Special Report: Danger Lurks in your Dental Supply Closet

May 3, 2017
P. Croatto

What’s in your dental practice’s supply closet? Where did those supplies come from? If you’re like most dentists, you don’t handle the supply-ordering process in your practice. You just sign the checks. Some well-intentioned staff member may be searching high and low to find you the best deal on your supplies. But are they ordering from reputable distributors? If not, those products might be coming from the black or gray market. Discounted dental goods come with a hidden cost: putting your patients and practice at risk. Here’s how to protect yourself.

It's time to shed some light on the danger that could be lurking in your dental supply closet: black- and gray-market dental products.

Bernie Teitelbaum, former executive director of the Dental Industry Association of Canada (DIAC), had just finished a talk in Vancouver about the risks dentists run using dental products purchased on the black and gray markets.

A dentist stood up: “Name me one dentist who’s ever been brought up before the disciplinary committee for using non-compliant product?”

Before Teitelbaum could offer his retort — “You want to be the first?” – another audience member rose to his feet. “I’m counsel for the British Columbia College of Dental Surgeons,” Teitelbaum remembers the man saying. “And I can tell you categorially, that you will never be brought up on disciplinary charges for using non-compliant products. You will be brought up on disciplinary charges for professional negligence. And we won’t let you hide behind the product.”

That dentist probably stopped frequenting the gray and black markets.

Plenty of others have not.

“We’re well aware that (the gray market) hasn’t been cleaned up,” says Tim Rogan, vice president of marketing for merchandise at dental product and technology distributor Patterson Dental.

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Simon Hearne, 3M Oral Care’s international vice president, admits awareness over the risks of using black- and gray-market products is “very low.”

What are the differences between the two categories?

“When we talk about gray market, we are talking about genuine products sold through an unsecured supply chain,” Hearne says. “These products include inferior goods that have been diverted from the manufacturers’ secured supply chain. Counterfeit goods or black-market goods are fake products that are often sold alongside gray market goods.”

The sale of gray-market products is also legal in the United States, says Gordon J. Christensen, D.D.S., M.S.D., PhD and CEO of Practical Clinical Courses, who has written on gray and black market dental products. “I have repeatedly asked the major dental companies about the amount of their products that are gray or black, and I always get the same answer,” he says. “The percentage of gray and black market products is estimated to be about 15 percent of total product sales.”

Rogan of Patterson Dental says a distributor must have “the ability to say no” to tempting offers from gray market dealers. Doing so means leaving “a fair amount of margin dollars on the table. But when you say yes to gray marketers, you put yourself at risk that you’re buying product that could be harmful to our customer’s customer, the patient.”

These products, Christensen adds, are “commonly consumable dental products” such as cements, composites, and bonding agents.

“The only motive to buy these products is price,” he says.

That can stem from good intentions.

Many dentists, Teitelbaum says, “don’t have a clue” what they’re buying.

Ira Newman, DDS, who practices on Long Island, New York, and previously worked for a dental supply company, says a dentist “involved in doing his purchasing has way too many empty spots in his appointment book.” A hygienist or an assistant is usually assigned that task. That employee wants to look good. The dentist, Newman says, only has time for the headlines. “We’re busy, you saved me money, we’re profitable. It’s a good day.”

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Gray-market goods are often purchased outside of certified supply chains. As a result, they could be prone to failure due to environmental exposure.

Some dentists, Teitelbaum says, “are absolutely convinced they’re getting ripped off” and will pursue bargains outside accepted channels — such as Amazon, eBay, or, as Newman recalled, an endodontist selling supplies from his garage.

It’s a gamble, says Christensen. A dentist has no guarantee if the project is legitimate or if it will do what it is intended to do. “If some treatment fails and the failure can be related to a deficient product,” he says, “the legal implications are obvious.”

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What’s even more troubling? “The dentist doesn’t see the product until he uses it,” Teitelbaum says.

The sense of doom extends beyond the black market. “Many gray-market goods bought by dental practices have often changed hands numerous times since they were diverted from the manufacturer-secured supply chain,” Hearne explains. “Often they have not been handled and stored under required climate-control conditions, and then may no longer meet the manufacturer’s original specifications. Typically, these products do not comply with U.S. regulatory requirements either. Sometimes, gray-market goods are even repackaged or relabeled with phony expiration dates. In some cases, products may be sold years past their expiration date, which can lead to problems like improper curing or bonding.”

