneur, completed its acquisition of Irvine-based McGaw for $200 million. McGaw, formerly Kendall McGaw Laboratories Inc., is a manufacturer of medicated and nutritional fluids and drug-delivery products.

The agreement would make McGaw the largest of 13 distributors of Block’s line of disposable intravenous home systems, said Gregory Sancoff, Block’s president. In return, Block would have access to McGaw’s 220 sales representatives nationwide, he said.

For McGaw, the agreement is an effort to expand its distribution business and take advantage of opportunities that come its way, Sweeney said.

“While we play an integral role in assisting the home-care industry as a supplier, we have no intentions of becoming a home-care provider, so our customers will always have access to the most advanced products available,” he added.

The home-health-care industry is expected to grow 25% to 30% annually, Sweeney said, while hospital care is expected to grow 6%. Home care is becoming an increasingly popular alternative to hospital treatment because it is generally less traumatic and less costly for patients than hospital care.

Under the agreement, McGaw will distribute Block’s Homepump, which consists of a tennis ball-sized bag that automatically pumps intravenous fluid to a patient. The bag provides much greater mobility for patients, eliminating the need for them to remain in one place while receiving intravenous medication.

A McGaw spokeswoman said the company hopes to target an estimated 225,000 patients who need home intravenous therapy each year, many of them cancer and AIDS patients.

McGaw and Block are also exploring other distributorship agreements with companies in Japan, Canada and Eastern Europe.