Operator: Thank you. Next question is coming from Laura Sutcliffe from UBS. Your line is now live.
Laura Sutcliffe: Hello, thank you. I was just wondering if you could talk about how your position to increase your mask supply in the event that the consent decree over at the competition impacts their ability to provide those, for example, if they end up constrained at a facility level. Thanks.
Mick Farrell: Yes. Look, we have run all sorts of scenario analyses around that. I think one of the differences if you think in terms of ResMed’s ability to work with suppliers in the core device side, where in terms of chip sets, the whole med-tech sector as a group, and I serve on the Board of AdvaMed and we were advocating for more semiconductor chips for the whole industry. When we were going to Intel, TI and all these companies and sort of begging for semiconductor chips 12, 18 months ago, all together we were less than 1% of the supply of chips. And it was very difficult. We did get some, and as you saw, we did have to pay a little more, but we were able to get those contracts with other players and get long-term contracts and get that supply.
In the field of medical grade silicon rubber, we are one of the top users in the world for this. As you know, we sell tens of millions of mask products per year. And we are an incredibly large part of that supply chain. So if a competitor was not able to sell masks, their demand for that LSR would go down and those or similar suppliers would then want to keep their factories operating and be looking for other suppliers. And we would be running the game theory and the analysis of where we go and how we go to ramp that production up. So it would be a good problem to have for the business. I think it’d be bad problem to have for patients, but I think the probability of that is relatively low, but if it does happen, we’re ready. But Rob, do you have any thoughts on that?
Rob Douglas, our President and COO.
Rob Douglas: Yes. Hi, just one other minor comment on that. And we’ve said this before, because of the relatively low CapEx of our supply chain and the equipment that we need, we generally run with quite a lot of those capacity supply. And so our ability to rapidly increase volumes as needed is really strong.
Mick Farrell: Thanks for the question.
Operator: Thank you. Next question is coming from Sean Laaman from Morgan Stanley. Your line is now live.
Sean Laaman: Good afternoon. Mick, hope you’re well. Mick, I’m wondering if you could characterize for us some of the price dynamics that might have been present during the quarter.
Mick Farrell: Yes, thanks for the question, Sean. Yes, a simple question, very complex answer across the 140 countries and all the dynamics. I think one thing that I’m comfortable to say though on this is that if you look over the last four quarters, our commercial teams have done an incredible job of partnering up with our customers to say, look, inflation is up, costs are up. How do we share some of the pain, if you like, of these increased costs? And we were able to increase some prices on some mask systems and components and some devices where we could, it’s tough because customers often don’t get much relief from the payers. They did in the Medicare side in the U.S. market where there was an inflation adjustment up of around 5% January 1.
