You can check out but never leave

You can check out but never leave

Diabetic Investor was deeply saddened to learn that Eagles Founder Glenn Fry had passed. Thankfully for those of us who enjoyed the Eagles their music will live on forever. This news also reminded Diabetic Investor of something we wrote way back in the day about how this wacky world isn’t unlike the great Eagles song “Hotel California” an industry where you can check out but never leave. This wacky world is full of examples of people and/or ideas that just won’t go away.

This is particularly true in the quest to develop a non-invasive glucose monitor, once thought to be the Holy Grail of diabetes devices. Before the advent of continuous glucose monitoring this quest was focused on conventional glucose monitoring. “Experts” reasoned that patients would more frequently monitor their glucose levels if they did not have to experience the “pain” of performing of a test. These “experts” along with many non-experts believed that patients did not test regularly because patients had to prick their fingers to get a blood sample.

Once CGM became more popular many of these same “experts” reasoned that patients would be more widely adopt CGM is if it also was non-invasive. Although current CGM systems require far fewer “painful” pricks of the finger or insertions of the CGM sensor, these “experts” maintain that these systems would be more widely adopted if finger pricks and/or sensor insertions were eliminated entirely.

This quest for non-invasive glucose monitoring spawned some of the all-time scams in diabetes. GE, yes that company that brings good things to light, blew $8 million investing in the once way cool but now way dead C8 MediSensor, a company which claimed to have a non-invasive CGM. Apple, yes Apple tried to pick up the C8 pieces only to abandon this effort when they like GE found out that this technology just doesn’t work. We could list more examples of companies that have tried and failed but why bother. The reality is to date no one has been able to bring a commercially viable non-invasive glucose monitor to market, this in spite of the fact that millions have been spent chasing this elusive technology.

Typically, the scenario plays out the same way each time one of these efforts becomes public. Companies after raising some seed money hit the road looking for more money. Even though the failures in this area are well documented and easy to find by doing a simple Google search money flows in. (Should we mention that Google themselves has contributed to this fascination with non-invasive technology with their way cool contact lenses which measure glucose.) These companies continue to receive even more money as they insist they are ever so close and with more money they will reach the promised land.

Once the money well runs dry they close up shop only to reappear with a new name but the same old idea that didn’t work the first, second or third time around. To this day Diabetic Investor is amazed that these old worn out recycled ideas that just don’t work continue to get funded. If this is not conclusive proof that there is no cure for stupid we’re just not sure what is. Yet as many times we have exposed these scams these charlatans reemerge and get funded.

The reality here is it’s not just the technology that doesn’t work, the entire premise of non-invasive is flawed, the premise that patients will test regularly just because they don’t have to “prick” their fingers. The reality is patients don’t test regularly not because of the so-called “pain” factor, and yes there are studies which back this up, rather they don’t understand what these test results mean, they don’t understand how to turn data into relevant, actionable information. Put simply there is no value to this number so why bother to know what it is.

As we have noted many times insulin using patients need this information so they can properly dose their insulin. However, this is the smallest group of patients.

Now there was a time when we believed that non-insulin using patients could be induced to test more frequently. This would have required some out of the box thinking which is likely why these ideas were never widely adopted. The fact is when the BGM market was fat and happy no one cared much as money was falling from the sky. Once the market turned into a commodity price driven market these same companies couldn’t justify the expense. Frankly it was more cost effective to concentrate their resources on insulin using patients.

Today the world has changed once again and not for the better. Already we are seeing a trend where payors won’t reimburse for test strips for non-insulin using patients. To Diabetic Investor it is no longer a question of if this will become the norm rather when it will become the norm. Next new therapies like long-acting GLP-1’s are killing the need for patients to test. Patients using a GLP-1 have no need to test as unlike insulin GLP-1’s come with fixed dosing. The reality is primary care physicians who treat over 80% of the diabetes population use HbA1c results as their tool for making therapy changes. These physicians do know the value of regular glucose testing yet they also know their non-insulin using patients just don’t test regularly, if at all.

This is why Diabetic Investor continues to struggle with how a company like Abbott (NYSE: ABT) or Roche can remain in this market. This is also why we struggle with the companies like TelCare, Livongo and iHealth and others in the growing interconnected diabetes management (IDM) space. The reality is for all its promise IDM is best suited for the smallest group of patients, insulin using patients. There is no question the advice/counsel these companies provide is valuable for insulin using patients yet this market segment just isn’t big enough to support a sustainable business model.

Many have suggested that the path to success is to transition from a reimbursement model to a fee for service model. Diabetic Investor has called this the shave club for men model where patients pay a monthly fee and in return receive an unlimited supply of test strips plus coaching.  The premise here is that patients, payors and/or employers will save money as patients adopting these systems will experience better overall outcomes. We see two main problems here, first patients won’t pay the monthly fee and second it targets the smallest group of patients namely insulin users.

While no one likes to talk about it much the dirty little secret in diabetes is that payors really don’t care all that much about outcomes. The reality is payors know that most patients won’t be under their coverage when problems develop. In business to make a profit their goal is simple, manage their diabetic patients as cheaply as possible and let the next payor or Medicare deal with the problems when they develop. Payors talk a good game when it comes to better patient outcomes but the reality is that’s all it is talk.

Another fallacy is that patients care about outcomes. Yes, there is a minority of patients who get it, who are willing to put in the work to achieve better outcomes. But for the vast majority of patient’s outcomes only matter to the extent these outcomes are easy to achieve. It’s not that these patients do not want better outcomes they just don’t want to put in all the work necessary to achieve better outcomes. And the simple fact is no matter which way you want to slice it better outcomes don’t happen by accident and solid diabetes management is work. This is why Diabetic Investor has become such a strong supporter of a company like Intarcia, their system isn’t just simple its idiot proof. This is also why GLP-1 therapy in general is gaining in popularity as it dumbs down diabetes management.

The one area where outcomes do matter is for employers as employers see a straight line between better outcomes and lower healthcare costs. The issue however for employers is how can they motivate their employees with diabetes to practice better diabetes management, what can they do to encourage this group to put in the work necessary to achieve better outcomes. Recently there has been an explosion in corporate health and wellness programs many of which incentivize employees in the hope they will practice better diabetes management. As encouraging as many of these programs are a classic issue remains what to do with employees who aren’t using insulin.

The harsh reality is that for the largest group of patients, those who don’t use insulin, the impact of IDM or a wellness program takes longer to develop. Insulin using patients can take immediate action to improve outcomes, non-insulin patients cannot. Yes, they can change their diet or start exercising, both positive steps, but it will take time before these positive steps yield results. The question is will the patient remain committed to these positive steps until they yield better outcomes, unfortunately the vast majority of studies say they won’t.

To Diabetic Investor this really comes down to one of the oldest adages there is, what will save the patient time and/or money. Not to be redundant but again this is why we love any therapy option which dumbs it down, options which are idiot proof. This is also why we’re not overly optimistic that IDM will have the desired impact. The IDM market actually reminds Diabetic Investor of the insulin pump market, in that it’s not large enough nor is it growing fast enough to support all the companies in the market let alone the many who want to enter the market. Let’s not forget that IDM like the rest of diabetes is also a business.

Rest assured these facts won’t stop the continued pursuit of non-invasive glucose monitoring nor it will stop more companies from entering the ever more crowded IDM space. This wacky world is much like another hit from the Eagles as the path to success is certainly a “Long Run.”