Are the adults getting ready to enter the room?

Are the adults getting ready to enter the room?

With nearly a billion users it’s understandable that diabetes companies are flocking to Facebook, hoping to generate buzz for their particular drug and/or device. Although not every diabetes company has a Facebook page the number who do continues to grow and now includes Sanofi (NYSE:SNY), Medtronic (NYSE:MDT), Novo Nordisk (NYSE:NVO), Accu-Chek and Dexcom (NASDAQ:DXCM) just to name a select few.  As popular as Facebook has become many are beginning to question whether Facebook is actually a cost effective marketing tool. A question that was covered at great length in an article that appeared in Tuesday’s Wall Street Journal entitled; The Big Doubt Over Facebook.

Here are just few items from the article;

“The question with Facebook and many of the social media sites is, ‘What are we getting for our dollars?'” said Michael Sprague, vice president of marketing at Kia Motors Corp.’s North American division.”

“The area is a very sexy area, and clients have gone in almost willy-nilly, because it’s fashionable to do so,” Mr. Sorrell added. But now that such ad spending has ramped up, he said finance departments “are increasingly starting to look at the value of those investments.”

On Tuesday, research firm eMarketer released a study showing 84% of executives it recently polled said that social media campaigns had boosted the effectiveness of sales and marketing efforts. Yet eMarketer also said that “while measuring followers and Facebook ‘likes’ provides marketers with a hard number, no one yet knows how those numbers translate into a quantifiable return for brands.”

There are some in the diabetes space who believe that social media is the future of not just marketing their particular drug or device but also a tool to train and support their customers. Diabetic Investor is aware of at least two device companies, Roche and Sanofi, who are actively cultivating a relationship with bloggers, while companies such as Animas are providing financial support and Johnson and Johnson (NYSE:JNJ) owns perhaps the most popular diabetes web site

From the beginning Diabetic Investor has been somewhat skeptical over the role that social media should play in the diabetes world. The fact is anyone with a something to say can put a blog and attract a following. While there is several excellent diabetes blogs there are also an equal number of nut cases. The simple fact is there are no standards or vetting process to insure that the patient with diabetes is getting accurate information.

Recently Diabetic Investor had the opportunity to meet some of the more reputable diabetes bloggers and came away with a new understanding of why they do what they do and more importantly what they receive in return. We were surprised to learn that many of these bloggers received a “therapeutic” benefit, that sharing their experience has helped them better manage their own diabetes. What did not surprise us was their passion for diabetes. While most did see the financial benefits from running a successful blog, making money was not their primary goal the facts is these distinguished group really gives a damn about diabetes and wants to help as many patients as possible.

However, with diabetes growing at epidemic rates there are also an equal numbers of blogs that do nothing more than prey on patients with diabetes offering false hopes of a cure or worse promoting a product that does nothing more than line the pockets of the blogger. Given the many scams and professional snake oil salesmen unfortunately associated with diabetes this is not a surprise. We can only hope that the companies in the diabetes space, not always the sharpest knives in the drawer, can distinguish between the reputable bloggers and social media sites and the charlatans.

We further hope these companies, many of whom are publicly traded, remember why they are in business and something called return on investment. It may be way cool to generate buzz and create brand awareness but the bottom line is unless this buzz and brand awareness turns into real sales all this time, effort and money will be wasted. Frankly Diabetic Investor is shocked that an industry which was noted for doing the numbers seems to have become intoxicated on social media’s marketing possibility.  It’s also astonishing that at some companies management is not being held accountable for the dollars they spend, there are no revenue metrics that actually show that the millions they are spending are turning into real sales and not just likes on a Facebook page.

As we have noted on several occasions the diabetes industry has undergone a vast amount of change and many of the experienced executives have either been forced out or have decided to get out. While some still remain, the fact is many of drug and device companies are now being run by either bean-counters or inexperienced management teams who know a lot about social media but next to nothing about diabetes or running a successful diabetes company or unit. These inexperienced teams have become fascinated with concepts like interconnected diabetes management systems or a true closed loop insulin delivery system but seem clueless as to real heavy lifting, and possible pitfalls, that lie ahead.

Diabetic Investor has said it a thousand times just because something can be done does not mean it should be done. The glucose monitoring area is an excellent example of this, while there is no question that we have a seen a tremendous improvement in the glucose monitoring technology – alternate site testing, smaller blood samples, fast test results and connectivity with computers – we have not seen average testing frequency increase nor have we seen a corresponding improvement in patient outcomes. The honest truth is BGM companies never understood that patients will not perform any task or test if they don’t understand what the test result means or how to personally use that result for their own benefit.

Another example is the quest to develop smarter insulin pumps and ultimately an artificial pancreas. Like BGM, there is no question that insulin pumps have advanced greatly since they were first introduced however also like BGM we have not seen a corresponding advancement in patient outcomes and in some respects have gone backwards. Take a look at two of the newer insulin pump systems the OneTouch® Ping® from Animas and Revel™ from Medtronic. According to the FDA’s MAUDE database from 1/1/10 until 3/31/12 there have 17 deaths associated with the OneTouch Ping and 7 for the Revel. Over that time frame there have been 143 malfunctions reported for the Revel and 500 for the Ping. Diabetic Investor is also aware of customer’s complaints with both systems and it’s also true that both companies have been hit with a series of recalls.

The situation at Medtronic is particularly troubling as it seems as though several of their field sales reps and pump trainers have gone to the company about the issues they are seeing with the Revel. Issues which are hurting their ability to do their job and creating concern in the pump community. For reasons neither they nor Diabetic Investor understands the company is not responding to their concerns. Seeing first-hand the impact these issues can have on a patient, these reps and pump trainers are no longer taking their concerns to management but instead are now going directly to the FDA.

While Diabetic Investor does not necessarily have an issue with “new blood” in diabetes and there is no question given the many mistakes made by the “old guard” that new and fresh ideas where needed, however one thing that can be stated about the “old guard” is that they NEVER forgot that the patient comes first. Although not all their ideas where great these people understood that diabetes is not just a chronic disease state but a lifestyle, they understood diabetes is also a business and most important of all they were held accountable. Accountable not just for profit/loss but to the quality of the drugs and/or devices they were associated with.

In their zest to maximize profits it seems many of the companies in the space have forgotten something written in a Forbes article entitled “Thoughts on the Business Life” which stated; “When a man with money meets a man with experience, the man with the experience ends up with the money and the man with the money ends up with the experience.” To paraphrase the title of a great song by the Who, the kids are alright they just need to understand that sometimes it doesn’t hurt to have an experienced adult there to help them avoid the mistakes they made.