Tight Glucose Control and Smiths Exits the Insulin pump business

Tight Glucose Control and Smiths Exits the Insulin pump business

According to a study published today online by The New England Journal of Medicine entitled “Intensive versus Conventional Glucose Control in Critically Ill Patients”; the authors concluded “In this large, international, randomized trial, we found that intensive glucose control increased mortality among adults in the ICU: a blood glucose target of 180 mg or less per deciliter resulted in lower mortality than did a target of 81 to 108 mg per deciliter.” This conclusion is in stark contrast to previous studies which indicated that intensive glucose control lowered mortality for ICU patients with the additional benefit of the patient being discharged from the ICU sooner.

In a corresponding editorial that also appeared in the online issue of the NEJM entitled “Glucose Control in the ICU- How Tight is Too Tight?” by Silvio E. Inzucchi, M.D., and Mark D. Siegel, M.D.; the authors note: “Clinicians, particularly those involved in critical care, are now left in something of a quandary. At many institutions, an infrastructure has emerged that facilitates the automatic and seamless use of insulin infusion in patients in the ICU. Should these efforts now be abandoned? Until further evidence becomes available, it would seem reasonable to continue attempts to optimize the management of blood glucose in our hospitalized patients, especially to avert the extremes of hyperglycemia (which have acute effects on renal function, hemodynamics, and immune defenses) and also hypoglycemia (with its own, often more immediate and serious consequences).”

While many will view the results of this study as a negative for companies like Dexcom (NASDAQ:DXCM) who recently partnered with Edwards LifeSciences (NYSE:EW) to develop a hospital based CGM unit. Diabetic Investor sees the results differently. First and foremost, with different studies reaching very different conclusions, it’s unlikely that hospitals who have implemented intensive glucose control will drop this protocol. Secondarily, no matter what hospitals decide to do in regards to the use of insulin there still is a need for an automated glucose monitoring system. With the shortage of ICU nurses and the time required to measure glucose levels with conventional glucose monitors, a CGM unit is a cost-effective productivity enhancing tool.

As the results of this most recent study are debated and more studies are conducted, Diabetic Investor believes the research community is missing the point. This debate over intensive control in the ICU unit reminds Diabetic Investor of the debate that occurred after the ACCORD released their results. The fact of the matter is whether it’s an ICU patient or just a person with diabetes, there is no one size fits all target glucose level. There are just too many factors involved and glucose levels are just one piece of a very complex puzzle. More than likely, what will happen is researchers will come up with a range of glucose target levels that take into account additional factors. Simply put a patient with known cardiovascular risk factors will fall into one range, while a patient with no additional risk factors will fall into another.

Regardless of where this goes there is no question there is a need for a hospital based CGM system. Looked at realistically there is no more cost effective method for collecting glucose data than CGM. This is particularly true in the ICU unit.

In other news today Smiths Medical announced they would be exiting the insulin pump business. This news should not come as surprise to Diabetic Investor readers as long ago we noted that Deltec was a dead duck. The unit which got off to such a great start was effectively crippled when they succumbed to Medtronic’s (NYSE:MDT) settlements terms to drop a patent infringement lawsuit. Since that day Smiths knew the unit would have issues as the settlement made the sale of the unit next to impossible.

Even though this announcement was widely anticipated it does set the table for an intriguing battle between the remaining players in the market.  Should present trends continue this is not good news for market leader Medtronic. Although the company holds a commanding presence in the insulin pump market their recent sales have fallen as they are losing share to Animas, a unit of Johnson and Johnson (NYSE:JNJ), and Insulet (NASDAQ:PODD) the makers of the OmniPod. As Diabetic Investor has previously reported when it comes to new pump placements, patients new to pump therapy, 7 of 10 new placements are going to Animas and Insulet. In the replacement or upgrade market, when an existing pump patient replaces or upgrades an existing system, a similar trend is emerging. As noted previously this is Medtronic Achilles heel as the replacement/upgrade market has been their bread and butter business.

