It’s different this time
The diabetes community, more specifically the insulin pump community, is still trying to digest the stunning news that Johnson and Johnson (NYSE: JNJ) is shutting down Animas. Many just cannot fathom that JNJ could not find a buyer for this unit and keep the company going. While Animas patients have plenty of time to find a new pump this does not ease the pain many are feeling. Keep in mind an insulin pump is not just a medical device it is a life sustaining device. This is not a simple glucose meter; an insulin pump is akin to a microcomputer that keeps the patient alive.
Although pumps have commoditized over the years insulin pump patients have a unique relationship with their pump. Once they have learned how to use their system a certain level of comfort develops which is why so many patients hate switching between brands. Yes, there is a subset of patients who always want the latest greatest new toy but for the most part once an insulin pump patient becomes comfortable they stick with what they’ve got.
But it’s not just the hardware the patient develops a relationship with, the company that makes and supports this hardware also becomes part of the relationship. Insulin pump patients are not like other insulin using patients, they may pick up their insulin and testing supplies at their local pharmacy but their pump supplies and support comes directly from the company that makes the pump. It’s not unusual for these patients to develop personal relationships with the customer support staff at a pump company.
We’ve said it before and we’ll say it again running an insulin pump company is like running an airline or hospital, there are no days off. If a pump has a problem on Christmas Eve the patient cannot wait until after the holiday is over to get a replacement, they need it on Christmas Day. If something goes wrong at 2 am they cannot wait until morning to get help, they need help immediately. This is one reason when selecting a pump so much attention is paid to who stands behind that pump.
Way back in the day when MiniMed and Disetronic were battling for insulin pump patients it was well known that Disetronic had better technology but MiniMed had better customer service. Prior to being acquired by Medtronic (NYSE: MDT) it’s fair to say MiniMed set the standard for how insulin pump patients should be handled. Interestingly after being acquired Medtronic in an attempt to cut costs they foolish cut back on customer service a move they quickly reversed when they realized patients were leaving because of poor customer service.
It’s not an overstatement to say that Animas and Deltec who were both arriving on the scene became viable because of this blunder by Medtronic. MiniMed patients got feed up and showed their displeasure by switching to another system. Even those these companies were new to the insulin pump world customer service had gotten so bad at Medtronic patients decided it was worth the risk. Unfortunately for those who switched to the Cozmo from Deltec they got slapped in the face when Deltec had to cease operations.
Those who switched to Animas felt secure especially after the company was acquired by JNJ. Heck JNJ is a huge company with tons of resources no way they will ever close their doors. Well as we witnessed yesterday even a company like JNJ couldn’t survive so now Animas patients have a choice to make or do they.
With Animas closing what REAL choice do these patients have. Yes, they could choose the OmniPod from Insulet (NASDAQ: PODD) but this is a wireless system and while we see many benefits to the OmniPod when a patient is used to a tethered pump they typically want to stay with a tethered pump. This narrows the choice to Medtronic or Tandem (NASDAQ: TNDM). The problem is Tandem is on the verge of collapse and soon could join Animas in the insulin pump graveyard.
Listen insulin pump patients aren’t stupid and are aware of what’s going on. These patients do not want to make the jump to Tandem, learn the system and then be smacked in the mouth yet again. Many we suspect will just capitulate and move to Medtronic, especially since Tandem isn’t really offering any special deals for these patients. Sure, they can move to Tandem but at a cost, Insulet at least had the good sense to offer a FREE conversion.
For many in the insulin pump community reality is beginning to set, a very uncomfortable reality. As we have written many see Medtronic as the evil empire, as the enemy. Yet today this enemy now effectively controls nearly 90% of the insulin pump market. The fear many have is that with this stranglehold on the market Medtronic can do whatever they please without worry. They fear that since customer support is one the costliest aspects of running an insulin pump company, Medtronic will chase dollars at the expense of patients.
A belief which is based on Medtronic’s history for as we noted they have done this before. Although Medtronic is under new leadership and the people who made this foolish decision to cut back on customer service are long gone, patients like elephants never forget. It doesn’t help any that Medtronic has made several blunders with the launch of the 670G, i.e. the $299 refund which wasn’t really a refund. Or the fact they are in the midst of an infusion set recall. Or that they cannot supply sensors for the 670G.
Nor does it help much that social media is filled with stories of Medtronic patients being left on hold for extended periods of time. The fact is Animas patients feel violated and that JNJ let them down. This violation extends to the fact JNJ in essence is forcing them to go to the dark side. Listen we get why JNJ did what they did and think it is the right thing but we are looking at this from a business perspective. Animas patients could care less about that they only see how this decision impacts their lives.
A few items before we close and let everyone get on with their weekend. First and we want to stress this, Animas is not being shut down because of anything Medtronic did. Animas is being shut down because JNJ screwed up. We have seen many stories and posts that put this closure squarely on the shoulders of Medtronic. We get it but it’s just flat out wrong.
Next, it’s time for Tandem to man up and tell the truth. The last thing insulin pump patients need is to be abused yet again. This company is in serious financial trouble and the prospects of them surviving much longer aren’t good. It’s time for Tandem to come clean and tell patients the truth. These people have just had their lives turned upside and it’s imperative they have ALL the facts when making their decision.
To everyone at Medtronic you have an immense responsibility now, even greater than before. Keep one thing foremost in your mind as you move forward – you have won and vanquished the competition and yes to the victors go the spoils. But with this victory comes responsibility so be magnanimous do not gloat and remember above all this is about PATIENTS.
To our friends in the West Coast Mafia who we hope have learned a valuable lesson here. Use your voice to tell your followers the truth, tell them what is going on with Tandem so these people can make an informed choice.
And finally, to our many friends at Animas, thank you for trying. It’s not your fault that management screwed this up, on multiple occasions actually. You did your best and unfortunately your best was not good enough. We hope you land on your feet and find employment elsewhere.