A picture says it all

A picture says it all

A Chinese philosopher once said; “A picture is worth a thousand words.” This morning Diabetic Investor ran across two print advertisements, one for the Wal Mart ReliOn glucose monitor and the other for the Bayer Contour®Next system, these ads capture in a nutshell capture why the BGM market is headed down the tubes we’re not sure what does. Now Diabetic Investor does not mean to pick on Bayer necessarily as the ads for the other major branded products in the category aren’t much different.

While the Bayer ad touts a host of features like Second-Chance™ Sampling, Multipulse™ accuracy technology and No Coding™ technology; the Wal Mart ad by contrast touts 50 test strips for 9 bucks. This is why the major meter companies will not survive in the new world order of BGM where price trumps performance. The fact is the majors still believe that whiz bang technology that most patients don’t understand or for that matter care about will somehow drive sales. They falsely believe that physicians who treat these patients will write a prescription for their particular brand when in fact the majority of scripts written are not brand specific.

Yesterday Diabetic Investor had an interesting conversation with a meter company who wants to turn the BGM reimbursement model upside down. Rather than charge for a vial of 50 test strips, this company wants to charge on a per strip used basis. Basically they would give away vials of 50 test strips for free, that’s right free, and charge $2 for each test strip used. Doing some simple math that means should a patient who uses all 50 test strips in the company would receive $100, compared to a patient using the Wal Mart system who is paying 18 cents for each strip used. Now this company claims that the $2 per strip cost covers more than the strip itself but support and coaching for the patient. The ultimate goal help the patient achieve better outcomes.

Let’s assume for a moment that this company is correct and that using their system will achieve better overall patient outcomes, will payors be more adaptable to their $2 per test reimbursement model. Well given the wacky world of diabetes anything is possible but Diabetic Investor doesn’t think so. The fact is while everyone talks about achieving better outcomes for patients, getting people to properly control their diabetes the bottom line for payors is the bottom line.  Listen when a patient can go out and buy a vial of 50 test strips for 9 bucks, which is lower than what many patient’s co-payments are, why would the payor increase their overall cost by paying $2 per test even if these patients did achieve better outcomes.

Folks it’s about time everyone begins to realize that as the old children’s tale goes Humpty Dumpty has fallen off the wall and all the kings’ horses and all the kings’ men cannot put Humpty Dumpty back together. The BGM market as we once knew it is over or to put in tennis parlance GAME SET MATCH!!!