Why design matters.

Why design matters.

Looking at the diabetes device world it’s really a battle between a patient friendly design and a business friendly design. Nowhere is this more apparent than in the insulin pump world and perhaps no better example of this battle exists than the wireless pump arena. Currently there are two FDA approved wireless insulin pumps; the OmniPod from Insulet (NASDAQ:PODD) and the Solo from Medingo who is owned by Roche. Although the Solo is FDA approved the product is not yet on the market and it seems Diabetic Investor created quite a stir when we announced the product was dead – some mistook this statement to mean that Roche would never launch the Solo which isn’t true but maybe should be true.

While Diabetic Investor has been critical of how Insulet has been running their business we still believe the OmniPod system is the most patient friendly insulin pump on the planet. The problems with the OmniPod are not related to the system itself rather how the company seems to be trying to screw up a very good thing. As we noted before quality issues and high manufacturing costs are the two issues which have plagued Insulet. Hopefully both issues will be rectified when the company launches their new smaller and cheaper to make Eros pod.

In an attempt to differentiate their system from the OmniPod and create a disposable pump with a lower cost of goods, the folks at Medingo decided to go with a semi-disposable system. Yet in their zest to keep costs low they could not find a way to make their systems patient friendly.  This is why Diabetic Investor strongly believes that even if Roche does launch the Solo the product will fail miserably making it basically dead on arrival. Although the folks at Insulet would probably love it if Roche did launch the Solo as it will help sell more OmniPod systems.

Now in the interest of full and fair disclosure everyone should be aware that David Kliff, publisher of Diabetic Investor, has been using the OmniPod for some time and Insulet gives the system to him at no cost. (This basically means the company has been paying for all the abuse Diabetic Investor has been dishing out recently.)

Knowing this the good people at Medingo invited Mr. and Mrs. Diabetic Investor to see the Solo. Frankly the best way to describe this encounter when the folks at Medingo were demonstrating how a patient would use the Solo all we could think of was a parent on Christmas Eve trying to assemble their child’s toy and things weren’t going to well. At the end of the demo without any prompting Mrs. Diabetic Investor said; “You really expect my husband to do all that stuff every three days when all he does now is fill his pod with insulin and pushes a button.” The bottom line with the Solo and all these other semi-disposable systems that were designed more to keep costs low rather than be patient friendly is they won’t stack up when put next to the OmniPod.

Soon we’ll find out if design matters in the conventional pump world when patients put the Tandem t:slim next to a Medtronic (NYSE:MDT) or Animas insulin pump. Based solely on design Diabetic Investor is pretty sure the t: slim will win and win by a wide margin. Now this doesn’t mean patients will actually use the t: slim as great design and a superior user interface does not get the t: slim into the physician’s office or covered by insurance but it will surely get the attention of insulin pump patients who are getting pretty tired of the aging Paradigm line and equally aging line of Animas pumps.

This focus on design is somewhat new for Diabetic Investor and a departure from how we felt about these systems when they were first introduced. However, it’s hard to ignore the success of the iPhone and iPad two systems that demonstrate what happens when combine great design with a superior user interface. The success of the iPhone and iPad also point to another important feature that has been ignored too long at the established and hopefully will be embraced by the newcomers- PUT THE NEEDS OF THE CUSTOMER FIRST. This is exactly what Apple has done and just one more reason why the company is doing so well.

The harsh reality in the insulin pump world is that Medtronic and Animas have become so big and bloated that they have forgotten what goes on in the real world. They have forgotten why they became the number one and two players in the insulin pump market and they mistakenly believe that just because they have scale they cannot be beaten. They would be wise to learn a lesson from the Apple emergence and remember that it wasn’t that long ago that many believed Apple was dead and Microsoft would rule the world.

Insulet also would be wise to remember that superior design will not cover up quality issues or lower the cost of manufacturing. That being first to market with a new and innovative product will only take the company so far. The company must realize that while they have proved there is a market for wireless pumping, that they too are not immune from competition even when that competition isn’t offering a better product.  Superior design is great but when it comes to insulin pumps patients will take a reliable system with an ok design over a non-reliable system with a great design every time.

Frankly it’s great to see companies like Medingo, Tandem and CellNovo come to market as if nothing else it will stir the pot and hopefully push the establish players to get better. The insulin pump market is in desperate need of not just more reliable systems but systems that make insulin pump therapy easier and patient friendly. Diabetic Investor has no doubts that many of the adverse events associated with insulin pumps could be avoided with better design; that more physicians would advocate insulin pump therapy IF pumps were more patient friendly and more reliable.

For years Diabetic Investor has been stating that the insulin pump market is not large enough nor is it growing fast enough to support all the existing players let alone the many new companies seeking to enter the market. We felt this way because the established players had lost touch with the people who actually use their systems and became more concerned with their bottom lines. Now that we have seen some of these new systems, systems that realize there is real person who must use them combined with companies who view patients as assets and not liabilities the possibility exists that the insulin pump market could see real growth.

Great design won’t change everything but the “old guard” would be wise not to underestimate its value.