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Cook's new Oxilan nonionic agentshakes up market for x-ray contrast


Oxilan adds price pressure to already fragile marketIn a departure from its traditional role as a developer of medicaldevices, Cook Inc. has entered the market with a new x-ray contrastmedium. In the process, the Bloomington, IN, company's

Oxilan adds price pressure to already fragile market

In a departure from its traditional role as a developer of medicaldevices, Cook Inc. has entered the market with a new x-ray contrastmedium. In the process, the Bloomington, IN, company's effortsappear to be adding pressure to already dropping prices for nonionicimaging agents.

Cook began marketing Oxilan (ioxilan) in July and cranked upits promotional campaign this month with ads in major radiologytrade publications. The product has been approved by the Foodand Drug Administration for a comprehensive range of indications,including CT for head and body, intravenous pyelography, and allangiographic applications, including peripheral, aorta, visceral,cerebral, and cardiac.

Oxilan is not indicated for myelography, pediatric applications,and some other minor indications. It is available in concentrationsof 300 and 350 milligrams of iodine per milliliter and packagedin 50- and 100-mL bottles.

To market Oxilan, Cook is using distribution channels establishedfor the sale of its extensive line of catheters and other interventionalproducts. These channels give Cook access to hospitals acrossthe U.S. The company is selling Oxilan direct, utilizing its existingsales personnel in both radiology and cardiology markets.

Since it began selling Oxilan two months ago, Cook has discoveredthe unpleasant side of the U.S. x-ray contrast agent market: fierceprice competition that is hammering the bottom lines of contrastmedia companies.

"All we have to do is show up on the doorstep and withina couple of days, people are paying lower prices for their contrastmedia," said Rick Mellinger, marketing manager for Cook.

Most of the money being spent, however, is not going to Cook.Instead, many of the customers being approached by the companyare using the low prices offered on Oxilan to obtain discountsfrom more established vendors.

"We are serving as a wonderful pawn for people to play,because we offer them possibly significant savings over what they'repaying today," Mellinger said. "They go to the vendorthey now have and right in the middle of a contract the (existingvendor) lowers the cost."

Oxilan may be one of the factors contributing to the markeddrop in the price of contrast agents in the U.S., a developmentthat Norwegian contrast firm Nycomed cited as the reason for disappointingsecond-quarter revenue and income figures (SCAN 8/28/96).

"In the last two to three months, many pricing scenarioshave been cut roughly in half from previous payment levels between70¢ and 90¢ per cc," Mellinger said.

Mellinger and his colleagues at Cook Imaging, the Cook subsidiarythat developed Oxilan, believe that lower prices for nonionicagents will ultimately increase the popularity of their agent,which competes with products from Nycomed, Schering, Bracco, andMallinckrodt.

"The prices for these products have been inflated, and becauseof those incredibly high prices, people have faced decisions regardingtheir use," Mellinger said. "Our goal from the beginninghas been to come to market with a competitively priced productthat would allow the use of nonionics to expand."

Cook is concentrating on the U.S. market, but is not ignoringthe rest of the global medical imaging community. The companyhas established an international licensing agreement with JapanTobacco, one of the largest pharmaceutical companies in Japan,and a major Japanese sales effort is expected to begin in 1997.Cook is also beginning to explore options for entering marketsin Europe, Canada, South America, and the Pacific Rim.

Cook's commitment to Oxilan reaches back to 1981, when the companydecided to develop a high-quality, low-cost contrast medium. Cookviewed contrast agents as a product line well suited to the thousandsof contacts made during the three decades that the company hadbeen selling medical devices for radiology and cardiology.

"The greatest area of use of nonionics is CT, and we haveexposure to that user community -- maybe not to the degree wewould like, but we have products that have crossed over into CTbecause of the use of drainage catheter placement using CT guidanceand biopsy procedures using CT guidance," Mellinger said.

Meanwhile, Cook's extensive line of interventional and catheterizationproducts has tied the company into angiography and cardiac cathdepartments throughout the U.S.

These contacts are almost exclusively at hospitals. The company,therefore, has not yet addressed outpatient facilities, such asfreestanding imaging clinics, even though a major share of theprocedures involving nonionic contrast are conducted there.

This month, the company plans to kick off a major marketing assaultwith advertising in trade journals and an intensified sales effort.

"Our approach is that we have a high-quality product andwe believe we can be very competitive with other players,"Mellinger said.

The problem will be getting a chance to demonstrate that competitiveness.Existing contracts between contrast media vendors and buying groups,such as Premier, which handles around 1700 hospitals and is buyingits nonionic x-ray contrast from Mallinckrodt, will slow the widespreadacceptance of Oxilan.

"You hope for bits and pieces," Mellinger said. "It'sstill very early and we're going down this road in a very controlledway. We have to pick and choose our way through this maze so weget a better understanding of what's going on in this marketplace.But we believe we can be successful."

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