When a meter is actually a useful tool
Recently Diabetic Investor had the opportunity to sit down with two privately held companies each with an interesting take on what a glucose monitor can do when you think outside the box. Unlike traditional monitors which do little more than deliver a glucose test result; these systems have the potential to be actual tools that a patient would use to more effectively manage their diabetes.
The first system comes from Hygieia, www.hygieiamedical.com and comes with the fancy acronym DIGS™ which stands for Digital Insulin Guidance System. According to the folks at Hygieia using sophisticated algorithms they can help insulin using patients more effectively manage their diabetes by adjusting their insulin doses based on their glucose levels alone. They further claim that a patient does not need to monitor their glucose levels on a regular basis and dosing adjustments can be made with just one reading per day.
Although this system is not like bolus calculators found on most insulin pumps, the concept is similar. Perhaps the best way to describe DIGS is a bolus calculator for dummies. Rather than ask the patient to enter a range of information such as insulin to carb ratio, duration of insulin action, etc. The algorithm in DIGS does all the heavy lifting and basically dumbs down the process so all that the patient needs to do is enter their glucose levels.
The problem with Hygieia isn’t the system rather how the company plans on making any money. Initially the company stated they would follow the standard razor/razor blade business model making money from the continual sales of test strips. Yet when Diabetic Investor pointed out the dismal prospects for the BGM market, the company changed their tune and noted they could be used as tool to sell more insulin. While that may be true, and we’re not sure if it is, perhaps their biggest problem other than not knowing how they will make any money is their cost of goods.
Given the current market conditions where glucose monitors are given away for free, the company is completely reliant on the sales of test strips. Worse still the company has outsourced the manufacture of their test strip to iSense. While this move is understandable it places and even greater burden on the company as they must give away a portion of their margin to iSense.
Diabetic Investor does see some value in helping insulin using patients make more effective dosing decisions and there is some additional value in dumbing down this process, the company would be more innovative if they changed where their algorithm was located. Rather than put yet glucose monitor on the market and go through the expensive process of supplying patients with these systems why not develop an app that can be stored on the patient’s cell phone or computer. Since the algorithm does not require lots of user information this tool would be more accessible as an app. The patient could simply manually enter their glucose reading and the app does the rest.
As much as this idea makes sense it still does not solve Hygieia’s fundamental problem, how will the company make any money. While its possible patients would pay for this app, there is no compelling reason for them to do so. There are already hundreds of diabetes apps available, the majority of which are free and many although a little more complicated than DIGS do basically the same thing. Frankly the company would be better off selling their IP to an established company who could add their technology to their existing line of monitors. While this may not be the huge payday the company wanted it’s about the only way Diabetic Investor sees the company make any money at all.
The second company we meet with was TelCare®, www.telcare.com, a meeting that was anxiously anticipated after visiting the company’s web site and viewing their video demos. Diabetic Investor could not help but be impressed with what we viewed on the web site as it looked like the folks at TelCare have been reading Diabetic Investor and then put our words into action. For years Diabetic Investor has been begging BGM companies to think about the patient when they design their systems and add some simple but very useful features to their systems.
Unlike other monitors that simply deliver a test result the TelCare system actually provides the patient with useful feedback. For example based on test results the patient could receive a message that states; “Congrats Mr. Patient your readings have been great over the past month keep up the good work.” The central fact is the current group of BGM companies has never understood that diabetes is as much a lifestyle as it is a chronic disease. Nor have they ever figured out that most patients do not respond well to negative feedback or no feedback at all.
TelCare also makes the patient’s life easier as the patient can order test strip refills right from the meter. TelCare, who owns their own DME, can then mail the patient their replacement test strips thus saving the patient from having to make another trip to their local pharmacy.
TelCare has also solved another annoying problem experienced by patients; the unit comes with a rechargeable battery. No need to every worry about replacing batteries, using a simple Blackberry like charger the patient can charge the unit like they would their cell phone. According to TelCare with average use a fully charged unit can go 30 days between charges.
As much as Diabetic Investor liked these innovations what really makes the TelCare revolutionary is the unit seamlessly communicates with the patient’s cellphone or computer, no cables or USB hook ups. That’s because inside the TelCare unit is a sim card which basically gives the unit all the capabilities of a cellphone. Simply put the TelCare unit is a cellphone with meter built in, it just doesn’t make or receive phone calls. (In that way it’s a lot like the very popular iPhone which seems to be able to do everything expect make a simple phone call.)
Everyone knows it’s only a matter of time before diabetes technology moves completely to the patient’s cell phone. AgaMatrix and Sanofi-Aventis began this process with their iBGStar meter which attaches to the iPhone and seamlessly works the IBGStar app. TelCare has actually taken this concept one step further and enhanced the system with real time feedback. But that’s just the beginning. Given its cellular capabilities the unit can send readings to the patient’s physician, CDE or care giver. Imagine a child testing their glucose during the school day and having that reading sent to Mom or Dad’s cellphone. Or think about a physician delivering a message directly to the unit with therapy suggestions. And what could be easier for a patient than to see their readings transferred to their preferred diabetes app or computer without having to do anything, all they do is test and the system does the rest.
What was truly impressive wasn’t just the system itself it was the company’s realistic view of the marketplace. Unlike Hygieia, TelCare understands how this business operates and has designed their business to make money under existing market conditions. They know they will not able to sell their unit, which does carry a higher than normal cost and they need to sell test strips to make money. They also fully understand that their target patient is an insulin using patient and they have no delusions about taking on the Big Four. They further understand that unlike the DIGS system, their unit does have the potential to help sell more insulin as their unit seamlessly interacts with the patient’s physician. The system isn’t recommending a change in dosing it comes from their physician.
This is not to say there are not hurdles in front of TelCare, as with any such system someone has to take the time and analyze the data. As we have noted in the past physicians are not currently reimbursed for taking the time to analyze patient data. The company must also deal with the constantly changing landscape of the cellular world. Ironically the day Diabetic Investor meet with the TelCare was the same day ATT announced they were acquiring T-Mobile, the very network used by the TelCare device. What happens if this merger goes through and sim cards become obsolete?
Even with these hurdles Diabetic Investor was very impressed not just with the system itself but the company’s realistic understanding of the diabetes marketplace. The bottom line is the TelCare device is light years ahead of what’s on the market as they have turned a static device into an interactive therapy tool.
