Big data joins the fray
It was just a matter of time before big data entered the wacky world of diabetes. As we noted just yesterday gathering data isn’t the issue as the technology to gather and transmit data exists today. What’s been missing up to this point is how to take this data and transform it into actionable information. Information the patient can use to more effectively manage their diabetes which hopefully will lead to better outcomes, which then leads to lower costs.
It should as no surprise then that insulin pump maker Medtronic (NYSE:MDT) has partnered with IBM and their Watson Health unit. According to a company issued press release;
“IBM (NYSE: IBM) and Medtronic (NYSE: MDT) today announced that they will work together to combine powerful analytics and cognitive computing with diabetes medical devices and health data to develop a new generation of personalized diabetes management solutions. People using Medtronic diabetes solutions could benefit from new solutions developed in collaboration with IBM’s newly-formed Watson Health unit.”
This deal is the fifth diabetes related deal in a month for Medtronic as they attempt to move beyond sales of insulin pumps and into a provider of diabetes management solutions. Solutions which go beyond building an artificial pancreas although this deal should help the company move ever closer to that goal.
Like everyone else in diabetes Medtronic understands that in the future it will be outcomes that drive reimbursement. They also know full well that they cannot remain in diabetes as just a provider of hardware. As we have noted previously the dynamics of insulin pump market are changing and becoming more challenging. We’ve said it before and we’ll say it again the insulin pump market is not large enough nor is it growing fast enough to support the companies already in the market let alone the many who seek to enter the market.
The real growth in diabetes will come from combining hardware with patient solution systems. Although it’s taken longer than we anticipated the day is getting ever closer when a patient is prescribed a diabetes management system rather than individual pieces of the system. This system will have everything the patient needs to manage their diabetes, drugs, devices and software. It will also create some very interesting alliances in the wacky world as at least today there is not one company that has all the pieces to the puzzle.
For the moment Medtronic is strictly an insulin pump/continuous glucose monitoring company. Yet imagine the possibilities IF they say partnered with Lilly (NYSE:LLY) who besides having a complete insulin portfolio but also a comprehensive portfolio of oral medications along with a long-acting GLP-1. As Medtronic attempts to move beyond the Type 1 market and into the Type 2 market, such an alliance makes sense, especially when big data is factored in. It’s not difficult to imagine taking data gathered by Medtronic devices, applying sophisticated analytics and then outline for the patient a diabetes management plan.
Considering their push into the Type 2 market and the fact that insulin is not the solution for every Type 2, Lilly could provide not just the insulin for Medtronic pumps but provide the non-insulin drugs. Given that the diabetes drug market is just as competitive as the device market, such an alliance would be a win win scenario. Lilly sells more drugs and Medtronic more devices/solution systems.
It should be noted that besides Medtronic, Johnson and Johnson (NYSE:JNJ) and tech giant Apple are also working with Watson Health. This sets up some truly juicy possibilities given that JNJ has a glucose monitoring unit with LifeScan, an insulin pump unit with Animas and also has an insulin patch pump. It’s also well known that Apple has been building their diabetes unit. It would come as no surprise if just as Medtronic moves towards selling diabetes management system that JNJ does the same thing.
Diabetic Investor also believes that a company like Dexcom (NYSE:DXCM) who is already partnered with Animas on the Vibe pump and whose system delivers readings to Apple devices including the new way cool Apple Watch will become even more valuable. Dexcom too understands that selling sensors alone won’t get the job done that to expand beyond insulin using patients they too must provide patient solutions. Think of the possibilities when analytics are applied to the data gathered by the Dexcom CGM, this could be a transformational experience and not just for insulin using patients but all patients with diabetes.
We also see another positive coming out of IBM entering this wacky world. Up until this point a huge obstacle standing in the way of interconnected diabetes management (IDM) becoming the standard of care has been who would analyze all the data gathered from the patient. Ideally that would be the patient’s physician however they aren’t paid to do this and few have the time or staff to do it even if they were paid for data analysis. However physicians would likely embrace a system which did the all the data analysis and then outlined what steps if any the physician should relay to the patient. Just as device and drug reimbursement will be based on outcomes, so too will physicians be compensated on getting patients under good control.
The most positive aspect of this deal combined with what we witnessed this week at HiMSS is that companies are beginning to understand that this wacky world is no longer about hardware. That in the future it’s outcomes that matter and gathering data by itself will not help patients achieve better outcomes. That this data must be transformed into information the patient understands so the patient then takes action.
Another benefit of combining data with analytics is it’s possible to make the patient’s life easier. This does not minimize the need for patient education as education will still play a huge role. However the less work that needs to be done by the patient and the more that can be done by systems the better. Let’s be honest here the majority of patients have enough to do already and would likely embrace any system that offered them easy to follow tips on how to more effectively manage their diabetes. Tips that would no longer be based on guess work but on their own data after analytics have been applied.
A truly great side benefit of this news is the possible deals that could result. The fact is no one has all the pieces of the puzzle.
Yes this wacky world is about to get even wackier only this time the patient may actually benefit from the wackiness. It’s about time!!!!!
