As regulators approve glucose-monitoring systems, the market potential is huge
Diabetes monitors are getting closer to their iPhone moment
Diabetes devices may be having their iPhone moment.
For decades, the daily routine of diabetics involved painful needles, finger-pricking lancets and imprecise glucose meters. Now, manufacturers have begun incorporating the slick and consumer-friendly designs of Silicon Valley, linking to phones and other tech devices.
“This is a crossroads for diabetes technology,’’ said Raj Denhoy, an analyst at Jefferies in New York.
September marked a breakthrough in the US, as regulators approved the first glucose-monitoring system that doesn’t need a blood sample, Abbott Laboratories’ FreeStyle Libre. The new devices do away with fingerpricks, changing an unpleasant, several-times-a-day routine into quiet monitoring in the background through a sensor worn on the back of the upper arm.
Other companies have been left behind. Johnson & Johnson is closing its insulin-pump unit after failing to keep up with Medtronic Plc. DexCom, the current leader in glucose-monitoring systems, lost a third of its market value on Sept. 28 after Abbott’s Libre got approval.
On DexCom’s earnings conference call Wednesday executives, peppered with questions about the Libre, said the company hopes to introduce its own fingerprick-free device before the end of 2018. The comments about next-generation monitors helped assuage investors’ concerns about DexCom’s prospects, sending the stock up 9.5 per cent in the two trading days following the results.
“Companies who succeed will be those who can figure out this convergence of health care and technology,” said Arda Ural, a partner at Ernst & Young in New York. “And they’re very different animals to bring together.”
For the winners, the potential market is huge. Diabetes device sales totaled US$14 billion in the US last year, according to Ernst & Young.
For now, the bulk of the sales are to the 1.25 million American diabetes with the most severe form of the disease, type 1. Because their pancreas can’t produce insulin, those patients have to constantly monitor their blood sugar and frequently inject themselves with insulin when it spikes.
There’s a larger, mostly untapped market: the about 20 million Americans with type 2, whose body’s ability to use insulin fades slowly over time and who don’t regularly use tools to manage their disease.
Yet some patients have been waiting for decades for better devices to control a condition that, unchecked, can lead to complications including kidney damage and heart disease.
Aaron Kowalski, chief mission officer of diabetes research foundation JDRF, was diagnosed as a 13-year-old in the 1980s. At the time, people measured their glucose by urinating on a stick or placing a drop of blood on a color strip that gave a rough number.
“It was barbaric,” he said.
Abbott’s Libre will arrive in the US soon. It’s already been sold to 400,000 consumers internationally, including Brenna Wilson, an 18-year-old high-school student in Ireland who was diagnosed with type 1 at age 3.
Before she bought the Libre in March, it had “kind of been hell” managing the condition, Ms Wilson said. Teachers have been irritated when she pricked her finger in the classroom.
“The Libre makes it a lot easier,” she said. “I can just check what it is, and it doesn’t have to be this whole big thing. It’s very discreet. People don’t even notice it.”
Dexcom, despite the recent blow, has been making strides as well. Its G4 and G5 sensors stick on the body and are only calibrated twice a day with a finger prick. In September, the San Diego company teamed with Fitbit to link its devices with the latest Fitbit Ionic smartwatch. The companies hope to get the product out next year.
Unlike many consumer products, diabetes devices face two major hurdles -- the Food and Drug Administration and health insurers.
Joel Goldsmith, senior director of product innovation at Abbott, said it can take years to get products through long trials required by the FDA before a device can reach the market.
“There’s a new phone model every six months,” he said. “The medical device world doesn’t operate at that same pace.”
Eventually, the long-term profitability of the technology revolution will depend on coverage. Insurers have increasingly balked at paying for novel devices they don’t deem medically necessary. The Libre will retail in the US at a similar price as in Europe, which comes to about $5 a day, including a reader and sensors that must be replaced every 10 days.
A year ago, the FDA approved Medtronic’s MiniMed 670G, an insulin-delivery system that works like an artificial pancreas, ahead of schedule. Medtronic is still waiting, however, for the agency to rule on its smartphone application, Sugar.IQ, which will track meals, blood-glucose levels and insulin dosing, said Huzefa Neemuchwala, head of innovation at the company. So far, only DexCom has an FDA-approved app.
California startup Bigfoot Biomedical is working on an app that will link to the Libre and on an automatic insulin pump. Co-founder Jeffrey Brewer, whose son was diagnosed with type 1 in 2002 at 7, knows first-hand the need for user-friendly tools. One day, he hopes, Bigfoot will package devices in a slick box that unwraps like an Apple product.
“This is a category where consumer-focused design is going to explode,” he said. “It’s going to be transformative for the people who live with this disease. And my son is going to be the first customer.”