Diabetes tech companies set sights on Type 2 patients as user numbers climb

Continuous glucose monitor and insulin pump makers are a sliver of the medtech business which have remained profitable throughout the coronavirus pandemic, with patients turning to wearables and different technology-based healthcare as hospitals stuffed and life went distant.
Diabetes know-how companies Dexcom, Insulet and Tandem Diabetes Care ended the primary half of 2021 very similar to they closed 2020, beating the earlier yr’s income or gross sales marks and rising customers.
With patients flocking to CGMs and insulin pumps during the last a number of years, the companies want to additional broaden into current affected person populations, and companies have sights set on patients with Type 2 diabetes.

Dexcom is pouring sources into promoting, together with reportedly tens of millions of {dollars} for a Super Bowl business, as effectively as advertising methods to make sure that patients and physicians know CGMs are an choice for managing Type 2 diabetes.
“It’s now all about consciousness. We went and doubled the dimensions of our gross sales pressure originally of this yr, so we get entry to extra major care physicians who do see numerous the insulin utilizing Type 2 patients,” CEO Kevin Sayer stated throughout a July 29 earnings name. “We’ve had an enormous enhance within the variety of prescribers of our product over the course of this yr. So that may be a large win.”
Sayer added that the insulin intensive Type 2 market will “be each bit as penetrated as Type 1 in some unspecified time in the future in time.”
The Type 2 market may very well be a vital driver for a corporation already constantly rising revenues and income. Dexcom elevated gross revenue within the first half of 2021 by 41% and 103% over the primary half of 2020 and 2019, respectively. The firm introduced in $761 million of gross income within the first two quarters of the yr.
Part of the attract of the market is its dimension. The Centers for Disease Control and Prevention estimates greater than 34 million individuals within the U.S. have diabetes, with 90-95% Type 2.
However, not each affected person with Type 2 diabetes might want to observe glucose ranges as intensely as different patients, and a big quantity don’t require insulin in any respect. Still, diabetes tech might be an choice to assist handle their illness, in accordance with the largest diabetes affected person group.
“People on a number of every day insulin injections who’ve Type 2 diabetes additionally profit from CGM, in the identical approach individuals with Type 1 do,” stated Ruth Weinstock, president of medication and science with the American Diabetes Association, which receives monetary help from a number of healthcare companies, together with Dexcom, Abbott Laboratories and Eli Lilly.
Even if each affected person with Type 2 diabetes doesn’t want or use a CGM, the inhabitants continues to be so massive that it may very well be a major income driver for companies within the house.

