Historically, the medical devices world has been a highly proprietary industry, having long been characterized by the development of specialized, patented technologies that are closely guarded by their creators. You won’t find an App Store here with APIs handed out to developers to create tools off of a base technology.
In a surprising development, adversaries are becoming allies in at least one subset of the medtech world: diabetes.
This month, medical device giant Abbott announced that it has now teamed up with four of the industry’s largest insulin pump companies — Medtronic, Insulet, Tandem Diabetes Care and Ypsomed — to integrate their automated insulin delivery systems into its its FreeStyle Libre continuous glucose monitor (CGM). Dexcom, which is Abbott’s biggest competitor in the CGM space, has also been pursuing similar integrations over the past decade. Its CGMs are compatible with automated insulin delivery systems from Insulet, Tandem and Beta Bionics.
The companies involved in these collaborations say they are proud to give consumers more choice and accelerate the pace of innovation in the diabetes space. Consultants and industry experts say the partnerships are smart moves to stay relevant in the rapidly-developing diabetes care space.
And of course there is the profit motive. Until this week, automated insulin delivery systems were approved only for the treatment of type 1 diabetes. The FDA announced on Monday that it has cleared Insulet’s Omnipod insulin pump as the first automated delivery system approved for the treatment of people with type 2 diabetes, opening the door for diabetes device makers to soon go after a new — and much larger — patient segment.
Given this news, partnerships between the makers of CGMs and insulin pumps are likely to continue and expand going forward, experts say.
Foes become friends
Abbott began partnering with insulin pump manufacturers nearly five years ago. The first collaborations came in 2020, when Abbott announced plans to integrate its FreeStyle Libre technology with the automated insulin delivery systems made by Insulet and Tandem for type 1 diabetes patients.
The company then integrated its FreeStyle Libre device with Ypsomed’s automated insulin delivery system in 2022. Abbott’s latest diabetes device collaboration, the new partnership with Medtronic, was announced less than two weeks ago.
Abbott’s FreeStyle Libre devices involve a small sensor applied to the skin, typically on the back of the upper arm. These devices are designed to measure a patient’s glucose levels as they go about their daily life, transmitting the data to a reader or smartphone app. By adding automated insulin delivery technology, the system will be able to automatically adjust insulin doses to keep the user’s glucose in range.
“We hear every day from doctors and people with diabetes that technologies like our FreeStyle Libre system have made managing the condition easier. But continuous glucose monitors are only one piece of the puzzle. That’s where the power of partnership comes in. And that’s why we’re working with other companies in the industry to bring new, integrated solutions aimed at making diabetes care as easy and accessible as possible,” Chris Scoggins, senior vice president at Abbott Diabetes Care, said in a statement to MedCity News.
Industry partnerships make for more connected care, greater patient choice and better health outcomes, which is “a win for everyone,” he added.
Abbott’s industry partners seem to view these collaborations in the same way.
Que Dallara, president of Medtronic Diabetes, highlighted the fact that her company’s partnership with Abbott will allow it to expand access to its automated insulin delivery system, given that Abbott has the most popular CGM on the market. Abbott’s FreeStyle Libre products have more than six million users who have type 1 or type 2 diabetes.
She added that the collaboration provides people with diabetes expanded choice, calling it “a win/win all around.”
Another leader in the diabetes device space — Eric Benjamin, Insulet’s chief product and customer experience officer — said that his company wants users of its Omnipod automated insulin delivery system to have their choice of leading continuous glucose monitors. This is why Insulet has integrated its system with the glucose monitoring devices made by both Abbott and Dexcom — which is something that Tandem has done as well.
“This type of collaboration fosters and accelerates innovation for customers, leading to more comprehensive and effective technologies that improve the lives of people with diabetes,” Benjamin stated.
Dexcom — the other main player in the continuous glucose monitoring world — forged its first automated insulin delivery partnership in 2015 when it teamed up with Insulet. Integrations with Tandem and Beta Bionics came in the years that followed.
Getting ahead of the competition
By pursuing partnerships with automated insulin delivery companies, Abbott and Dexcom are working to cement their status as leading CGM providers and remain important market players in diabetes, said Aaron DeGagne, a senior analyst for healthcare at PitchBook.
“These partnerships will make it easier for patients to access a combination of best-in-class glucose monitors and insulin pumps, and will likely generate additional market share stickiness for the leading vendors,” he declared.
The fact that medical device companies are teaming up provides further evidence for the increasing consumerization of healthcare, particularly in diabetes, DeGagne added. Many patients have “strong brand preferences driven by the launch of new features and supported by very effective marketing campaigns,” he explained.
To DeGagne, Medtronic’s choice to partner with Abbott this month was probably precipitated to an extent by Abbott’s already existing partnerships with other insulin pump vendors. Not participating could have led to share loss, he pointed out.
“While Medtronic is unlikely to gain significant share in the CGM space with their own devices, they are not completely giving up on the market either given robust future growth opportunities,” DeGagne said.
He also noted these partnerships enable the largest vendors to maintain strong distribution and patient access in the face of competition from next-generation integrated CGM and insulin pump technologies, which could hit the market in coming years.
Sean Mehra, CEO of virtual primary care provider HealthTap, echoed DeGagne’s comments.
“This fairly unusual alliance of otherwise competitors signals a fear of disintermediation of these established players by new models and entrants in the space that are directly interfacing with patients and determining what treatments they receive,” Mehra remarked.
Large incumbents like Abbott and Dexcom are leveraging their trusted brands and established consumer bases to “leapfrog the new competition,” he explained.
In order to remain competitive going forward, Mehra believes these incumbents will need to market holistic, bundled offerings that include things like telehealth and digital care management tools. This means that CGM makers could take their partnerships even further over the next decade.
“You’ll see a new ecosystem of partnerships between these medical device and durable medical equipment companies and telehealth provider groups in order to establish and maintain deeper and direct relationships with their consumers over potential competitors,” he declared.
Improving patient health
The country’s worsening diabetes crisis is another reason that medical device companies are coming together to innovate, pointed out Sheila Shah, managing director and leader of digital healthcare at L.E.K. Consulting.
About 1.2 million Americans are diagnosed with diabetes each year, and the disease cost the nation $413 billion in medical costs and lost wages in 2022.
“I think the reason behind the partnerships is likely the awareness that managing diabetes involves a multi-pronged approach and that no one device, drug, and/or lifestyle choice will be the magic bullet,” Shah said.
Integrating one company’s glucose monitoring technology with another’s automated insulin delivery system can make patients’ diabetes management easier because it takes the burden and guesswork and worry out of insulin dosing. These types of collaborations can improve patients’ health outcomes while reducing the burden of constant decision-making, Shah noted.
Beth Mosier, a director in West Monroe’s healthcare M&A group, agreed with Shah, saying that such partnerships seek to make the care delivery continuum more seamless for people living with diabetes.
“Integrating continuous glucose monitoring with automated insulin delivery and maintenance will enable people to spend less time thinking about their diabetes and more time living their lives. Whether and how these types of partnerships will continue to develop will be predicated on how well they can demonstrate impact on key metrics like adherence to treatment plans and patient health,” Mosier noted.
Diabetes device manufacturers now have an opportunity to improve outcomes through the use of dual CGM-insulin pump devices across an entirely new patient population, thanks to the FDA’s Monday decision.
Now that the first insulin pump has been approved for use in type 2 diabetes patients, these partnerships will soon be able to serve a much wider patient base. CDC data shows that 90-95% of the nation’s 38 million people with diabetes have type 2.
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