Diabetes Industry Analyst Gets It Wrong
November 1st, 2007 by Kevin
I just read an article over at Diabetes Health’s online site written by David Kliff, a diabetes industry analyst. My main concern with his article is that advanced information ‘technology’ is being discounted in its ability to participate while in fact it is the only hope for delivering much needed education to patients with diabetes of all types.
I sure hope he’s not asking for yet another diabetes education website!
I was also obviously disappointed in my comment since David missed a perfect opportunity to shine the light on new ways to apply technology for patients since I met with him recently and shared our clinical data. The data from several of our studies show how our GlucoDYNAMIX Automated Diabetes Management System including our QuickTips dynamic education feature delivers improved outcomes from over a dozen trials since 2002.
If you care to read the article go here.
My comment is reposted below since it’s my comment 
Dear David,
I was right with you until you wrote “To my knowledge, no meter has automated this task.”
Clearly, I have to step in here and remind you of the physical limitations of the meter in isolation and how it ultimately functions best as part of an automated patient education system.
Think about Apple’s iPhone + iTunes for a minute and it will help you to understand how healthcordia and Diabetech are driving the convergence of diabetes technology (incl. meters) with diabetes education.
As documented in our clinical trials, the results include behavioral change followed by lowered A1c’s, reduced frequency of hypoglycemia and mitigated excursions of hyperglycemia.
You apparently forgot our one-on-one discussion at ADA Scientific preceding my talk on the convergence of mobile diagnostic devices, rules engine technology and social networks including sharing clinical trial results with you. We also talked about how this convergence is introducing practice efficiencies. Also that these programs have been helping patients and their providers in the field since 2002… yet nobody knows about it???
The pivotal technological element mentioned in your article and in this comment is automation in its most extreme definition.
You were correct in pointing out how much effort is required to upload meter data to Health Vault. However, you also understated the effort required for patients and providers to use the glucose meter manufacturer’s software programs, too.
Through our GlucoDYNAMIX Automated Diabetes Management System (ADMS), I’m sure you will recall from our discussion that any meter connected to our GlucoMON wireless device instantly becomes part of a real-time system which includes various forms of feedback including QuickTips dynamic education. These are delivered to the patient and their team at the teachable moment… as a text message or email, based on algorithms that consider data from the meter including in some cases that a patient may not be using their meter for blood glucose checks.
The QuickTips dynamic education feature of our GlucoDYNAMIX ADMS is in fact the embodiment of what you are asking for in your article above.
And just to be clear for the record, anyone at ADA Scientific who saw my presentation could tell you that ‘fancy technology’ implemented as an ADMS with a focus on behavioral change does indeed lead to better outcomes.
Last 5 posts by Kevin
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November 1st, 2007 at 10:01 am
First, realize that David is a Wall Street analyst, not a healthcare provider. His job is to evaluate stocks for companies that sell products that treat the diabetes market, and while you may not agree with his sentiment, so far, there is little evidence to suggest his outlook is wrong.
The key here is whether the managed care industry will see these products as valuable enough to pay for them, and so far, the answer seems to be a universal ‘no’ in the case of type 2 diabetes, and only occasional ‘yes’ for selected patients in the type 1 market. This market will not take off until someone agrees to pay for this, and the reports from on the apparently limited value of frequent testing among patients with type 2 presented at the ADA Scientific Sessions.
I don’t necessarily agree with these sentiments, but my point is that as a stock analyst, I think David appears more on target than you do regarding the immediate outlook for these costly devices.
November 1st, 2007 at 5:17 pm
And I won’t pretend to be a Wall Street Analyst but… it seems to me that an industry whose revenues are based on a commodity depend on high margin innovative add-ons or ‘exciting new features’ to offset declining profits over time. Granted Bayer has recently picked up market share based on revenue. What I would like to watch in this industry however is market share based on patient units and the effect of shrinking margin on profitability (profit/patient). As a former financial analyst for a Fortune 100 firm, top line revenue can be very misleading.
This industry has to find its next high margin feature somewhere and all I’m saying is that we need to stop looking at the test strip and meter as the sole revenue generator in isolation. The company who commits to focus on outcomes above all else is the one who will capture the highest margin business thus providing funds for R&D to accelerate the cycle of innovation around its products. Test strips will be simply one element of the total solution. Tying it all together with simple technology that makes patients lives easier and delivers improved outcomes… this can be done for less than $0.50 per day including enhanced devices.
The only questions are which company is going to commit first and when as they have no choice in light of shrinking profits and increased competition. When I started in this field six years ago, hundreds of patients had access to these innovations. We are now talking about thousands and soon we’ll see tens of thousands.
At some point share price is effected.