Siemens Ultrasound inks deal with Physician Sales & Service

May 14, 1997

Agreement expands sales for primary-care physiciansSiemens Ultrasound is retooling its sales approach for its mid-range and entry-level scanners to get better market access to office-based physicians. The division has transferred sales

Agreement expands sales for primary-care physicians

Siemens Ultrasound is retooling its sales approach for its mid-range and entry-level scanners to get better market access to office-based physicians. The division has transferred sales responsibility for the physician-office segment to medical equipment supply company Physician Sales & Service, while Siemens will focus its own sales and marketing effort on high-end hospital sales.

Under the terms of the three-year agreement, PSS will market the Sonoline Prima and Sonoline Versa scanners to the physician-office market. PSS will not sell any competing ultrasound scanners.

Prima is an entry-level gray-scale-only system with an average price of $30,000, while Versa comes in either gray-scale or color-flow versions and carries an average price tag of $75,000, depending on configuration. Siemens expects that Prima will garner the lion's share of PSS sales. Siemens will continue to handle all technical support, financing programs, as well as service for the systems.

Siemens is making the move because PSS has better penetration of the physician-office market. Siemens gains access to that company's 700 sales representatives, who serve 103,000 of the 198,000 primary-care physicians' offices in the U.S., according to Siemens. Headquartered in Jacksonville, FL, PSS operates 61 service centers in the U.S., including one in Seattle, near Siemens Ultrasound headquarters in Issaquah, WA.

Siemens, on the other hand, had a direct sales staff of 16 people selling Versa and Prima to the physician-office niche. Those representatives have now been transferred to handle accounts in the vendor's high-end color-flow business to expand its sales effort to hospitals.

"We thought this would be a good marriage, since the black-and-white market requires volume to be successful,"said Joe Ahladis, vice president of sales and marketing for Siemens Ultrasound.

No job cuts will result from the agreement, Ahladis said. In fact, demand for the company's ultrasound scanners is so strong that Siemens plans to hire another 10 field sales representatives to sell color-flow systems to hospitals, in addition to the 16 it is transferring from the physician-office market.

Siemens hopes that the increased exposure to private physicians' offices will propel the company to market leadership in urology and obstetrics within two years, Ahladis said. The company estimates that the market for general medical equipment in private physicians' offices is growing at 8% to 12% per year, with ultrasound sales increasing at a 4% to 6% clip.

In other Siemens Ultrasound news, the company last month received Food and Drug Administration 510(k) clearance for a new version of Versa Pro that is targeted at the cardiac/shared services and vascular segments, Ahladis said. The new version, which includes probes for transcranial Doppler and neonatal applications, is the first Siemens scanner targeted at the cardiac/shared services market, according to Ahladis.