Data the new battleground
Dexcom (NASDAQ:DXCM) collaborates with Google, Medtronic (NYSE:MDT) hooks up with IBM Watson Health and a host of glucose monitoring companies delivering data to the cloud. Welcome to the new battleground in diabetes – data. For years high tech companies like Google have been using data combined with advanced analytics to change the way we live. Anyone whose done a Google search or posted on Facebook has seen firsthand the impact of big data. As we have noted previously Diabetic Investor believes it’s just a matter of time before health insurance is sold like auto insurance where the cost is linked directly to data.
Now that nearly every diabetes device transmits data to the cloud the issue is no longer how to get the data, the issue now is what to do with all this data. Many seem to believe the most relevant use of this data applies to patients with Type 1 diabetes. The quest to develop a true closed loop insulin delivery system is dependent on analytics being applied to data. As we noted on many occasions the hard part is not developing the hardware rather having the correct algorithm imbedded into the hardware. This is not to say better hardware is not needed rather that it’s not the hardware which makes decisions for the patient. The hardware merely does what the software tells it to do.
Yet we see an even bigger opportunity in the Type 2 market and not just because 90%+ of the patient population has Type 2 diabetes. The central fact is Type 1 and Type 2 diabetes are vastly different. In fact we would argue it’s actually easier to develop algorithms for Type 1 patients then it is for Type 2 patients. Again as we have stated before Type 1 patients who must use insulin once armed with information can take immediate action. This is not the case for Type 2 patients the majority which use oral medications to manage their diabetes.
When a Type 1 patient sees their glucose levels trending upwards they can administer additional insulin to offset this rise. The same cannot be said for a Type 2 patient in the same situation, it’s not as if they will take more metformin.
The real value of big data with non-insulin using Type 2 patients is that it can detect more quickly whether the patient’s therapy regimen is working. A major issue has always been the treat to failure mentality followed by physicians. While physicians have become somewhat more aggressive in treating Type 2 diabetes the fact remains they wait until they have conclusive proof that the existing therapy regimen isn’t working before making adjustments to that regimen. Armed with data the possibility exists that physicians will know much sooner whether a therapy regimen is or is not working. When not working changes in the therapy regimen can be made sooner and hopefully prevent many of the costly complications associated with poorly controlled diabetes.
The missing link in the Type 2 world has been a cost effective, simple method for gathering the data. Yes there are many insulin using Type 2’s who use a CGM but few non-insulin using Type 2’s. Should the Dexcom Google collaboration yield the desired results this problem will be solved. The Dexcom Google collaboration also has another compelling advantage as it lowers the burden for the patient. Rather than checking their glucose manually as they do now, a CGM gathers this information for them. This is not say the days of conventional fingerstick monitors would be over rather another reason why these systems are slowly becoming obsolete.
The central fact is the battle is no longer getting the data to the cloud. Nor is the battle over who has the best hardware. The battle is what to do with all this data once obtained, how to translate data into actionable information. Should this happen diabetes management could change forever and that’s not a bad thing at all. Interesting times ahead.