Lull before the storm

Lull before the storm

Friday at the annual wacky dance is the lull before the storm. With the exhibit hall opening tomorrow today is the day when the teams arrive, booths are set up and the team gets their marching orders. It will be interesting, as it always is, to see the various uniforms worn by the different companies. If the past is any guide the folks at Becton Dickinson (NYSE: BDX) will have the most colorful shirts. Yet we wonder given the current state of diabetes just what these rent-a-reps, booth bunnies or whatever they are called these days will say to attendees.

We mention this because of the simple fact most physicians are no longer practicing medicine. Increasingly physicians are being told which drugs and devices their patients MUST use. Increasingly the choice of which insulin pump or medication is used is not made by the physician. In today’s world, the real world outside of the exhibit hall, it is the patient’s insurance company that dictates which drugs and devices are prescribed by the physician. Sure, physicians can recommend something that isn’t on formulary or is not on the primary formulary list but this means, what else, the patient must pay more out of pocket.

Listen there will be lots of pontificating here in San Diego, which is truly one beautiful city with perhaps the best weather in the US. Yes, expect lots of talk about whiz bang way cool cloud enabled toys. More talk about whether the results seen with EMPA-REG will be replicated by Invokana therefore making the cardiovascular benefits of SGLT2 a class effect and therefore making this another commoditized drug category. Already we have seen stories about interconnected diabetes management positively impacts patient outcomes, even though only a mere handful of patients use this way cool whiz bang cloud enabled technology.

Yet in the real world and the ADA wacky dance isn’t the real world, money talks and bullshit walks. In the real-world patients have high deductible insurance plans and therefore cannot afford all these way cool whiz bang toys. In the real-world patients, far too often must decide whether to pay their mortgage or refill their prescription. In the real world $299 does matter to the patient even if they might get this $299 back.

Given this set of facts and yes, we know that people hate pesky facts there is a reason companies are no longer setting up massive booths or spending large sums of money to fly in, house and feed their field sales forces. There is a reason rent-a-reps and booth bunnies have taken over, at a much lower cost, this function which used to be performed by the field sales people. This is also the reason it’s not a question of it but when companies eliminate field sales forces completely. This will not apply to every company but it will apply to many.

But this reduction and eventually elimination of large sales forces is not the only impact of how the real world operates endocrinologists and CDE’s also face a bleak future. Not because they aren’t talented, the exact opposite is true these people are ultra-talented. No, it’s the same reason companies have reduced field sales forces, money. Now we know that endo’s and CDE’s are going to hate this but the functions they now perform are being replaced by technology. Technology which does not need time off or want a raise or complains about the latest comp plan.

A big story here, and honestly it shouldn’t be a big story, is all the way cool whiz bang insulin dosing algorithms. Algorithms which help Type 1 and insulin using Type 2’s dose their insulin more effectively.

What should be a big story here is something like the Intarcia micro-pump which once implanted solves the biggest problem in diabetes, medication adherence.

With CGM getting better and CHEAPER, with smart insulin pens, smart pumps and smartphones just what role will be played by the endo and CDE. Why would a patient, those real-world patients who have high deductible insurance plans pay to see an endo or CDE? Even if the office visit is reimbursed there is still that pesky co-payment, which just so happens is also increasing. Not to mention these patients must take time off work, the job that generates their income to see the endo.

Same goes for CDE’s, the most dedicated and wonderful people we know, people who truly care about patients. Even if a sit down is reimbursed, a rarity by the way, the patient still must schlep to the CDE or the CDE must schlep top them.

We want to be very clear here we love endo’s and CDE’s but we also must acknowledge that diabetes is a business. That as we state consistently this isn’t about patient outcomes this is about money. To be even clearer the money issue does not only apply to the companies in this wacky world, or the physicians that treat them or the CDE’s that educate them. Money also matters to the patient. Patients, the majority anyway, who do not see a benefit from spending extra money, money that many do not have to spend, on better drugs, devices, endo visits or CDE consultations.

This my friends is what goes on in the real world, the world outside of this annual wacky dance.