In Fighting and Finger Pointing – the Insulet Saga Part Three

In Fighting and Finger Pointing – the Insulet Saga Part Three

Margaret Graham once wrote; “Conscience …..  is the impulse to do right because it is right, regardless of personal ends.”  Well it seems that some of the folks at Insulet (NASDAQ:PODD) actually have a conscience and are speaking out, or perhaps we should say at, others who are purely driven by the bottom line. As Diabetic Investor has noted over these past few days’ things aren’t going very well at the company and it seems the pressure is mounting.

According to multiple sources inside the company a rife has developed between some members of management.  As Diabetic Investor has reported in order to hit their third quarter sales numbers the company has been shipping pod orders to existing patients even though these patients did not order more pods. When patients have called the company to ask why they received pods they did not order, customer service reps at the company have been telling patients that the company experienced a computer glitch which inadvertently placed the customer into the automatic refill group by mistake.

Insulet, like all pump companies, offers their patients the option of having pods automatically shipped to them rather than having to call the company each time they need more pods.  This opt-in program greatly simplifies the life of OmniPod users as new pods automatically show up every month or quarter.  Considering that pods only last for three days it’s not that difficult to figure out how many pods a patient goes through. This opt-in program is a win-win, as the company develops a predictable income stream and the patient doesn’t have to worry about running out of pods. Even though this is a very good program there are still patients who prefer, for whatever reason, not to opt-in to this program and prefer instead to order more pods by calling the company.

While all this seems simple and innocent, it should be noted that since patients must opt-in to this program it would be illegal for the company to ship pods without the patient’s authorization. Although Diabetic Investor is no legal expert, there are some who believe that the company could face fraud charges as they are billing the patient’s insurance company for the pods that have been shipped without the patient’s authorization.

Where this gets really interesting and somewhat messy is it seems there is nothing wrong with company’s computer systems. Again according to sources inside the company it seems as though the company’s Chief Information Officer isn’t all that pleased that customer service reps are telling patients that the reason their getting pods they have not ordered is due to this mysterious computer glitch. Diabetic Investor has reached out to the company several times to hear their side of the story but as of this writing management is not responding to our repeated emails and telephone calls.

Perhaps the most amazing and somewhat stunning news is the company’s Board of Directors continues to sit on the sidelines. This is like the captain of the Titanic sitting in his stateroom having tea while his ship is taking on water and slowly sinking.

Equally disturbing is the impact all this infighting and finger pointing is having on the employees of the company who must sit around and watch these events transpire before their very eyes. Many of whom are beginning to wonder whether management has any clue as to what’s really going on at the company.

Needless to say the company, which is facing several issues, needs this situation about as much as a sinking ship, needs more water.  The situation has become so bad that many observers are concerned that even if changes are made the damage already inflicted on the company may be irreversible.

The truly sad part here is the people who will get hurt most by all this craziness are the people who use the OmniPod. While the OmniPod is not perfect, there is no questions thousands of patients enjoy the benefits of tubeless pumping.

That being said Diabetic Investor believes the company is in serious danger of imploding and that major changes are needed.  Insulet proved there is a market for wireless pumping and brought the benefits of insulin pump therapy to patients who would have never considered pumping before.  To Diabetic Investor it would be a travesty to see all this infighting and finger pointing bring down the company. But this is exactly what will happen if the company’s Board of Directors continues to sit on the sidelines. The fact is these people not only have a fiduciary but moral responsibility to step in and see that changes are made. Their lack of action to date shows that another old saying is alive and well at the company in that no matter how hard one try’s you can’t grow a conscience.