Bet Medtronic didn’t count on this
It seems like the good folks at Medtronic (NYSE:MDT) in their zest to promote their latest whiz band technology, a pump that communicates with a car, missed a critical aspect as the intellectual property for this technology is actually owned by someone else. According to sources in the diabetes device world, the IP for this whiz bang technology was actually first developed at Therasense, which is now owned by Abbott (NYSE:ABT). Now Diabetic Investor is not yet sure if Abbott bought this particular IP when they acquired Therasense or if the IP is actually owned by an ex-Therasense executive, who just happens to be employed at another insulin pump company.
Considering that IP is a contact sport in the diabetes device world and that companies spend millions protecting their IP, it would hardly be surprising, that if this technology ever makes it to market that Medtronic would face a legal challenge. Now before anyone starts counting the millions that could be gained from a lawsuit keep in mind that in order for anyone to collect the IP in question actually has to have value; which in this case is dubious at best.
What Diabetic Investor finds so amusing here is how the main stream media has picked up on this story and shows just how out of touch main stream media is with the diabetes world. But this is not the first time, nor will it be the last time, the main stream media; who is just as fascinated with useless technology as many diabetes devices companies, is duped into writing a story. Back in the day when Diabetic Investor was still a print publication, this same situation occurred when a company developed a laser lancing device.
Back in January 1999, Diabetic Investor penned a piece entitled “Laser Technology Makes Its Way To The Diabetic World.” In this article we wrote about a device made by Cell Robotics and marketed by Chronimed, Diabetic Investor does not believe either company still exists, called the Lasette. Although Diabetic Investor didn’t think much of this $1,000 device which only drew blood, the story had made its way into the mainstream media and Diabetic Investor, wanting to protect investors thought we should expose this device for what it really was; a huge piece of junk that didn’t stand a chance in the marketplace. Needless to say the Lasette never made it and like so many pieces of useless diabetes technology (remember the GlucoWatch or the Amira AtLast glucose meter) fell into oblivion.
The fact is the diabetes device world is littered with examples of useless technology that never stood a chance of being commercially successful. Yet in spite of this fact investors and companies continue to pour millions of dollars into what they think are whiz bang technological advancements. Technologies which, even if they make it to the market, will only be used a mere handful of patients. Only in the wacky world of diabetes devices does a company believe that spending millions on a project that yields next to nothing in sales is good business.
The truly sad part here is that had these companies spent a just a fraction of this amount on improving existing technology patients would have better insulin pumps and glucose monitors. This is what makes projects like a closed loop insulin system so hysterical. Is there anyone out there who truly believes such a system will make it through the FDA, when these companies can’t seem to get their existing systems to work properly? This is not to say that we do not learn from these many failed attempts at improving technologies, however given the money and time wasted here on has to question whether patients are actually seeing better systems.
Look at all the advancements we have seen over the past few years, no-coding test strips, alternate site testing, smaller blood samples and “smart” insulin pumps. Then take a look at market realities, patients are not monitoring their glucose levels more frequently and the FDA’s MAUDE database is filled with reports on how pump patients aren’t properly trained to use these “smart” pumps or how these pumps have malfunctioned.
The bottom line is too many diabetes device companies have forgotten that there is real live human who is using all this fancy technology and that the vast majority of patients could care less about all this advanced technology and want systems that make managing their diabetes easier. The fundamental flaw here is that too many of these companies see their customers, the patients who actually use the products they make, as a nuisance. Until these companies put the patient’s interest ahead of their technology obsession nothing will change and we will continue to see millions of dollars and countless hours wasted.