A dark vision of the future

A dark vision of the future

In 29 days, the diabetes community will gather in beautiful San Diego for our annual conference. A conference which has been shrinking as this wacky world has undergone a series of transformations. Traditionally we have always characterized the ADA Scientific Sessions as a drug dominated conference with diabetes device companies playing a supporting role. Through the years this conference has gone from a wild party atmosphere to almost a morgue like atmosphere.

It should come as no surprise given the commodization of diabetes that companies have cut back on the extravagance of the past. Sure, there are still several great events but nowhere near what used to be. This is the new world we live where lean and mean is the order of the day.

One story we will be following closely at the conference is the fate of Tandem (NASDAQ: TNDM) and Animas, Johnson and Johnson’s (NYSE: JNJ) insulin pump unit. Now we need not remind everyone that this likely will be the last conference for Tandem and could well be the last conference for Animas as part of JNJ. Tandem is running out of money and JNJ is running out of patience.

Fast forward to next year when the conference will be in sunny Orlando and imagine who will be left standing in the ultra-competitive insulin pump market. There is no question Medtronic (NYSE: MDT) will be there and we would say that Insulet (NASDAQ: PODD) will also be there. But after that who knows. Tandem will likely be gone and their 50,000 or so patients mostly gone to Medtronic. Animas could be part of Sanofi (NYSE: SNY) which basically means it’s only a matter of time before these patients will also be up for grabs. Roche, if rumors are correct, will have their patch pump on the market. And assuming everything goes as planned Bigfoot could be debuting their system.

Now before we go any further let’s make a few things very clear. First, we are all for the free market and competition, this is what capitalism is all about. Second, unlike some we do not blame how this market operates for their own failings. Third, excuse the expression new blood is desperately needed in insulin pump market and while Sanofi buying JNJ’s diabetes device franchise would make for some great copy we are honestly hoping this does not happen.

That being said, there is a dark side to the survival of the fittest which unfortunately falls on top of who else but the patient. With one company clearly dominating the insulin pump landscape what incentive is there to provide things like solid customer service. Back in the day before MiniMed was bought by Medtronic they set the gold standard for insulin pump customer service. Al Mann, may he rest in peace, and the very talented team he assembled understood the importance of good customer service.

After being acquired by Medtronic and a new management team in place what did they do? They looked at the insulin pump landscape and their huge market share and in an attempt to boost profits they cut back on customer service. A move that backfired as patients, physicians and CDE’s got feed up. Back then Animas and Deltec were viable options and patients started gravitating to their pumps. Realizing they made a mistake the company went about rectifying the problem.

We should note that even though this happened years ago there are patients, physicians and CDE’s who will not use a Medtronic pump. It’s fair to say this was the beginning of the belief that Medtronic was the evil empire.

Now keep in mind that customer service in the insulin pump space is not a big job, it’s a Herculean task. Insulin pump patients are the most educated and therefore the most demanding. This is understandable as their pump is literally a life saving device and when that device is not working properly or malfunctions, as devices are known to do, these patients can get pesky and snarky. Frankly we do feel for those people on the other end of the phone line when they have to deal with a pissed off pump patient. And believe it or not we feel for Medtronic here as they have the most patients to deal with.

Yet we also understand that as important as customer service is, this is also a business. A very competitive business where every dollar spent counts against profits. Balancing the needs of the patient against the demands of making money for stakeholders is not an easy task by any means. Here too Medtronic faces an incredible burden as today patients do not just complain over the phone. No in today’s world they use social media to express their displeasure. And as we just witnessed with United all it takes is one of these posts to go viral and all the good work goes out the window.

However, as we look to the future we cannot help but wonder what customer service will be like. Let’s be honest here Medtronic is not stupid, they see what’s happening in the market and understand when it comes to insulin pumps they are always in the equation. Or put another way what options are available to a patient who is unhappy with the customer service they experience. Can they say enough is enough and switch systems?

Think about this for just a moment as the choice now is go to another company which may or may not be around to support the choice the patient has made. Listen given the choice between below average customer service and no customer service at all, it’s an easy choice. Add in the fact that Medtronic owns the formulary and this choice becomes even more difficult. For example, a patient may want to switch to the OmniPod but because of their coverage this option either isn’t available or will cost the patient more out of pocket.

We hate to be redundant but once again this comes down to money, who makes it, who spends it and who saves it. Once again this is one time when the business of diabetes interferes with the management of diabetes.

What’s needed here is a combination of things. Some balance most be brought to the system so that the needs of the patient and the needs of the company are aligned. Patients must understand that like it or not this is a business and businesses are trying to make money. Companies must understand that patients should be treated with dignity and respect. Technology can also help as the more options available the better. Better pump design and patient training will also help. Not an easy task today with sensor augmented systems becoming the favored option.

The reality here is that patients will always complain and there is no way everyone will be happy 100% of the time. It is also true that pump companies are spending a small fortune on customer service and being human they do from time to time make mistakes. As we noted before it’s not easy being a customer service rep with an unhappy pump patient. For the most part these reps do an outstanding job and quite frankly do not get nearly enough credit when they do a good job. This unfortunately is the nature of the beast combined with the reach of social media.

What everyone here needs to remember is something Momma Kliff used to say; “The best relationships are the ones where each side understands the needs of the other.”