We have always had a great deal of respect for our friends at BD. Their business may not be fun, exciting or sexy, but it sure makes a boatload of money. Just as Medtronic owns the insulin pump market BD owns the syringe and insulin pen needle markets. Yes, like Medtronic they have some competition but also like Medtronic their competition pales in size and resources. Simply put when it comes to things that stick diabetics 9 times out 10 it’s made by BD.
Which makes us wonder why the folks at BD want to complicate their lives by getting into the insulin pump business. Check out the slides from today’s earnings announcement and there it is a Type 2 patch pump scheduled for launch in fiscal 2019. Now in the interest full disclosure we have consulted for BD in the past and have seen this system. We had thought that after examining the market they used common sense and decided not to move forward. Guess not.
So, it looks like BD will join Lilly, OnDuo, CellNovo, Ypsomed and Bigfoot (and our apologies to the folks at Bigfoot as we keep forgetting to mention you when we serve up our list of insulin pump wannabes, sorry about that) in the race to have their heads bashed in by Medtronic, Tandem and Insulet.
Listen even if the FDA comes down hard on Medtronic, it will be Tandem and Insulet who will benefit. Medtronic while wounded will do what they always do when the goose that lays the golden eggs is in danger. Management will get thrown under the bus, a new team will come in clean up the mess and the goose continues to lay the golden eggs. We have seen this movie many times and it always ends the same way. (Although we would recommend seeing the remake of the Star is Born as Lady Gaga is an unbelievable talent.)
Now we thought BD had learned their lesson about straying from their core competency. Way back in the day they attempted to enter the BGM market. Momma Kliff told them this would be a disaster and it was. But for some reason they once again feel the need to stray. Why is anyone’s guess.
Yet BD is not the only company which feels the need to stray. Lilly is doing the exact same thing with their way cool whiz bang insulin pump as is Sanofi who also has a patch pump targeted at Type 2 patients. What none of these companies seem to realize is that building the damn toy is the easy part, any idiot can build an insulin pump, and many have.
So, for grins and giggles lets fast forward and assume all these companies who have no business being in the insulin pump market get their toys approved by the FDA and enter the market. Besides competing with Medtronic who has a monopoly they must also compete with Tandem and Insulet. They must get their toy onto formulary real estate that happens to be the domain of Medtronic.
Since this market has nothing to do with technology and everything to do with money that means in order to get on formulary, they must be cheaper than everyone else. Which means two things, no matter what price they offer payors the existing players will match or beat the price and they have an ice cubes chance in hell of making any money. Keep in mind they still would have to sell and support their toys, neither of which is cheap.
We seriously believe the motto of all these insulin pump wannabes is let’s spend millions for the right to lose millions more. While we hate being redundant Asante, Deltec and Animas – and Animas was part of well-resourced JNJ failed to make a dent in Medtronic’s armor. Think about that just for a moment, yes, we know JNJ seriously screwed up what could have been a great thing with Animas but still JNJ did have boatloads of money and still ended up surrendering.
The fact is, yes, those pesky facts again, NONE OF THESE INSULIN PUMP WANNABES SHOULD BE STRAYING FROM WHAT THEY DO BEST. BD should excuse the expression stick with syringes and pen needles, Lilly should remain a diabetes drug company and Sanofi should drink some excellent chardonnay. They have NO CHANCE at making money here and an outstanding chance at losing millions. Now we may not be the sharpest tool in the shed, but we don’t think the stakeholders of these companies want them throwing valuable capital down the toilet.
Listen we have a great idea if these companies are seriously intent on throwing money away, why not donate to a worthy cause. And we have just the cause as in a little over a week thousands of women will be participating in the Susan Komen 3 Day walk to raise money for breast cancer. We even have a team they can donate to, go to http://www.the3day.org/site/TR/2018/SanDiegoEvent2018?pg=team&fr_id=2015&team_id=260268 pick a team member and get this team to their fundraising goal.
At least this money won’t be wasted.