Chaos in Northridge
This past Thursday Fran Kaufman Chief Medical Officer at Medtronic Diabetes submitted her resignation. Ms. Kaufman has told some colleagues that she will at long last retire which we find very interesting as when we talked with Fran at ADA, she indicated she had no plans to retire. While we suppose it is possible that someone as respected as Fran would resign so she could retire we don’t think so. If this was a real retirement Medtronic would have thrown her a party.
Fran Kaufman is one of the more respected leaders in diabetes. She has devoted her entire career to helping people with diabetes. She may not be on the Mt Rushmore of all-time diabetes greats but there is no question Fran belongs in the Diabetes Hall of Fame. Someone of Fran’s stature does not resign so she can retire.
So, what exactly is going on here we don’t know but we sure can speculate. First and foremost, the 670G was Fran’s baby. Fran championed this system from the moment she became the Chief Medical Officer. The 670G had no stronger advocate. However, as we have been reporting things haven’t been going so well since the baby was born.
Now let’s be very clear here we have not spoken with Ms. Kaufman, but we have reached out. At this writing we have no comment or any communications from Ms. Kaufman. Yet our sources inside the company note that Fran and the new management team have been at odds. Now just what this disagreement is we don’t know but our gut tells us it’s over the 670G. Fran at her core is a strong patient advocate and while she understands the business aspects of diabetes, she like others who have come before her at Medtronic puts the patient first.
This cannot be said about the new team running Medtronic Diabetes a team that cares about one thing and one thing only – the next quarter. A team which decimated their efforts in Type 2 not because this unit was not making progress, no these folks got the ax because it was going to be a long time before they made any money. This team which seemed to have it all together when they first took over has shown their true colors as this is all about quarterly earnings, bonuses and corporate advancement.
The fact and yes these are facts the 670G for all its promise and hope was not ready for primetime when the FDA approved it. The company could have used this earlier than anticipated approval to their advantage but decided instead to rush the system onto the market. They did this knowing full well there were manufacturing issues with the sensor.
Let’s clarify what we mean when we say the company knew about the manufacturing issues. The folks in Northridge knew but that doesn’t necessarily means the management team knew as the team or at least the leader of the team isn’t based in Northridge and is rarely in Northridge. Whether the team relayed this information or not is open to debate. Whether this information after being relayed was acted upon is also up for debate.
This is part of the problem as our sources inside the company indicate the growing distance between management and employees. As we have noted in the past there are some highly dedicated quality people at Medtronic Diabetes, employees who care about the patient and have no dreams of becoming the next CEO. All they want to do is help patients with diabetes. They unfortunately have to take orders from those above them and who according to our sources aren’t happy with the orders they are getting.
Listen we understand that management and employees don’t always see eye to eye, but this is more than that.
As we have learned in recent weeks the company is facing two whistleblower lawsuits and is now the subject of an FDA investigation. An investigation which could have serious repercussions not just at Medtronic but the entire insulin pump market. Being the staunch patient advocate that she is perhaps Fran said enough is enough I’m not going to take the hit for a problem I did not create so it’s time to go. Perhaps she saw the handwriting on the wall knew management was ignoring the problems or worse and said I cannot be part of this. As we said earlier someone of Fran’s stature does not resign so she can retire.
Like so many things now at Medtronic Diabetes this resign to retire story is just that a story to divert attention from the real problem. A problem that is not going away no matter how hard they try to sweep it under the rug. Based on our knowledge of the FDA investigation the agency is gathering an extensive portfolio of information and has increased the scope of the investigation. Thorough is the best word we can use to describe this investigation.
We sometimes wonder what the late Al Mann would say about all this. Al built MiniMed hired the best people he could find but most of all put the patient first. He understood fundamentally that making money and putting the patient first were not opposite goals that they in fact went hand in hand. Ever since Medtronic bought, they have been trying to kill the goose that lays the golden eggs. They have forgotten that patients come first now profits and quarterly earnings come first.
They have forgotten they have a monopoly they own the insulin pump space and there is no need for any of this.
With Fran now gone we can only hope there is someone who will stand up for the patient, someone who will tell management not what they want to hear but what they NEED to hear. It’s truly sad that it had to end this way as with all her great work in diabetes Fran deserves the party the gold watch and nice send off. But as is the standard now at Medtronic Diabetes it’s all about profits and damn anything that gets in the way of that.