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Diabetes Care Club Acquires Priority Diabetes Supply, Obtains CMS Contract to Distribute Diabetic Supplies

  Diabetes Care Club Acquires Priority Diabetes Supply, Obtains CMS Contract
  to Distribute Diabetic Supplies

  *Leading provider of mail-order diabetic testing supplies becomes one of
    only 18 companies in nation authorized by CMS to serve Medicare patients
  *Company also inks agreement with Roche to ensure continued delivery of its
    ACCU-CHEK line of products to Medicare population

Business Wire

FRANKLIN, Tenn. -- May 16, 2013

Diabetes Care Club, a leading provider of mail-order diabetic testing
supplies, has acquired Priority Diabetes Supply, Inc. As a result of the
acquisition, Diabetes Care Club is now one of 18 providers in the nation with
a contract from the Centers for Medicare and Medicaid Services (CMS) national
mail-order competitive bidding program to distribute diabetic testing supplies
to Medicare beneficiaries. The contracts go into effect July 1, 2013.

“The acquisition of Priority Diabetes Supply allows us to continue serving our
current patients, while also offering a new home to patients who must move
from their existing provider to one that has been approved and contracted
through the competitive bidding program,” said Doug Hudson, chairman and CEO
of Diabetes Care Club’s parent company Simplex Healthcare.

“We’re very excited about participating in the competitive bidding program,”
Hudson added. “The program is a great opportunity for our business, and it
will benefit Medicare and its beneficiaries through lower costs.”

In conjunction with the acquisition, Diabetes Care Club announced it has
entered into an agreement with Roche Diagnostics Corporation to distribute its
line of ACCU-CHEK products to Medicare recipients, ensuring that patients
affected by the competitive bidding program are still able to find these
supplies and receive uninterrupted service.

“Without question, Medicare patients who are not receiving supplies from a
CMS-approved provider will face a lot of upheaval in the next several months
as they search for a new company that offers all the supplies they need,” said
Hudson. “By partnering with Roche, we are giving these patients confidence
that there is a provider that can take care of their long-term needs and
offers a wide range of high-quality products.”

Added Gary Van De Laarschot, vice president of sales and marketing for Roche
Diagnostics Corporation: “Roche is pleased to partner with Diabetes Care Club
to provide Medicare patients with continued access to high-quality ACCU-CHEK
diabetes testing supplies through mail-order distribution.”

A provider of diabetic testing supplies since 2007, Diabetes Care Club
acquired Priority Diabetes Supply as part of a precise and comprehensive
business strategy the company developed following the decision by CMS to
implement the Competitive Bidding program for Durable Medical Equipment,
Prosthetics/Orthotics, and Supplies in 2011. The program was designed by CMS
to significantly reduce healthcare costs by requiring providers to bid for
contracts to distribute medical equipment and supplies, including mail-order
diabetic testing supplies.

Recognizing the significant cost savings and quality improvements that
competitive bidding presents for patients, Diabetes Care Club prepared for the
program’s implementation by improving internal processes, increasing
efficiencies and lowering product costs. When CMS announced the bid prices in
early 2013, Diabetes Care Club was not initially awarded a contract due to a
high bid. However, the company determined that it was in a position to
effectively serve the market at the required price and implemented its
contingency plan, which lead to the purchase of Priority Diabetes Supply, one
of the contract winners.

“As one of the largest diabetic testing supply providers in the country,
Diabetes Care Club has the capacity and flexibility to immediately welcome
millions of new patients with Type 1 and Type 2 diabetes,” Hudson added.
“Diabetes Care Club is poised to start serving these patients today as they
seek other providers. As always, Diabetes Care Club will handle beneficiaries’
paperwork, ship their supplies for free and will help patients navigate this
new Medicare environment.”

“We’re pleased to be involved with this transition to Diabetes Care Club, a
world-class organization that has the operational infrastructure and expertise
to offer millions of patients the supplies and services they need,” said Buddy
Tatum, President of Priority Diabetes Supply. “This sale will allow us to
focus on our other businesses, centered on providing sleep apnea sufferers
with diagnostics, CPAP equipment and supplies, monitoring and education
services.”

About Diabetes Care Club

Diabetes Care Club, a Simplex brand, has grown to become the third largest
mail-order supplier of diabetic testing supplies for seniors. The company
provides home delivery of medical supplies for patients with diabetes and a
social network that offers help, support and information for people living
with the disease. For additional information, visit www.DiabetesCareClub.com.

About Simplex Healthcare

Simplex Healthcare is based in Franklin, Tenn., and provides home delivery of
medical supplies to help patients with diabetes. Simplex secured $50 million
in venture capital from New Enterprise Associates and acquired Diabetes Care
Club in September 2007. For more information about Simplex Healthcare, visit
www.SimplexHealthcare.com.

The diabetes epidemic in the United States has continued to accelerate with
over 1.6 million new cases being diagnosed annually. By 2050, an estimated 48
million Americans will have Type 2 diabetes.

About Priority Diabetes Supply, Inc.

Priority Diabetes Supply is a leading mail-order supplier of diabetic testing
supplies for seniors. The company provides home delivery of medical supplies
for patients with diabetes as well as offers education and support services
for people living with the disease.

About Roche

Headquartered in Basel, Switzerland, Roche is a leader in research-focused
healthcare with combined strengths in pharmaceuticals and diagnostics. Roche
is the world’s largest biotech company with truly differentiated medicines in
oncology, virology, inflammation, metabolism and CNS. Roche is also the world
leader in in-vitro diagnostics, tissue-based cancer diagnostics and a pioneer
in diabetes management. Roche’s personalized healthcare strategy aims at
providing medicines and diagnostic tools that enable tangible improvements in
the health, quality of life and survival of patients. In 2011, Roche had over
80,000 employees worldwide and invested over 8 billion Swiss francs in R&D.
For more information: www.roche.com or www.roche-diagnostics.us.

Contact:

for Simplex Healthcare
Philip McGowan, 615-327-7999
pmcgowan@seigenthaler.com