A better place?

A better place?

According to their state web site North Carolina is a better place; that is of course assuming you’re not a resident of the state who has diabetes. As Diabetic Investor reported yesterday the state has signed a deal with Prodigy to be the exclusive provider of blood glucose monitors for the state’s 50,000 Medicaid patients with diabetes. The state is claiming that this deal with Prodigy will save the state nearly $4 million over the life of the two year contract. This deal has come under scrutiny for several reasons not the least of which being Prodigy’s checkered business history.

Since our story was published Diabetic Investor has learned that the state’s main reason for doing the deal, namely saving $4 million, is false. Diabetic Investor has confirmed that the state actually had the opportunity to save even more money and was offered an even lower price from Prodigy’s competitors. Diabetic Investor has also received reports there may be a connection between Prodigy’s Board of Directors and North Carolina state officials. Imagine that.

Diabetic Investor isn’t sure where all this will lead but it does call into question why the state was anxious to do a deal with a relatively unknown company with a checkered business history. As we noted yesterday this deal just doesn’t pass the smell test and the more we learn the worse it smells. Diabetic Investor attempted to contact the state to see exactly why this deal was made, however officials were unavailable due to the Christmas holiday.

As bad as the Prodigy deal this is not the first time the state has taken aim at patients with diabetes. In another move that will hurt patients the state has also changed reimbursement for insulin syringes. As with the Prodigy deal the state is claiming this move was made to save money. Previously the state reimbursed for syringes made by Becton Dickinson (NYSE:BDX) but has since changed to an off-brand manufactured in Minnesota. Besides being an inferior product to what BD provided, the state seems to have forgotten that BD actually has a manufacturing facility located in the state that just happens to employee tax-paying citizens.

The reason Diabetic Investor mentions this fact is that some have speculated the reason the state made the deal with Prodigy was because they also have a manufacturing facility located in the state which also employees tax-paying citizens. If this was part of the decision making process it would seem logical that the state would also want to keep BD happy as they are also employing North Carolina residents.

Seeing as Diabetic Investor is based in Chicago, where backroom deals are standard operating procedure, we can smell a connected deal a mile away. The reality is the deal with Prodigy makes absolutely no sense whatsoever and quite frankly it’s next to impossible, when looking at all the facts, to find a rationale for making this deal. The deal certainly doesn’t benefit patients, it doesn’t really save the state any money and it doesn’t benefit companies that actually employee hundreds of North Carolina residents.

To Diabetic Investor this situation reminds us of something said by Abraham Lincoln; “Politicians [are] a set of men who have interests aside from the interests of the people, and who, to say the most of them, are, taken as a mass, at least one long step removed from honest men. I say this with greater freedom because, being a politician myself, none can regard it as personal.” Put more directly, this deal stinks.