A match made in heaven?

A match made in heaven?

In the old day’s marriages were arranged, the idea of two individual people meeting and falling in love was unheard of. Back then a marriage had more to do with business then love. When it comes to this wacky world the stars are aligning for what likely will be an arranged marriages between big data, big pharma and big device. Like the arranged marriages of old these arranged marriages are all business and in some cases a matter of survival.

We note this after listening to Lilly (NYSE: LLY) who held a review of their research and development projects. Now we all know that Lilly has the most robust portfolio of diabetes treatments but the future for Lilly and diabetes aren’t the diabetes drugs in the pipeline. There is nothing wrong with any of these offerings rather the future of diabetes management is no longer about which drugs are in the pipeline. No the future of diabetes management is all about systems; systems which marry information with drug delivery. Systems which transform data into patient relevant patient actionable information.

During today’s presentation Lilly spoke with great enthusiasm about … wait for it … Diabetes Connected Care or what we’ve been calling interconnected diabetes management (IDM). Whether it’s a closed loop system using an insulin pump or an open loop system using a “smart” insulin pen, the future of diabetes management is directly tied not just to gathering the data, this quite frankly is the easy part. No the future of diabetes management is transforming this data into patient relevant patient actionable information. Information which is delivered to the patient in a format they are comfortable with and will respond too.

The reality is every diabetes drug and diabetes device company is beginning to realize future sales will be directly impacted by big data. That if they are not involved with big data they will lose share to companies who are. Although Diabetic Investor continues to believe that Google made a bad choice when they partnered with our wine drinking friends in France, Sanofi (NYSE: SNY) could not have picked a better partner. Who knows big data better than Google?

This is the same reason Medtronic (NYSE: MDT) partnered with Watson Health and why Johnson and Johnson is also partnered with Google and Watson. Although we should note its not quite clear how these relationships JNJ has impacts their diabetes franchises.  Still the trend is clear, big data and diabetes management are match made in heaven, as everyone wins.

The fact is the drug and device companies have finally awoken to the fact that the products they make are becoming commodities. Device companies in particular realize that the hardware they make is only as good as the system its attached too. Drug companies realize that bringing truly innovative therapy options to market is not just very expensive, but the regulatory pathway is more difficult plus the ultimate payoff isn’t what it used to be. This won’t stop drug companies from being innovative rather they realize for the drugs they have now this marriage with big data is the difference between being a market leader or also-ran.

We should also point out the obvious here as both Medtronic and Dexcom (NASDAQ: DXCM) will be winners as their CGM systems gather critical data. Here we give the edge to Dexcom not just because they are partnered with Google, which is a big advantage. The reality is Dexcom has a better sensor and when it comes to big data accurate data is mission critical. Medtronic is getting better in this regard but they aren’t there yet.

Perhaps the best way to think about this is to consider that there are now 5 long-acting insulin’s, three short-acting insulins, 3 once-weekly GLP-1’s, 5 DPP4’s and 3 SGLT2’s not to mention metformin. There are over 40 conventional glucose monitors and 4 real insulin pumps and several “dumb” patch pumps. And yes we know we are leaving some stuff out but we’re just counting the brands that have real market share not the many who want to enter this wacky world. Yep, it’s a crowded marketplace in drugs and devices. It’s also getting harder not just to distinguish one product from another but to get all important formulary placement.

With outcomes based reimbursement coming drug and device companies, those with a working brain cell which rules out Sanofi for sure, understand that big data is the difference between good or bad outcomes. That IDM is no longer a pipedream but an essential part of their strategy to succeed.

Yes, ladies and gentlemen get ready for some very interesting arranged marriages, and just for good measure also expect some nasty divorces. For as much as diabetes drug and device companies have at stake so too do the big data companies. Listen whether its Google, Apple, Facebook, whoever these high tech cash rich companies don’t want their reputations tainted by any diabetes company. Especially the ones who can’t shot straight or hit water if they fell off the Queen Mary.

As Momma Kliff used to say; “It doesn’t matter how good someone looks on the outside that counts, a successful marriage isn’t about physical appearance, it’s about two people working together for a common goal.”