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VHA SIGNS $1.2 BILLION SOLE-SOURCE AGREEMENTS FOR SUTURES, STAPLERS AND ENDOSCOPIC SURGERY PRODUCTS WITH JOHNSON & JOHNSON SUBSIDIARIES

VHA SIGNS $1.2 BILLION SOLE-SOURCE AGREEMENTS FOR SUTURES, STAPLERS AND
 ENDOSCOPIC SURGERY PRODUCTS WITH JOHNSON & JOHNSON SUBSIDIARIES
 IRVING, Texas, Nov. 9 /PRNewswire/ -- Voluntary Hospitals of America, Inc. today announced it has entered into exclusive agreements with two Johnson & Johnson (NYSE: JNJ) subsidiaries -- Ethicon, Inc., and Ethicon Endo-Surgery -- for the purchase of sutures, staplers, and endoscopic surgical instruments, effective Jan. 1, 1993.
 The combined agreements are expected to generate $1.2 billion in sales for the Johnson & Johnson companies, and substantial savings, incentives, cooperative revenue, and other benefits for VHA hospitals and multihospital systems over the five-year term of the contracts, the companies said today at a press briefing at VHA's national office.
 VHA is the nation's largest health care alliance with 886 not-for- profit hospitals and multihospital systems. The health care organizations have a total of 222,000 licensed beds, representing approximately 22 percent of the nation's hospital capacity. One out of every four hospital-based surgical procedures in the United States is performed in a VHA facility.
 Dwight Winstead, executive vice president of VHA and head of its products and services division, said, "We expect the endoscopic market to explode over the next five years, and Ethicon Endo-Surgery and ETHICON have made major commitments to deal with this rapid growth."
 Ethicon, Inc. has a solid record of service to VHA organizations including a major suture agreement with VHA since 1987. In June 1992, Ethicon Endo-Surgery opened an endoscopic training facility in Cincinnati, and had hired more than 300 engineers to develop products, and bought in sales staff of more than 500 to service health care facilities.
 "Ethicon Endo-Surgery and Ethicon, Inc. are making an impressive pledge to availability and breadth of product line and historically have demonstrated a strong dedication to quality. They are excellent business partners," Winstead said.
 Winstead said the sole-source contracts were awarded after extensive market research. The comprehensive process entailed surveys, interactive videoconferences, and discussions with special task forces of operating room supervisors, nurses, materials managers, and VHA Regional Health Care Systems. "The input we received strongly favored Ethicon, Inc. and Ethicon Endo-Surgery on sutures, staplers, and endosurgical products," he said.
 Under terms of the agreements, the two Johnson & Johnson companies will be closely tied to VHA's distribution network, which controls distribution costs, maintains high service levels, and permits VHA health care organizations to stock smaller product inventories, lessening each hospital's costs.
 Ethicon, Inc., headquartered in Somerville, N.J., will continue to be VHA's sole provider for sutures, needles, and other surgical products utilized for precise wound closure for the next five years. Ethicon, Inc. is the world's leading manufacturer of sutures. Its most recent innovation, Monocryl(TM) (poliglecaprone 25) suture, is a unique patented synthetic absorbable monofilament suture that illustrates the latest in suture technology.
 Frank J. Ryan, president of Ethicon, Inc., said the agreement will help ensure that VHA hospital-affiliated surgeons and clinicians will continue to have access to state-of-the-art products and services to support their commitment to delivering the best patient care.
 "This new contract also demonstrates our pro-active stance in partnering with hospital financial and materials management interests to control health care costs," Ryan commented.
 According to a separate agreement, Cincinnati-based Ethicon Endo- Surgery will be VHA's sole supplier of single-patient use endo-surgery and conventional surgery products, including staplers, ligation clips and appliers, trocars, hand-held instruments, and a full range of high technology products.
 Endoscopic surgery is a minimally invasive surgical technique that utilizes small incisions to gain access to internal organs and tissues instead of large incisions made with a scalpel. Endoscopic surgery is now being used by many surgeons to repair hernias, remove gallbladders, perform hysterectomies, and operate on lungs, stomach, bowel, kidneys, and the appendix. Endoscopic surgery is being performed because it minimizes lengthy (and costly) hospital stays and patient pain, and greatly reduces the time spent recuperating from surgery.
 William C. Weldon, president of Ethicon Endo-Surgery, noted that the agreement will facilitate the participation of VHA-hospital affiliated surgeons and nurses in the technical and educational programs Johnson & Johnson has committed to the endoscopic surgery market.
 "Our VHA agreement closely follows the launch of several major products at the recent American College of Surgeons meeting. These new instruments are the result of our unique procedure-oriented engineering and development approach which affords a greater sensitivity to surgeon and marketplace needs than otherwise possible," said Weldon.
 Ethicon Endo-Surgery was an operating division within Ethicon, Inc. until January 1992 when it was named as a separate Johnson & Johnson company. Ethicon, Inc. leads the world in the scientific development and delivery of suture products, which have made all forms of surgery -- from routine skin closure to revolutionary microsurgical procedures -- possible. Working closely with leading surgeons and nurses around the world, the company provides a continual flow of innovative new sutures, packaging enhancements, and refinements in needle technologies.
 Johnson & Johnson is the world's largest and most comprehensive manufacturer of health care products serving the consumer, pharmaceutical, diagnostic, and professional markets. Johnson & Johnson has over 82,000 employees and 166 operating companies in 52 countries, selling products in more than 150 countries around the world. 1991 revenues were $12.45 billion. For the first nine months of 1992, revenues increased 10.2 percent while earnings per share rose 15.2 percent.
 -0- 11/9/92 R
 /CONTACT: Mack Haning of Voluntary Hospitals of America, 214-830-0253, or Peter Steinerman of Ruder-Finn, 212-715-1677, for Voluntary Hospitals of America/
 (JNJ) CO: Voluntary Hospitals of America, Inc.; Johnson & Johnson ST: Texas, New Jersey IN: HEA SU:


CK-LD -- NY007 -- 9103 11/10/92 09:08 EST
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Date:Nov 10, 1992
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