A day late and a dollar short
This morning we learned that Roche finally received FDA approval for their new Accu-Chek Combo System which according to a company issued press release; “The Accu-Chek Combo system seamlessly combines a blood glucose meter with an insulin pump, which are able to exchange data in both directions via Bluetooth wireless technology. The meter not only enables the user to quickly test blood glucose levels: It allows for operating the insulin pump remotely and by means of an easy-to-handle bolus advisor it provides support in defining the right amount of insulin.”
Now if that statement seems familiar check this out; “The pump is packed with unique capabilites that may be accessed both wirelessly (by using the meter-remote) and manually. And the meter-remote, with its full set of functions, is designed to make your life with diabetes easier and more discreet. In fact, you can even dose your insulin from it.” That statement comes from the Animas web site and describes their OneTouch® Ping™ which has been on the market since late 2008.
The biggest difference here, besides Roche being late to market once again, is that Animas at least had an installed user base of pump patients from which to build upon and the company had an existing presence in the insulin pump market. Compare that to Roche who has virtually no presence in the market and a handful of existing customer.
Now Diabetic Investor doesn’t want to be too hard on our friends in Indy but given the way they have screwed up their glucose monitoring business, losing nearly 50% of their revenue here in North America and wasting over a billion dollars acquiring Disetronic and another 200 million or so acquiring Medingo, one just might think they had enough punishment. But being the devoted, some would stubborn (others would say stupid) soldiers they are, they have decided to carry on the fight rather than give up.
In just over two weeks diabetes educators will gather in Roche’s home town for the American Association of Diabetes Educators (AADE) conference, a conference which is dominated by diabetes device companies. These companies know that the diabetes educator not only train patients but have a greater amount of influence than the patients doctor over which insulin pump they use. The doctor may recommend insulin pump therapy but it is the educator who assists the patient in selecting an insulin pump system. It is also the educator, not the doctor, who answers the many questions patients have while adjusting to insulin pump therapy.
In the majority of physicians’ offices across the country that actually recommend insulin pump therapy typically the patient will have two options from which to choose; one system from market leader Medtronic (NYSE:MDT) and the other from Animas or Insulet (NASDAQ:PODD). While there are offices that offer all three and others that excluded Medtronic, these are exceptions to the norm. The simple fact is nearly every patient going on insulin pump therapy will at minimum see the Medtronic system. The battle up till now has always been who can secure themselves in the number two spot behind Medtronic, capturing enough patients to become profitable. The fact is neither Animas, who now occupies the number two spot, nor Insulet have ever made money.
But let’s assume for a moment that the harsh realities of the insulin pump market change and new systems such as the Accu-Chek Combo were seen by patients. The question then becomes how well does it stake up against the competition or put another way why would a patient/educator select the Combo over what’s being offered elsewhere. Let’s really go off the deep end and further assume it truly is a level playing field and the patient’s insurer will reimburse for any system. (Yes we realize that this is like living in fantasy land but the fact is many insulin pump companies spend more time there than they do in the real world, so what the heck.) And since we’re making such a dramatic departure from reality let’s assume that the educator has no vested interest in the outcome that they really don’t care which system the patient chooses so long as the patient is comfortable. In reality educators often time do have a vested interest in the outcomes as pump companies pay educators for training the patient and just like everything else in diabetes the amount of these payments can vary by company.
With the exception of the OmniPod system from Insulet, which is the only FDA approved and commercially available wireless system, the reality is all pumps are basically the same and do pretty much the same thing the same way. Yes there are some differences between systems but in the hands of a well-trained and well educated patient it really wouldn’t matter which system they were on. As can be seen here with the Combo, the insulin pump market is not all that different from the glucose monitoring market. Both markets are overly fascinated with whiz bang technology only a handful of patients actually use and both copy any innovation offered by a competitor. While the insulin pump market has not yet turned into a commodity market, as has the BGM market, it sure looks to be headed in that direction.
Yet we have digressed a little so let’s get back to original question; assuming everything is actually equal and it is a level playing field, which we know it’s not – would a patient actually select the Roche system. Even in this fantasyland scenario its unlikely Roche would come out on top. In fact looked at realistically it’s unlikely they would even make it past the also just approved systems from Tandem and CellNovo. The true litmus test will come in about two weeks when throngs of educators make their annual pilgrimage to AADE and see the Combo for the very first time. While there will be some who will like the Combo, we already know the majority will favor the iPhone like t:slim from Tandem and if they were exhibiting the CellNovo system. (While approved in Europe the CellNovo system is not yet approved here in the US.)
Even in a fantasy setting the Combo is another me-too, late to market product which doesn’t even look cool. Frankly Diabetic Investor has no idea how the t:slim or CellNovo systems will perform in the real world but both systems sure do look very cool and come with all those neat little bells and whistles that really don’t mean all that much but sure do impress educators, who like Diabetic Investor, are getting very bored with seeing the same old, same old.
Given all this, is it really necessary to say the Roche system doesn’t stand an ice cubes chance in hell when put into a real world setting. Is it even necessary to point out that when it comes to diabetes devices the Roche name is about as popular as Penn State these days? Should we ask what happened to the Solo or should we just chalk it up as another Roche blunder? (We actually shouldn’t be too hard on Roche with the Solo as Medtronic with all their money and talent cannot come up with a OmniPod competitor either.) Although there is no way to prove this Diabetic Investor actually believes the reason Roche wanted to get back into the insulin pump market is that they wanted to prove once and for all time that they really are the worst run diabetes company on the planet.