What are these people smoking?

What are these people smoking?

It just amazes Diabetic Investor how many myths continue to perpetuate in the diabetes world.  The quest for a non-invasive glucose monitor is one as it is based on the myth that the reason patients do not test their glucose levels is the “pain” associated with performing the test. The quest for inhaled insulin is another as it too is based on the myth that the reason more patients don’t use insulin is they are somehow afraid of the needle. The quest for interconnected diabetes management systems is another as it based on the myth that technology alone will improve patient outcomes.

Perhaps the biggest myth of all is that the domestic glucose monitoring market will make a comeback and international markets will grow at double digit rates for the foreseeable future. Today comes another report that perpetuates this myth this one from the folks at Global Industry Analysts, Inc., who published a report on the glucose monitoring market. According to a press release from the company which announced the report; “The global market for Blood Glucose Meters and Strips is projected to reach US$21.5 billion by the year 2017, propelled by the rising worldwide incidence of diabetes, particularly Type 2 diabetes, and development of innovative drugs and surgical procedures addressed towards unmet needs. Other significant driving factors include growing healthcare spending, prospects for novel insulin delivery systems and better diabetes management. Also heralding new market opportunities are the minimally invasive and non-invasive glucose monitors, presently in the R&D stage.”

Now in fairness Diabetic Investor should disclose we have not read the report but given this statement there is no need too as its evident the folks at GIA have lost touch with what’s going on in the real world. While there are several points we could take issue with one in particular stands out the assertion that just because diabetes is growing at epidemic rates which will create an even larger market, a market which will be dominated by patients with Type 2 diabetes, that more test strips will be sold.

At first glance it would seem to make sense that when you have a growing patient population as you have with diabetes that the market will grow just because of this fact. That is until you consider the fact that patients with Type 2 diabetes, particularly those who don’t use insulin (the vast majority) rarely, if ever, test their glucose levels on a regular basis. Something that has nothing to do with the so-called “pain factor” but in reality has more to do with the fact that these patients don’t understand what the test result means and there is action step taken after the test is performed.

As we have noted far too often numerous studies have been published that conclude that even when these patients do test we do not see improved outcomes. While Diabetic Investor believes these studies have flaws they do exist and are one of the reasons we believe it won’t be long before insurers stop reimbursing for testing supplies for their non-insulin using patients.

The fact is in the real world for testing to have any value for non-insulin using patients it must be done on a regular basis. This is the structural flaw with how patients are trained or should we say told to test as the emphasis in current training is on a single test result rather than a series of test results. Unlike insulin users who need this information so they can properly dose their insulin, non-insulin using patients do not take an action step after they measure their glucose. The real value for a non-insulin using patient comes from a series of test results, as looked at over time a patient can discover whether or not their therapy regimen is working. Many patients falsely believe that an HbA1c test tells the whole story, while there is some validity in this belief, HbA1c results do not tell the whole story.

While Diabetic Investor does not believe it’s possible for non-insulin patients to learn about glycemic variability, we do believe that if they were trained to look at series of test results rather than a single point in time, they would manage their diabetes more effectively. For non-insulin using patients glucose readings are like pieces of a complex puzzle, a puzzle which is incomplete when you only look at one piece of the puzzle. By putting together several pieces of the puzzle a clearer picture begins to emerge; a picture that is not told by an HbA1c reading alone. Simply put while the action step for an insulin patient is immediate, the action step for a non-insulin using patient takes place over time.

Diabetic Investor also takes issue with the contention that new drugs will somehow lead to increased testing and actually believes the exact opposite will occur. The fastest growing segment in the diabetes drug world is the GLP-1 market, drugs which are very effective and do not require the patient to monitor their glucose. Diabetic Investor believes that as we see greater usage of GLP-1’s we will also see more damage done to the glucose monitoring market as these patients will likely give up testing altogether and rely solely on HbA1c results to measure outcomes. (Just so we’re clear Diabetic Investor does believe these patients SHOULD test for the same reasons given above, however this does not mean they will test.)

We also take issue with the belief that somehow international markets, emerging markets especially, will somehow save the day. Yes these markets are growing faster than the US market but only because they are starting from a much lower base. While the growth rates so far have been impressive it would be a serious mistake to believe these growth rates will continue into the future. As it stands today the growth is coming from the lower hanging fruit on the international tree, this is particularly true in emerging markets.

In fact Diabetic Investor would argue that when you look at established markets such as Germany, France or Europe in general we’re seeing conditions similar to what we’re seeing here in the US- slower growth, tougher reimbursement policies and the negative impact from increasing GLP-1 usage.

Markets like India and China, two very large markets, are experiencing above average rates of growth that will soon show signs of stagnation. While diabetes is exploding in these markets like it is everywhere else, these countries lack the necessary infrastructure to sustain above average growth rates and have healthcare systems that are dramatically different than developed nations. There are also serious questions regarding intellectual property protection, a serious issue for glucose monitoring companies.

Think of it this way, here in the US with a Walgreens, CVS or Wal Mart on almost every corner it’s pretty easy for as patient to get their supplies; supplies which are widely reimbursed by their health insurance provider. This is not the case in either India or China where supplies are purchased at hospital or clinics, supplies which are not widely reimbursed. While we follow the 80/20 or more 85/15 model here in the US (85% of patients have insurance 15% cash paying) the model in markets like India and China is the exact opposite. Plus you don’t see a Walgreens on every street corner or have an established mail order supply chain.

China and India are similar in another respect as growth comes mostly from their larger more develop cities but does not take into account the large areas of their countries, with vast populations where there is no developed infrastructure. Patients in these areas, even if they know they have diabetes, have no easy way to get their supplies assuming they can even afford them. Yes this will change over time but this change will not take place quickly, we’re talking years, several years and not months before this change takes place.

Diabetic Investor does not dispute that the market for BGM will grow rather we question the rate of growth and the fundamental issues surrounding the market. Issues which go well beyond the shores of the United States and will adversely impact the globe BGM market. The bottom line here is that BGM is about to undergo yet another transformation as BGM companies attempt to deal with these issues. Unfortunately an issue they won’t have to deal with is growing too fast; those days are gone and unlikely ever to return.