Luther Medical Links Up With Purchasing Group

Luther Medical Products Inc., a maker of intravenous catheters, said it has lined up a large Pennsylvania-based purchasing group as a source of new customers. Mid Atlantic Group Network of Shared Services Inc. in Harrisburg will recommend Luther as a supplier to its members in exchange for price discounts by Luther, said David Rollo, Luther’s chief executive.

He predicted Luther’s sales will increase significantly, though he declined to say by how much. Mid Atlantic’s membership includes 11 regional purchasing organizations, which together represent about 2,400 hospitals and long-term care facilities.

Rollo noted that the rising power of such groups in purchasing decisions across the health-care industry is forcing small medical device makers to change the way they do business. Instead of knocking on doors of individual hospitals, as before, Luther’s salespeople must now develop relationships with groups of providers, he said.

Luther, which launched a sales campaign to line up national accounts in January, reported sales of $450,000 for that month, up 54% from the comparable month a year ago, he said. Last month also was the first profitable month, excluding extraordinary items, that the company has had in years, he added. The company’s sales volume for the fiscal year ending June 30 should be nearly double last year’s total of $2.5 million, he predicted. He also said the company should nearly break even this year after posting an operating loss of about $2 million last year.