A Bakers Dozen

By our count there are at least 12 companies that either have or are working on a “smart” insulin pen and these do not include the efforts underway at Novo Nordisk or Lilly. While most are what we would call Cap Covers that attach to a disposable insulin pen, there are some like the Companion InPen which are stand-alone units. Nearly every one of these whiz bang way cool cloud enabled toys talk with an equally way cool whiz bang app.

Now we aren’t sure if it’s dawned on anyone yet, probably not given the fascination with the toys in the toy chest, “smart” pens are a business just like CGM, BGM and insulin pumps. That the goal here is not to help patients, the goal here is to make money while helping patients. And that ain’t going to happen if Lilly, Novo Nordisk and Sanofi don’t play ball.

Listen we hate to overstate the obvious here, but these are the three major insulin companies, all of whom have committed to selling insulin in prefilled disposable pens. All three, if you include Sanofi’s investment in Common Sensing seem to be aligned with their own efforts to develop a Tyler. Therefore, one of two things must happen for all these companies which are not aligned to a major insulin company , and we should note Lilly has also invested in Companion, either they convince these companies they are building a mousetrap, or they go out of business, there is no third option.

Although none of the major insulin companies have revealed their intentions when it comes to the Tyler market, which likely means they don’t have a strategy yet, one thing is clear no “smart” pen company can survive long term as a stand-alone system. Lilly, Novo Nordisk and Sanofi control the insulin market and by default will control the Tyler market. It should also be noted all three have already aligned themselves with Dexcom, which means it would be wise if all the “smart” pen wannabes did so too, hey just saying.

We also doubt Medtronic, Tandem, Insulet or Bigfoot will have much luck here either. Now we suppose they could offer a Tyler system using biosimilar insulin’s but just as Lilly shouldn’t be in the insulin pump business, we’re not sure t’s a good idea for any of these toy makers to be in the insulin business. We could see some sort of alignment here as we can see a Tyler being an entry port for transitioning a patient on multiple daily injection (MDI) therapy to an insulin pump.

Yes, we do believe on balance a Tyler will slow insulin pump adoption, however it will not kill the insulin pump market.

The key for every one of these “smart” pen companies is not the toy it’s can they make the toy really cheap. This market will not have a thing to do with technology and everything to do with cost of goods. Our guess is, and we think it’s a good guess is insulin companies will bundle their “smart” device with the disposable pen or in the case of durable smart pen with the insulin cartridges. We aren’t sure if they will follow the BGM model and give away the toy for free to sell more insulin or if they will charge a nominal amount which payors find reasonable.

About all we know dim as they may be at times insulin companies are a lot like head football coaches, they are control freaks. They do not want the Tyler market to be controlled by anyone else and will do whatever they can to insure this. They have the relationships with payors, it’s their disposable pen and they have scale.

We have no idea which of these “smart” pen companies have the smarts to understand all this. Some do but most don’t. Most are overly fascinated with the toy and not the business of running a commercially viable toy company. Just as the insulin pump and CGM markets require talent so too does the Tyler market and we’re sorry to say there just isn’t a lot of talent around right now.