New Technology Old Problem
As we look back on another JPM it strikes us that while much has changed much remains the same. There is no question one of the bigger stories to come out of this year’s conference was the increasing role technology will play in healthcare. As we anticipated companies that weren’t even officially here dominated the conference. Whether it was in the presentations, breakouts or hallways everyone was talking about how Amazon, Google and Apple are about to change healthcare.
Diabetes is an ideal example of the role technology will play in the future. Lilly (NYSE: LLY) is the most recent example of a drug company joining the race to develop the latest batch of way cool whiz bang cloud enabled toys. Sanofi (NYSE: SNY) is also venturing into this area partnering with Verily and by default Dexcom (NASDAQ: DXCM). Sources indicate that Novo Nordisk (NYSE: NVO) will soon be entering this race as well.
Critical to this effort and very good news for Dexcom, Abbott (NYSE: ABT) and Medtronic (NYSE: MDT) is that CGM is quickly becoming the standard for glucose measurement. BGM will exist and won’t go away tomorrow but the market will continue to shrink. Although many still cannot yet grasp that CGM will expand beyond just insulin using patients and be a tool used by all patients, there are signs some are starting to see the light.
Yes, it won’t be long before everyone has a Tyler and some roles will change. While Lilly may not think that Amdelog from Sanofi won’t be a big deal the arrival of biosimilar short-acting insulin will change the competitive dynamic. Lilly and Novo will soon face a new competitor in Medtronic which is one reason Lilly is entering the insulin pump market and both will develop their versions of a Tyler. We also suspect that Novo will join Lilly and begin working with Dexcom. And let’s not forget that Dexcom and Insulet (NASDAQ: PODD) also work together.
The question is will Abbott push to do deals with these companies too to sell more Libre’s. The company is partnered with Bigfoot who will have a Tyler and a pump but with this move towards open platforms this one partnership may not be enough. While we see some issues with this push towards open platforms there are also some benefits.
Although we are not there just yet we are getting ever closer to companies selling comprehensive diabetes management systems. Systems which include everything the patient needs- drugs – devices – apps and of course coaching. CGM will become the cornerstone, the most critical component of these systems even those used by non-insulin using patients. It bears repeating that this huge patient population WILL use CGM they will just use it differently than an insulin using patient.
Yet one huge problem remains unsolved, the patient. We hate to be redundant but even with all this great technology combined with data analytics and algorithms no one so far anyway has figured out how to motivate patients. All of them can provide the how to manage diabetes but no one so far has mastered how to get the patient to want to manage their diabetes. A problem that is easier to solve with insulin using patients than non-insulin patients.
Now here is where many will say Google, Apple and Amazon all of whom making deep dive into diabetes will solve this problem. We certainly hope so but the more we learn about what these companies are doing the less we think the get it. Technology alone will not solve the problem, no question it can help but by itself no.
To us it’s a matter of perspective as we do not view this as a math problem, a device problem or a drug problem. Right now, with no advancements in data analytics, no improvements in devices and no better drugs we have all the tools necessary so a patient can manage their diabetes. The problem as we see it is a PEOPLE problem, getting patients to want to use these tools. Unless more attention is paid to providing patients with motivation to use these tools nothing will change.
Many times, we have outlined how this can be done but our fear is all this technology will be wasted. That even with all this great technology this will become a race to the bottom, it will be about price and not about value. That to gain share companies will do what they always do, use price as their primary weapon. Yes, we know that some price contraction is inevitable. However, should it become an all-out price war no one wins.
The reality here is that technology can be a major positive provided the patient is motivated to use it. This is not just about transforming data into patient relevant, patient actionable information. The third leg of this stool is getting the patient motivated to do the heavy lifting and keep doing it. People call this patient engagement, we call it enlightenment. Patients will not become engaged until they are enlightened as to how doing all this work benefits them directly.
The fact is patients will not change anything unless there is something in it for them and achieving better outcomes isn’t it. In our view patients are motivated when they save time or save money. They want the shortest distance between two points combined with the least amount of work. They want to be rewarded, they respond to constant positive reinforcement. Simply put they are humans and not robots and humans cannot be programmed.
So yes, technology can help but by itself it will do nothing if patients don’t use it.
