Formlabs announced their entry into a huge healthcare group purchasing organization, Vizient.
Vizient is a Texas-based company that provides group purchasing services for over 5,000 non profit members and this includes almost 1400 hospitals across the USA. Their services include not only equipment and supplies, but also process improvement, supply chain management and drug services. A healthcare operation can plug into Vizient and obtain much of what they need to do business.
Now, Vizient has added Formlabs to their list of equipment and supplies. Formlabs explained:
“Formlabs announced today that it is the first 3D printing company listed in a major group purchasing organization (GPO) catalog, demonstrating the increasing demand for 3D printed surgical tools and medical supplies in hospitals and Ambulatory Surgical Centers (ASCs). Formlabs received a contract from Vizient, the largest member-driven healthcare GPO in the nation, to offer its 3D printers, materials, and solutions for converting CT/MR imaging into tactile, patient-specific anatomical replicas for surgical planning, implant sizing, and patient consent. The contract provides negotiated pricing, terms and conditions for Vizient member healthcare organizations.”
In other words, an enormous number of healthcare organizations will suddenly find Formlabs gear on their favorite supplier’s menu, with discounted pricing. They’ll be able to order Formlabs equipment and supplies at the touch of a button.
Why is this so important? It’s like Formlabs instantly had thousands of new sales personnel based at 5,000 hospitals, selling equipment and supplies to each department. Except, it’s without the sales personnel, and that’s extremely efficient.
The cost of a machine, for example, would have to account for the cost of materials to build the machine, design and test efforts, administrative costs and the cost of sales. The latter is a figure that would drop considerably as a result of this arrangement, and it could mean additional margin for Formlabs. It certainly will also mean a great deal more sales.
What’s more, this is likely the very first time 3D printing equipment has been offered in this manner and scale for the healthcare industry. Other products have been sold in this manner for many years, but the “new” technology of 3D printing has finally made it to this stage.
How did it get here? I suspect it’s because of the pandemic. You see, when the pandemic struck there were shortages of all kinds of healthcare supplies, one of which was test swabs. Traditional manufacturers could not keep up due to volume and supply chain challenges.
Formlabs devised a way for their equipment to 3D print massive quantities of swabs, and deployed an entire lab full of 3D printers to do so. Their initial configuration produced up to 150,000 swabs per day, a considerable amount given the lack of supplies at that time.
This success led to many similar installations taking advantage of the unexpected demand and Formlabs solution. One example of this phenomenon was Precision ADM’s pivot from metal 3D printing to swab printing.
The result of all this activity was a significant buzz in the healthcare sector, as more and more people heard about the solution and became familiar with it. But then others realized that these strange 3D printers could do more than just produce swabs, they could produce many other useful healthcare parts. Demand increased.
Apparently, demand increased to such a degree that Vizient felt it necessary to include Formlabs in their GPO service.
And that brings us to today, when this deal is officially announced. It’s good news for Formlabs, good news for Vizient, and good news for healthcare providers exploring 3D printing. It might not be the best news for Formlabs competitors, however.