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Business Observer Friday, Aug. 4, 2017 10 months ago

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A medical supply firm's expansion into manufacturing could create 30 jobs in Winter Haven — or Missouri.

A Winter Haven respiratory device distributor is considering adding a production center that will create up to 30 manufacturing jobs by early next year — if it can secure a state direct-to-patient sales license for home medical equipment.

The company, 3B Medical Inc., is the U.S. distributor for Chinese respiratory mask-maker BMC Medical Co. Ltd. The manufacturing opportunity stems from a complicated legal settlement. In January, 3B Medical announced a five-year settlement with ResMed, a San Diego-based firm. ResMed produces devices that treat and manage sleep apnea and chronic obstructive pulmonary disease, in addition to cloud-based software that remotely monitors more than 2 million patients around the world.

3B Medical and BMC Medical had been embroiled in a legal dispute with ResMed since 2014, with litigation before the U.S. International Trade Commission, in Florida and California district courts, and in China and Germany. ResMed claimed 3B Medical was distributing BMC Medical Chinese-made products that violated its CPAP humidifier, nasal mask and nasal pillow interface patents. 3B alleged RedMed was guilty of antitrust violations.

January's agreement allows 3B and BMC to sell its products in exchange for royalty payments to ResMed, which made a one-time settlement payment to 3B to end the Florida litigation between the two parties.

“We were very pleased with the settlement agreement,” 3B Medical Executive Vice President Alex Lucio says, noting the litigation cost the company $4 million in legal fees, and, at one point, spanned three continents and included 16 lawsuits regarding “myriad intellectual property and antitrust claims.”

“When 3B opened in 2012, ResMed almost immediately engaged us in complex litigation. We were constantly fighting on defense. It literally was a David versus Goliath situation,” Lucio adds. “Thankfully the litigation is all history now. The settlement this year allows us to put our focus back on developing new products and growing our business.”

With the legal wrangling concluded, Lucio says 3B Medical “is actively looking for acquisitions and new product opportunities” and plans to “add 12 new products and expand our product from the sleep space into oxygen and related respiratory areas.”

3B Medical employs 50 people — 10 direct employees and 40 commissioned sales people — at its sales and administration office in Winter Haven. The company's warehouse and distribution center is in St. Louis.

With legal issues resolved, Lucio says 3B is “actively considering moving production of one of our items out of China and into Central Florida,” he says. “We're looking at adding 20 to 30 manufacturing jobs probably by the first quarter of next year.”

However, he adds, this “significant investment” in Winter Haven is contingent on securing a home medical equipment license from the Florida Agency for Health Care Administration to conduct “direct-to-patient” sales.

That process isn't going well, Lucio says. “We have been a little disillusioned with some of the bureaucratic red tape from state agencies, such as AHCA. The AHCA does not seem particularly business-friendly,” he says.

AHCA press secretary Shelisha Coleman says the agency received 3B's initial application for an HME license in April. It issued 3B a Notice of Intent to Deny the HME license June 26, claiming the company failed to provide enough financial information.

Lucio says 3B “will seek review” of the agency's objections because it wants to expand in Winter Haven — although it is “considering opening an out-of-state subsidiary” if it cannot satisfy AHCA's concerns. 3B could get the proper license in Missouri “in a matter of weeks,” Lucio says, and “not have to worry about Florida. Where your direct-to-patient sales are is where your jobs go.”

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