All in the family

All in the family

Yesterday Diabetic Investor received notice that Medtronic (NYSE: MDT) has formed a strategic partnership with Canary Health. According a company issued press release;

“Canary Health, a leading provider of proven digital health self-management programs, today announced a partnership with Medtronic plc that will expand their diabetes care offerings with Canary Health’s self-management suite for pre-diabetes, diabetes and related comorbidities. Medtronic will be a reseller and distributor of Canary Health’s full suite of chronic disease self-management programs, including its CDC-recognized Diabetes Prevention Program(DPP). Additionally, Canary Health and Medtronic plan to develop additional solutions that leverage Medtronic’s devices, services and infrastructure as well as Canary Health’s suite of behavior change programs, design expertise, and deep user engagement experience.”

This partnership falls directly in line with the company’s attempt to expand beyond their core insulin pump business and go after the larger non-insulin using market. It also gives the company an entry pathway into the large “pre-diabetes” market. As we have been reporting Medtronic like others in this space understands that in the future diabetes management isn’t about hardware. In the future diabetes management is all about systems, systems which include not just the hardware a patient uses but a full suite of offerings including drugs, apps and web sites.

The announcement came from Canary President and CEO Adam Kaufman, who just happens to be the son of Fran Kaufman Medtronic’s Chief Medical Officer and Vice President Global Medical, Clinical & Health Affairs | Medical Affairs. But the family connection does not end there, Canary’s Chief Medical Officer is none other than Neal Kaufman, MD who is Fran’s husband and Adam’s father.

Now before we go any further we want to make it clear that we are very familiar with the work Canary has been doing. And by all indications the programs they offer work. Still one can’t help but wonder how this family affair played into Medtronic’s decision making process. Diabetic Investor reached out to Fran who stated via email – “I was not ever involved in this deal and recused myself in every meeting, and never was given slide decks.”

According to a Medtronic spokeswoman;

“Dr. Francine Kaufman is focused on the clinical side of Medtronic’s business, whereas this deal is primarily geared toward expanding our diabetes service offerings. When we scanned the market for a potential partner to help us make the move into pre-diabetes care, it was immediately clear that Canary Health’s proven self-management programs are the best in class, having been developed over several years and validated with several published research studies.”

We have no doubt that Fran did recuse herself from this deal however it is also true that everyone at Medtronic knows of the family connections and it would be foolish to assume that these connections did not play into the company’s decision to form this partnership. Again let’s be clear here we are in no way saying that there is anything wrong with the programs Canary has developed, there is plenty of data that proves this. Nor do we want to imply that anything nefarious is going on here, knowing Fran and the Kaufman family we know they are committed to battling diabetes.

Still there is just something about this deal that makes us queasy. Years ago when the first Mayor Daley was ruling Chicago with an iron fist during a press conference a reporter asked about a lucrative contact between the city and an insurance company. It just so happened that the Mayor’s son-in-law worked at the insurance company. The gist of the reporter’s question was, did this family connection play any role in the city’s decision to give this contract to the company. Now keep in mind this way before the days of political correctness – the mayor stood at the podium looked at the reporter and said “Of course it did, what you think I’m not going to help my family.”

Oh for the good old days.