More useless technology
Considering how diabetes device companies are fascinated with whiz bang technology rather than dealing with worsening market dynamics or making their devices more patient friendly so that patients actually use their devices more effectively, the latest news from Medtronic (NYSE:MDT) is hardly surprising. According to story in the Minneapolis Star Tribune; “Medtronic and Ford have teamed up on a prototype device that helps drivers track blood sugar levels while on the go.”
The story goes onto state; “Using Bluetooth connectivity, the system links the automaker’s popular in-car infotainment system, called Sync, to a Medtronic continuous glucose monitor. If a driver’s glucose levels are too low, an alert sounds or a signal appears on a dashboard screen.
The Ford-Medtronic prototype is still being researched, so it’s unclear when — and if — the technology will ever be marketed. “Today it’s all about possibilities,” said Medtronic senior vice president James Dallas, who attended an unveiling at Ford headquarters in Dearborn, Mich., on Wednesday. “There’s nothing formal yet, but the technology has reached a point where possibilities can become probabilities.”
Now Diabetic Investor doesn’t want to make light of this latest “technological advancement” but given the way things have been going at Medtronic one has to wonder why they are spending money on a device that applies to a mere handful of patients. This is after all the same company who can’t seem to figure out how to make a patch pump that actually works or find a replacement for their aging Paradigm line of insulin pumps.
Perhaps Diabetic Investor is completely wacky, but this project reminds us of the company’s other dream product a closed loop insulin delivery system. Another very expensive project which will carry a huge price tag for the patient and based on their track record isn’t any closer to becoming a reality than their much hyped and much delayed patch pump. Perhaps Medtronic should learn something from the problems their having with their VEO system which is not currently available in the US. While available overseas the company has noted the FDA wants the company to conduct more detailed studies of the VEO as the system has been associated with at least two deaths.
Someone needs to explain to Diabetic Investor how a company which has just gone through a major restructuring, which resulted in hundreds of jobs being eliminated many in the R&D department, is finding the money to pay for this project which won’t sell one more pump. It’s a well-known fact that when it comes to new pump placements, patients who are new to pump therapy, Medtronic is struggling mightily. While they continue to hold onto the majority of their huge installed user base, Animas and Insulet (NASDAQ:PODD) are winning the battle for new patients.
Diabetic Investor has said consistently that nothing much will change in the insulin pump market until someone, anyone figures out a way to convert existing Medtronic patients to a competing system. Perhaps this is why Medtronic feels so comfortable wasting money on these whiz bang technological advancements that may never make it to the market and even if they do they won’t help sell one more pump.
The fact is all the companies in the market and those set to enter the market realize that if they are ever going to take share away from Medtronic it will take more than better technology. As it stands today one could argue that the systems offered by Animas and Insulet offer superior technology to the Paradigm line of pumps. However, neither company has had much luck converting Medtronic patients to their systems. The reality here is that someone will need to spend millions to steal share away from Medtronic and the insulin pump business is already very costly.
Diabetic Investor suspects someone will eventually take the plunge and start offering pumps for free and try to make money through the continual sale of pump supplies. Not that this strategy hasn’t been tried before and we all know how well that worked out for the glucose monitoring market.
An alternative would be to switch to lease rather than buy pricing model. Here a patient, or their insurer, would pay an annual fee that would cover everything the patient needs, the pump and supplies. The patient would automatically be shipped a new pump when one becomes available. This is not unlike what car companies have done as the pricing of cars became costly and consumers decided it was better to pay smaller monthly payments on a system which loses value the minute you drive it off the lot. Car companies made leases even more attractive as they allowed consumers to opt out of a lease on their old car as long as they opted in to their brand with a new lease, and thus monthly payments continued as the consumer didn’t switch to a competing brand when they needed a new car.
The problem with the lease versus buy pricing model in the insulin pump market is the high cost of running an insulin pump company. Since there are not millions of pump users as there are car owners, pump companies cannot spread their high costs over a large installed base. Some pump newcomers are trying to lower the high cost customer service using the internet for patient training and support or by outsourcing customer service. While this sounds good in theory and may eventually work, the majority of pump patients prefer dealing with real living humans.
The fact is, in spite of what some pump companies might think, their patients aren’t stupid and these patients realize that their pump is a device and devices malfunction. Given that this device is keeping them alive, they don’t want to have to log onto a web site or wait on hold when their pump malfunctions. There is a reason why so many pumpers carry syringes and insulin with them understanding that pumps malfunction and they cannot simply go without insulin until a new one arrives.
Perhaps this is something Medtronic can build into their new system the ability for the patient to order a replacement pump while they driving to the emergency room because their pump has malfunctioned. Yep that’s exactly what a diabetes driver who happens to be a pump patient needs another distraction that takes their eyes off the road. It’s bad enough there are hundreds of accidents caused by drivers paying more attention to their cellphones rather than the road; let’s create even more distractions with this worthless technology. Only in the wacky world of diabetes devices would any company pursue this type of technology and proves beyond a shadow of a doubt that there is no cure for stupid.