All Take No Give

All Take No Give

It seems our friends in Northridge are not just content to own almost 80% of the insulin pump market. They aren’t comfortable even when Tandem (NASDAQ: TNDM) is running out of money and will soon be out of business. Nor does it seem to matter that Animas, their other competitor is a three-ring circus with no ringmaster to control the show. One might think they’d be pleased that Insulet (NASDAQ: PODD), a company that does not have the financial resources to compete or a sensor-augmented system, is becoming their main competitor. Life really should be blissful at Medtronic (NYSE: MDT).

Yet take a look at the following from the Medtronic Diabetes website:

“Can you tell me more about the System Access activities that I have to complete to take $299 off the cost of the MiniMed 670G system? 

Because we’re a regulated industry, there are strict rules about the discounts we can offer. That’s why we offer System Access, so you can leverage your experience to provide Medtronic with valuable services that we can then compensate you for.

Completion of these activities within 120 days of your shipment date is required to get the refund:

  • Patient story: This will be used to help other patients understand and relate to the experience of going on the world’s first hybrid closed loop system. It can be video (2-4 minutes) or written (about 500 words).
  • You will be sent a link via email to upload your story to Qualtrics, the survey company we work with. Qualtrics communicates automatically with your account to confirm that you have completed each requirement. The invitation email will include suggested topics.
  • Surveys: Responses are completely anonymous and aggregated. The first survey takes about 20 minutes and the other two about 30-40 minutes each.
  • Like the story, you will be sent links to each of the surveys. Once you complete them, your account will be automatically credited.
  • CareLink uploads: We ask customers to upload twice per month. We are not tracking this component and rely on the honor system. Customer accounts are credited with the $99 upfront.”

So let me get this straight… Patients receive this $299 “DISCOUNT” after they are first  CHARGED $299 and then REFUNDED the money as they complete the above-mentioned tasks. Now we don’t want to say that Medtronic is trying to squeeze every damn dollar they can out of the patient for this new way-cool whiz bang toy which isn’t even a real closed loop system. We wouldn’t dare to imply that the good folk who came up with this program knew full well that most patients won’t fulfil their commitment and gee, Medtronic pockets the money as they are getting the money UPFRONT.

Listen, when the company did an exclusive deal with UnitedHealthCare, we thought, “What the heck took them so long?” We did not see this as an impediment to patient choice, nor did we believe it would stifle innovation; the two most commonly mentioned complaints. The truth is this was about money. Let’s be honest, Tandem and Animas COULD HAVE matched or beaten the price Medtronic was offering, but they didn’t. Medtronic did nothing wrong here, they merely leveraged their market position.

As we noted back when this deal was announced, it’s not like a patient would suffer from being on a Medtronic insulin pump, and if they really wanted another system there were ways to do it. It was also important to note that this deal only applied to insulin pump patients covered by a UnitedHealthCare plan, so this did not impact every insulin pump patient.

However, there is no justification for this $299 CHARGE, and it is nothing more than an attempt for Medtronic to fatten their bottom line. There is no way to sugar coat this: THEY ARE SCREWING THE PATIENT. Why are they screwing them? We have no idea. These guys own the insulin pump market and will only get bigger when Tandem folds and as Animas continues to flounder. They really don’t have any serious competition and yet they seem insistent on screwing the patient with this CHARGE. THIS IS NOT A $299 DISCOUNT. $299 IS NOT TAKEN OFF THE PRICE OF THE 670G.

The PATIENT IS BEING CHARGED $299 AND MUST COMPLETE SEVERAL TASKS BEFORE ANYTHING IS “REFUNDED.” The company’s own emails tell patients that payment plans do not apply to this $299 CHARGE.  What – do they like need money to help offset the marketing for the 670G? Because if you look at the task list, the first task is for patient’s stories, which we’re sure the company will be able to use in their marketing. We haven’t seen the legalise which is attached to this money grab, but we’ll bet the ranch that the company retains the rights to use and share patient stories.

What’s even worse here is based on the posts we have read on Facebook, patients are falling for this scam and it isn’t until they discover that they must pay $299 UPFRONT that it dawns on them that this is NOT a discount. Talk about deceptive marketing.

The email being sent to patients states:

“Your credit card will be refunded the following amounts when you complete each activity:
$99: CareLink™ Data Upload; $50: Survey 1; $25: Survey 2; $50: Survey 3; $75: Testimonial. Total Refund of $299.
You will receive a series of emails inviting you to complete each of the surveys and instructions for submitting your testimonial.
Completion of these activities within 120 days of your shipment date is required to get the refund.”

We have a copy of the email being sent to patients and will be delighted to share it so you can judge for yourself what this is and is not. THIS IS NOT A DISCOUNT BY ANY MEANS – NOT EVEN CLOSE. PATIENTS ARE PAYING $299 OF THEIR OWN MONEY AND MAY OR MAY NOT GET SOME THAT $299 BACK.

Frankly, there is no excuse for what clearly is nothing more than a way for Medtronic to make even more money. What astonishes us is why they feel the need to do this, since it’s not like they aren’t making enough money already. There is no need to do this. This is just out and out greed, and the patient once again is getting screwed royally.

When we reached out to the company to comment on this and explain how this is a discount and not just an attempt to get more money from patients, here is what we were told… That per the lawyers, the company could not GIVE patients $299 – “In order to ‘give’ a $299 refund, we need to receive something of equal value.”  It seems the company is slightly confused here as they are NOT giving anything they are merely refunding the patient’s own money. The one thing they are doing is TAKING – they are taking the patients’ money, they are taking the patients’ stories, and they are taking the patients’ opinions. Knowing how their lawyers operate, the folks who approved this, Medtronic will own the rights to what they have taken.

Just in case anyone doesn’t believe that patients are being duped by this supposed discount, we suggest you check Facebook or other patient blogs.

What keeps running through our mind is why? Why would Medtronic do this? But as many have noted, when you have a virtual monopoly and your remaining competitors are either going out of business or going nowhere, you can get away with screwing the patient. Are you trying to tell us that they could not find another way to incentivize or compensate the patient? Was charging their credit/debit cards $299 the only way to do this? Seriously this is so wrong on so many levels.

Frankly, Diabetic Investor is so incensed by Medtronic’s lack of sensitivity that will we do something we rarely do – we are giving you permission to share this post with anyone. Go ahead and violate the Diabetic Investor copyright, I am giving you permission to do so.