SVB Leerink analyst Danielle Antalffy estimates about 3 to 4 million patients with Type 2 diabetes require insulin, and predicts CGM companies might seize over 90% of these patients. Currently, Dexcom estimates that the U.S. Type 2 insulin intensive market is lower than 25% penetrated.
“You do not should get to very large penetration numbers or utilization numbers to get to … simply a $5 billion (*2*) if not nearer to 10,” Antalffy stated.
Are gadgets at all times essential?
As companies prioritize enlargement into the Type 2 market, issues have been raised about whether or not diabetes tech gadgets, which may typically be costly and onerous to persuade payers to cowl, are even essential for all patients.
Three sensors for Dexcom’s G6 system, which is 30 days of provides, have a median retail value of about $425, in accordance with the web site GoodRx. Two meters for Abbott’s FreeStyle Libre 2 system, which is 28 days of provides, have a median retail value of $133. The prices might be on prime of lots of of {dollars} for readers or transmitters.
The merchandise are lined by business payers and Medicare for patients with Type 1 and 2 diabetes requiring insulin, which decrease’s patients’ out-of-pocket prices. However, gaining protection might be difficult.
Dexcom’s Sayer addressed issues about added prices for patients that have already got an costly illness to handle in a current interview, saying extra scientific trials are wanted as there is no “stake-in-the-ground” examine to indicate to payers and physicians.
Weinstock, an grownup endocrinologist, stated anecdotally that even intermittent use of CGMs has improved diabetes administration for patients with Type 2 diabetes who don’t require insulin.
CGMs could also be costly however the knowledge collected and shared with patients may also elevate consciousness about higher administration methods and probably assist forestall the long-term, and expensive, well being degradation that comes with the illness.
“Costly, not solely to society, by way of actual {dollars} — due to dialysis, and so on. — however expensive to the individual and their household, by way of high quality of life and lack of work,” Weinstock stated.
Pricing has been a key piece to the CGM market competitors. Abbott’s FreeStyle Libre merchandise have been the cheaper choice; nevertheless, Dexcom has narrowed the margin with its shift to primarily distributing gadgets by means of the pharmacy channel fairly than the sturdy medical tools channel.
The firm’s new G7 CGM system, scheduled to be launched later this yr, is anticipated to slender the margin much more.
Pricing is not the one technique. While Abbott is primarily involved with attending to the bottom value, Dexcom has began working immediately with business payers like UnitedHealthcare to broaden protection by trying to indicate the advantages of CGM in comparison with different remedies, such as decreasing medicine use and hospitalizations. 
A distinct alternative for pumps
Tandem and Insulet are additionally prioritizing the Type 2 market. However, the chance is just not as massive for the pump makers as a major variety of patients with Type 2 diabetes don’t require any insulin or could not want insulin on the ranges required for pump use.
“Not to say that there aren’t some individuals with Type 2 diabetes who profit from pumps, there are. But there are various, many extra, I believe, who do not require an insulin pump as a result of they do not require that form of complicated insulin supply system, however nonetheless can get advantages from CGM,” Weinstock stated.
A March SVB Leerink survey of endocrinologists and nurse practitioners suggests insulin pump penetration amongst patients with Type 2 diabetes requiring intensive insulin therapy is more likely to prime out at about 30%, which can even be too favorable of a mark.
“I’m unsure we’ll get there … I do not suppose we’ll have the vast majority of insulin intensive Type 2 [patients] on an insulin pump, however we could have all of them on a CGM,” Antalffy stated.
The market can nonetheless be essential as competitors within the house heats up.
Insulet CEO Shacey Petrovic stated throughout a Thursday earnings name that patients with Type 2 diabetes made up about 35-40% of latest customers within the second quarter. The firm can also be following Dexcom’s lead within the Type 2 market by investing in direct-to-consumer advertising.
Insulet grew gross revenue within the first half by 30% in comparison with the identical interval final yr and by 57% in comparison with 2019. Gross revenue totaled $350.2 million within the first six months of 2021.
The firm is going through some sudden challenges as the Omnipod 5 product launch has been pushed again from the primary half of 2021 to late within the fourth quarter. The product has been hyped by analysts, with J.P. Morgan calling it one of many prime product releases of 2021, as a result of it will likely be cheaper than Tandem’s choices and may work with CGMs as a part of an built-in administration system.
Rival Tandem can also be prioritizing the Type 2 inhabitants. CEO John Sheridan stated throughout a Wednesday earnings name it is starting a scientific examine to broaden labeling for the Control-IQ know-how to patients with Type 2. The know-how permits Tandem’s pumps to hyperlink and talk with CGMs to routinely ship insulin.
The examine will start within the subsequent a number of months and sure adopted by a bigger pivotal trial in 2022, in accordance with Sheridan.
Similar to the CGM house, pricing is a big piece within the insulin pump market. Pumps supplied by means of the sturdy medical tools channel, how Tandem primarily sells, can require an upfront cost of as a lot as $5,000.
Meanwhile, Insulet is mirroring a technique utilized by CGM companies and promoting pumps by means of the pharmacy channel, decreasing product prices and permitting for a pay-as-you-go system fairly than bulk, upfront funds.
As Insulet additional builds its enterprise, Tandem has truly elevated income at larger charges during the last two years. The firm grew income within the first half by 58% and 99% in comparison with 2020 and 2019, respectively, with income totaling $165.7 million within the first two quarters of 2021.
Despite the smaller market alternative, insulin pump gamers are nonetheless focusing on and prioritizing the Type 2 inhabitants going ahead, and they’re more likely to profit from the persistence of CGM makers.
“What the CGM companies have executed is absolutely dramatically displaced blood glucose monitoring within the Type 1 inhabitants, and now they’ve their sights set on the Type 2 inhabitants,” Petrovic stated in February.  


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