What would Momma Kliff do?
A few years back lots of people were wearing these WWJD bracelets. Now being a nice Jewish boy, we had no idea that WWJD stood for What Would Jesus Do. Yet with Mother’s Day being this Sunday our thoughts of course turn to Momma Kliff and we began to wonder What Would Momma Kliff do if she was part of our wacky world, which we guess she is by default given what her son does for living. Yet we digress.
It is very gratifying that over the years Momma Kliff has gained somewhat of a fan club. Mom now has legions of fans who ask at times when wackiness rears its ugly head, what would Momma Kliff do. To wit we often say she would shack her head and say; “What kind of mishegas is this?” For those who are still learning Yiddish mishegas is the equivalent of craziness.
Although Mom did not have diabetes she did have to raise four rambunctious boys which like managing diabetes is not an easy task. This was an especially tough task as Mom raised four independent free-thinking boys who were encouraged to speak their minds. As Mom used to say; “There ain’t no wallflowers in this family so state what you believe and be prepared to stand by what you believe.” It goes without saying that her youngest boy, her favorite, follows this advice each and every day.
Unlike many in this wacky world Mom did not over think how to make a simple peanut butter and jelly sandwich. She believed that the short distance between two points was a straight line. As Mom used to say; “Why overcomplicate a simple task.”
Not being around to see the proliferation of whiz bang way cool toys and equally way cool whiz bang apps we often wonder what Mom would think about all this fancy technology. Our guess is she would say something like “Gee that’s nice but exactly what problem are all these toys solving.” See Mom was not one to lament over something like diabetes management. She may not have liked having to manage diabetes, but she would have not avoided it either.
Mom taught her boys is that life isn’t easy and sometimes situations are thrown at you which you don’t want but must deal with.
Another great thing about Mom as unlike so many in this wacky world her feet were firmly planted in the real world. She had a keen understanding of human nature, how things really work and why they work the way they do. Listen when your busy raising four boys there’s little time to think about what might be, what could be. As Mom often said; “I don’t have time to solve the world’s problems that’s your fathers job. Me I’ve got a family to take care of.”
Lately we’ve thought about Mom a lot as we watch the apps arms race. Yes, that poor dead cat can’t be swung today without hitting a tech company, most likely one with a wearable device, that now sees diabetes management as a path to riches. FitBit being the most recent example here as now that FitBit has awakened to the fact that their device isn’t needed anymore is desperately trying to reposition their toy as a diabetes management tool.
We haven’t done this in a long time but years ago before the advent of CGM patients could choose form over 40 different conventional glucose monitors. Today there are just three FDA approved and commercially available CGM’s. Yet given the way things are going it won’t be long before that number doubles or triples. And our guess is all these CGM’s will of course communicate with a way cool whiz bang app which in turn will analyze all this data and of course then send messages to the patient telling them how they can improve their diabetes management.
As we have stated for some time CGM is following the same path as BGM just at a faster pace. Given that Abbott (NYSE: ABT) is now behind the eight ball since the launch of the new G6 from Dexcom (NASDAQ: DXCM) Abbott will do what they have been doing until they can update the Libre, fight using price. A move which will could prompt Medtronic (NYSE: MDT) who is getting set to enter the stand-alone CGM market with an inferior product to completely leave the reservation and give away their system for free.
Now this may sound crazy but when given some thought this isn’t as crazy as it seems. Like Abbott, Medtronic sells other things and not just diabetes devices. The company has a boatload of cash which basically means they can afford to give this product away. Now the product is not inferior because it does not work, it’s inferior when laid side by side against either the G6 or Libre. Yes, the damn thing works it’s just not as patient friendly as the G6 or Libre. As we have stated before Dexcom and Abbott are selling smartphones while Medtronic is selling a flip-phone.
Listen Medtronic has spent millions to develop this product, they have tooled up and the train is getting ready to leave the station. Sure, they could pull an Animas and shutdown the product and get nothing or they could pull a classic Momma Kliff. For when your outgunned by your opponents you need to outfox them and what’s the short distance between two points how do you get the product into the hands of patients you give it away for free.
Such a bold move accomplishes several objectives;
1. It places Dexcom and Abbott in a defensive position.
2. It instantly builds a customer base.
3. It introduces Medtronic to a new group of patients who could become insulin pump patients.
4. It improves the company’s image – how can a company be the evil empire if they are giving away such a valuable and useful tool as a CGM for free.
Frankly Medtronic has everything to gain here and nothing to lose. Payors may not like the strategy but given that Medtronic already owns the formulary real estate when it comes to insulin pumps we doubt payors will hold this against the company. But even if payors are upset let’s get real here the CGM patient population while growing is not yet material to their bottom lines.
Let’s have a little fun here and say that Medtronic follows through and does start giving this thing away for free. There actually is an upside for Dexcom and Abbott as surly such a move would create buzz particularly in the active diabetes social media community. Dexcom and Abbott in turn could point out while yes, a patient can get the Medtronic device for free here is the differences between what they have and what Medtronic has. Additionally, they would note that while not free their product is reimbursed, and they would be happy to help the patient with the reimbursement process.
Now will Medtronic make such bold move our guess is probably not. Cost is one factor as there is no guarantee these patients will excuse the expression stick with the device. The street is another factor as the company does have numbers to hit and while this would not necessarily adversely impact results such a move could be viewed as a negative. Almost as an admission that they spent all this time, effort and money and when it came time to produce they couldn’t.
Still we do think this is what Momma Kliff would do and that tells us it would be the right move.