Out of Control
Two-thirds of the nation’s 18 million Type 2 diabetics don’t have their blood sugar under control. That was the conclusion of a report released at the American Association of Clinical Endocrinologist (AACE) meeting. Making matters even worse the report also concluded that most patients were unaware they were doing so poorly.
The American Diabetes Association (ADA) defines good control as a patient with an A1C level of 7% or below. The AACE sees good control as 6.5% or below. Whichever definition you use one thing is clear without corrective action the majority of Type 2 patients will experience serious complications.
But the most troubling finding to come out of this report was the AACE found 84% of Type 2 patients believe they are doing a good job controlling their sugar levels, yet 61% said they didn’t know what an A1C test is.
For years Diabetic Investor has said that the blood glucose meter companies are missing a major market opportunity by failing to pursue the home A1C testing market. The general reason given for this is that they don’t believe the market is large enough to warrant a strong effort. The ADA recommends patients with Type 2 diabetes check their A1C levels twice each year while Type 1 patients should test four times each year. Based on the latest statistics there are 1.5 million diagnosed Type 1’s patients and 12 million diagnosed Type 2 patients. Using some back of the napkin math there’s a potential market of 30 million A1C tests per year. With another 41 million Americans having pre-diabetes the A1C market has vast potential.
Where Diabetic Investor sees real value in the A1C market is that it introduces patients to the concept of testing. Today the average patient with diabetes tests their sugar levels less than twice each day, if you would take insulin using patients out of the equation the average would fall even further. Insulin using patients account for only 29% of the diagnosed population yet represent almost 80% of testing volume. The fact of the matter is Type 2 patients don’t test because they fail to see a correlation between test results and treatment options. Although the A1C test is not done every day it begins the education process for the patient. While not all Type 2 patients will move from 2 A1C tests per year to four glucose tests per day, it’s inconceivable to see the patient testing their glucose levels once a day. The while point here is by taking this baby step approach with Type 2 patients blood glucose meter companies could do something that’s never been done before, actually expand the market.
In the US sales of glucose monitoring products reached $2.1 billion in 2004. Over the past few years the market has grown in the mid-single digit range and most industry observers estimate that the market will grow in the 6% or lower range over the foreseeable future. With slower growth and industry consolidation, competition for the insulin using patient has become fierce. As we pointed out yesterday this is one reason Roche is replacing the Advantage meter with the Aviva. The Aviva will compete directly with the OneTouch Ultra and FreeStyle meters which are popular with insulin using patients. While there is nothing wrong with going after the frequent tester it appears meter companies are content to ignore Type 2 patients. With market growth slowing and competition heating up we see this as a missed opportunity. It won’t happen overnight but any company willing to make an effort will reap great rewards.