Buying from a manufacturer’s authorized dealers — which Teitelbaum says he believes “a big percentage of the market” does – comes with security. “If I have a problem, I have full recourse,” he says. “If my patient sues me because there’s a problem, I can go after the manufacturer and the dealer. I’m protected. The entire chain of custody was as recommended by the manufacturer.”

There’s also the small matter that dentists may not be saving as much as they think by going the black- or gray-market route.

“For most dental offices, expenses for supplies is about five to seven percent of gross revenue,” Hearne says. “Saving on the supply expense is minor when considering risks to patient safety and productivity and financial loss to redo treatment and manage complaints or even lawsuits brought by dissatisfied patients. The damage to a dental practice’s reputation is much more of a significant loss compared to a few dollars of saving on supply expense.”

Dentists’ net income, adjusted for inflation, is at 1997’s level, according to Christensen. Overhead is 70 percent of their gross revenue. Throw in “significant third-party payment company and government limitations and reductions,” he says, and dental professionals remain eager to whittle operating expenses.

Dentists can still be thrifty and buy supplies from authorized dealers. “If they’re really clever, they demand a high level of service from that dealer that they’re working with, because they know they’re paying a premium price,” Teitelbaum says.

Christensen offered other options for practitioners: joining “dental cooperatives” that “have programs discounting products up to 25 percent”; negotiating with local retailers; buying distributor private label brands, which typically carry “significantly lower prices.”

“Just because a retail price is written in a catalog,” Newman says, “doesn’t necessarily mean you have to pay that price.” Here’s the logic: “Supply houses don’t want to lose business,” he continues. “So if they have to discount a little to keep the business, they’re (still) profitable. It’s when that person doesn’t buy at all — and does buy in gray market – that they’re losing money. So there is a pressure on them to give on price point to a degree.”

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A dentist's best line of defense is to purchase products from reputable distributors.

Teitelbaum says he believes “90 percent of the profits that are missing in a dental practice are in the patient charts.” In other words, patients need additional work, but turn it down. Or it gets forgotten about.

“The office manager doesn’t know anything about dentistry, but she’s out there saving money for you,” Teitelbaum says. “The problem is why isn’t she taking a course on how to reduce the number of cancellations? Or why isn’t she taking a course on patient acceptance” so she can help a patient with payment options for additional work? Teitelbaum says that the extra money for buying products from a reputable channel can recouped (and more) with “one crown a month.”

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“I think if the manufacturers made a better effort at somehow educating staff as to the purchasing process and why they should buy from authorized sources, that might help,” Newman says. “I don’t think you’re going to find a practitioner sitting there checking shipping lists to see who you’re buying from.”

With 3M.com/BuyDental and dentalsupplyintegrity.com, 3M and Patterson Dental, respectively, are among the major dental players doing just that. Education also extends to the dentists compelled to roll the dice, who should “at least have the common sense to check the product when it comes into the office,” Teitelbaum says.

In 2016, DIAC developed “A Suggested Protocol for Checking Product,” a checklist that could be posted in the office. “One knowledgeable person” should review all product purchases that arrive. Among the questions to ask: does the product have the same name as advertised — and is it in English? Is the product in its original package or crammed in a plastic baggie? Does the package, or its contents, have markings indicating it might have been rerouted?

Initially, it might take 15 minutes to vet a shipment, but Teitelbaum says repetition will turn the examination into a “non-issue” within six months. “Because at the point,” he says, “if they are buying from unauthorized sources, they’re going, ‘This isn’t worth it. Too much of what we’re getting is garbage.’”

Teitelbaum and Newman would like the business education to start even earlier — in dental school. Maybe, Teitelbaum says, a dentist takes a practice-management course or eventually hires a consultant. Then they open their doors for business and “they haven’t got a clue how to run a dental practice.”

Aside from continuing education, collaboration is key.

“The black and gray market products put patient safety at risk, and it is up to the entire industry, manufacturers, distributors and dental professionals to do their part to keep patients safe,” Hearne says. “By working together, we can all help protect the integrity of the industry that we’ve worked so hard to build.”

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