Unlike Medtronic which has cut their sales force and placed even greater quotas on the remaining sales reps, Animas is increasing their sales force and has the additional benefit of leveraging the LifeScan, also a unit of JNJ, sales force. Now that Insulet has secured an additional $60 million in capital they too should be able to compete for the existing Deltec customer base.

This decision by Smiths should also send a clear message to the folks at Roche, who continue to believe they can sell an inferior product in a highly competitive market. The fact is the Deltec Cozmo insulin pump was not an inferior product and their demise has more to do with poor management decisions than product design. This is in stark contrast to Roche which has both an inferior product and poor management.

 The folks at Bayer should also pay attention here as they plan to introduce their own insulin pump later this year. While Diabetic Investor understands why Bayer wants to be in the pump market, we see it as a mistake to enter this highly competitive market with another me-too product. Bayer would be wiser to acquire Insulet before JNJ does.

In reality the future of the insulin pump market will come down to the ability to offer a range of systems. Just as the BGM market has evolved into systems for different patient types so too will the insulin pump market. The company that offers the broadest range of options, priced competitively with solid customer service will be the winner and it’s no longer a foregone conclusion that Medtronic will be that company. Medtronic is desperately trying to develop their patch pump to compete with the OmniPod. At the same time they are pursuing the development of a closed loop insulin delivery system which combines their Guardian CGM system with their Paradigm insulin pump. While the company maintains that both projects are on schedule Diabetic Investor has learned the patch pump is well behind schedule and even Medtronic’s own people consider the product inferior to the OmniPod.

The closed loop system is another story. For reasons Diabetic Investor just can’t understand everyone believes that a closed loop insulin delivery system will be a blockbuster product. Before we go any further it’s important to clarify just what a closed loop system is.  A fully closed loop system takes the patient out of the loop and all dosing decisions are made by the pump. A semi-closed loop system allows for patient intervention. In reality the semi-closed system is already here with the Paradigm line of insulin pumps from Medtronic. Set to join the semi-closed loop race is Animas who’s working with Dexcom and Insulet who is also working with Dexcom.

However a completely closed loop system is a vastly different story. While this sounds like a great idea no one has bothered to look at the real world implications. Once again everyone is fascinated with the technology rather than looking at the practical application of this technology. Diabetic Investor sees a host of issues with a closed loop system.

1.      Regulatory Path – Unlike a CGM or current insulin pumps – a closed loop system would have a very difficult path by the mere fact dosing decisions are made by a machine with no human intervention. This is like allowing your GPS system to drive your car on a crowded freeway during rush hour.

2.      Reliability – this goes both for the insulin pump and the CGM sensor – should either unit fail or malfunction, as has been known to happen, this could lead to disastrous consequences.

3.      Liability – the lawyers at Medtronic must be having nightmares given that it takes just one system failure to destroy a product line.

4.      Cost – Already insulin pumps cost upwards of $7,000 with an additional $2,000 per year in supply costs. Given the many components involved with a closed loop system Diabetic Investor can see a system costing north of $12,000 for first year patients and near $4,000 annually. It’s doubtful that insurers will be anxious to shell out nearly $10,000 for such a system.

5.      Acceptance – Contrary to what many assume, leading endocrinologists and diabetologiests, are not enamored with the prospect of having a machine control the fate of their patients. Just by way of example how would a closed system know that a patient is training for a marathon and there’s a legitimate reason to have their glucose levels higher than normal.

There is nothing wrong with semi-closed loop system which provides the patient with greater information so they can make BETTER dosing decisions. However, taking the patient out of the loop is a very bad idea no matter how wiz bang the technology is. Planes may be able to fly on auto pilot once airborne but it takes the steady hand of an experienced pilot to take off and land the plane.

As we indicated above it’s difficult if not impossible to design an algorithm that works 100% of the time in every patient. While it may not seem like it the study and editorial in today’s NEJM are very relevant to the development of a closed loop system and point to the dangers of trying to solve a complex problem with a target ranges. Put more simply, what applies generally does not always apply specifically.