Yesterday Novo Nordisk announced they were expanding their partnership with Flex Digital Health. Per a story on the FireceBiotech web site;
“Novo Nordisk has tapped Flex Digital Health’s internet of things platform to create new digital tools for people with diabetes. The duo previously teamed up on connected insulin pens, two of which are slated to launch early next year.
Their existing partnership focuses on building connectivity into devices, such as nonconnected insulin pens, so that patients and physicians can see exactly which insulin a patient takes, at what dose and when the patient administered it.”
It seems that all the major insulin companies have decided its time to enter the device business. Lilly has made the deep dive working on their own version of connected insulin pen plus an insulin pump. Sanofi, through their partnership with Google, also has a patch pump deal and their own connected pen.
Before we go into a deeper analysis a couple of quick thoughts;
1. It is no longer a question of if Tyler will get here but when.
2. It would not surprise us if Novo joined the race to have their own insulin pump.
3. Dexcom is a huge winner here as all the insulin companies want their toys to work with the Dexcom sensor.
4. It should go without saying that the toy market will quickly commoditize.
The risk here is that pharma companies have never been particularly good at the device business. The possible exception here would be Novo who has a had success with insulin pens. However, we’re not sure this success will translate into the “smart” pen market as it’s not the toy that really matters here but the app the toy communicates with, the sensor and the insulin dosing algorithm. We know we sound like a broken record but the hardware in this system is the least important piece.
This also bodes well for Dexcom now that they own TypeZero. The question is will Lilly, Novo or Sanofi use the TypeZero algorithm, or will they get provincial and want to use their own algorithm. It would seem logical for these companies to use the TypeZero algorithm not just because it’s the best but it’s also the shortest distance between two points, why reinvent the wheel when you don’t have to.
Lost in this race to come up with the coolest toy in the toy chest is and again we are repeating ourselves the key is getting patients to play with the toy. What will likely end up happening here is that all the insulin companies will play the same game just with new equipment. The toy store is no different than the insulin market as you have to get the toy into the hands of patients which means formulary position is as important, actually more so, than whether you have the coolest toy.
Just as payors are in the catbirds seat when it comes to demanding discounts and/or rebates for insulin, they will do the same with the toys. As valuable as these toys can be payors really don’t care about that, they care about money. With multiple systems available all of which do basically the same thing the same way why would it be any different. Keep in mind that Medtronic does not have the best toy in the insulin pump toy chest however they do own the most valuable piece of real estate as they own the formulary.
At some point these companies will either change their mindset or be doomed to playing the same game with payors. Rather than selling drugs or toys or drug and toy combinations they will have to sell diabetes management systems. Systems which put a premium not on performance but usability. Systems that are not sold piece by piece but sold as a complete diabetes management kit.
Think of it this way in the smartphone market there are two basic platforms, Apple and Google. Google owns the majority of this platform as Android not only works with their own smartphone but multiple pieces of hardware. Apple on the other hand has chosen to be proprietary as the IOs operating system is only compatible with Apple hardware. While several popular Google apps work on the Apple platform the reverse is not always true. Yet what both Google and Apple have in common is the place a premium on usability, making things easy to use. They understand the customer experience.
The same cannot be said for the toy makers in diabetes as they tend to think clinically. Some like Tandem have put some thought into the user experience. Yet the majority have forgotten about the people who are supposed to play with their way cool whiz bang toy. Even if they can get the toy into the patients hands it’s meaningless if the patient then doesn’t play with it. We’ll end up in the same place where we are today, lots of great toys but little improvements in patient outcomes.
We can’t help but feel that all this effort, all this money will create nothing but more commodities. That if more thought is not given to the user experience, not much will change. As we keep saying the hard part is not helping the patient with how to manage their diabetes, the hard part is getting them to want to manage their diabetes.