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.

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.