No Pain Makes Gain

Feb 1, 2001 12:00 PM, Denise H. McClinton

Diabetes Market Grows as Manufacturers Race to Perfect Painless Products

The market for diabetes products is growing as fast as the number of people diagnosed with diabetes each year. New products, pharmaceuticals and professional opportunities make it one of the hottest markets for research and development. And the next generation of products will be smaller, faster, use less blood and produce less pain, industry players say. The reviews are mixed, however, when it comes to who should provide these products.

In the United States, the diabetes market is ranked second among all medical devices in terms of size and growth. Close to 800,000 people are diagnosed with the disease every year, and each is projected to spend $2,500 a year on drugs and supplies, according to the American Diabetes Association. For manufacturers and providers of diabetes monitoring and testing products, these numbers mean one thing: opportunity.

"The diabetes market is highly active," says Jim Corbett, president and chief executive officer of Home Diagnostics. "By most accounts, it has grown over 15 percent per year over the last five years."

For an industry that relies on reimbursement, the diabetes market offers an optimism not seen in many product groups. Although reimbursement for testing supplies falls short of industry expectations, say manufacturers that would like to see it better reflect current retail prices, the expansion of coverage directed by the Balanced Budget Act of 1997 to include type 2 diabetes gives home medical equipment providers access to a large, untapped market. Additionally, nontraditional methods of doing business, such as cobranding, can be used to increase profits.

HME providers can also bring a service element to the diabetes market through personal attention and one-on-one communication. "When patients are diagnosed with diabetes, they are often very overwhelmed," says Julie Arel, project manager for Inverness Medical Technologies. "HME providers can teach patients how to use the blood glucose supplies."

Bob Cramer, vice president of marketing and new business development at Chronimed, adds, "When compared to a mass retailer, HME providers have the ability to provide service."

Others disagree. Some experts say pharmacists are better-equipped diagnostically to counsel patients on how to interpret testing results, recognize warning signs of complications and incorporate preventive strategies such as foot, skin and eye care - all critical components of a diabetes management program. Likewise, HME providers cannot compete with the buying power of mass retailers, mail-order companies and chain pharmacies, says one manufacturer.

Still, the focus of diabetes management is tight glucose control, which is achieved only through regular glucose monitoring - good news for those providing the testing equipment. Because most patients are not meeting the current testing recommendations, the opportunity for HME providers to grow in this market is great.

On the Horizon

IN THE DIABETES DIAGNOSTIC market, the name of the game is glucose meters. "Every company in the meter business is looking to provide meters that go faster, use less blood and eventually get to the point where you do not need to take blood samples," says Kim Kelly, director of managed health care at LifeScan.

The first generation of meters (some of which are still available) required 10 microliters of blood and 45 seconds to obtain test results. Today's meters have much lower blood requirements - less than 2 microliters in some cases - and results are available in 15 seconds. One of the newest products for 2001, manufactured by LifeScan, will offer a testing time of 5 seconds and require 1 microliter of blood, placing it in the minimally invasive category.

However, noninvasive testing is "truly the holy grail," says Bob Cramer, vice president of marketing and new business development at Chronimed. But can noninvasive be achieved? Yes, say some companies.

The GlucoWatch, manufactured by Cygnus, checks glucose levels every 20 minutes for 12 hours and sounds an alarm if the levels are too high or low. Cygnus is still awaiting final approval by the Food and Drug Administration.

Semi-invasive sensors offer patients another option for testing with interstitial fluid. Disetronic Medical Systems, MiniMed, SpectRx and TheraSense all have semi-invasive sensors in production.

Other companies, such as Animas and Synthetic Blood International, are developing implantable devices.

Critics of noninvasive blood glucose monitoring say it is important to ask two questions: Are the test results clinically accurate (can they be relied upon to manage medication), and are the monitors economically feasible for broad application?

The industry will know soon enough, says Kelly. He predicts noninvasive meters that meet these qualifications will be on the market in less than five years.

- Close to 16 million people in the United States have diabetes, estimates the Centers for Disease Control and Prevention.

- More than 14 percent of the nation's health care dollars are spent in caring for diabetics.

- Diabetes is the leading cause of blindness in adults 20-74 years of age, as well as the cause of end-stage kidney disease and lower-extremity amputations not related to injury.

- Other complications of diabetes include cardiovascular disease and complications in pregnancy.

When it comes to diabetes management, information is everything. Home medical equipment providers can maximize educational time with customers by providing them with additional resources that will support their efforts to achieve glycemic control. One of the best resources is the Internet. These Web sites offer diabetics information about their disease, prevention strategies and online support groups. Sites that make a difference include

www.diabeteswatch.com www.lifeclinic.com www.diabetesmonitor.com www.diabetes.com www.mendosa.com www.diabetes.org www.aade.net www.diabetes.miningco.com www.niddk.nih.gov

The National Diabetes Clearinghouse offers an online dictionary of diabetes terms often used when talking or writing about the disease. It provides basic information about the disease, its long-term effects and its care. The dictionary is located at www.niddk.nih.gov/health/diabetes/pubs/dmdict/dmdict.htm.

DIABETIC FOOT ULCERS affect 15 percent of all people diagnosed with diabetes, and appropriate footwear can decrease their occurrence, according to Diabetes in America, a publication of the National Institute of Diabetes and Digestive and Kidney Diseases. The role of the home medical equipment industry in providing foot care for diabetics is gaining momentum, and current reimbursement levels enable providers to make substantial profits. What's more, adding this product line gives providers an opportunity to offer patients an overall wellness approach to diabetes management.

It is important to note that providing foot health products takes a substantial commitment, says Larry Schwartz, vice president of Apex Foot Health Industries. According to Schwartz, it is critical that practitioners know how to measure patients' feet and fit the shoes properly because of the long-term complications of diabetes-related foot problems.

Experts Interviewed:

Roy Albiani, director of marketing, and Jim Corbett, president and chief executive officer, Home Diagnostics, Fort Lauderdale, Fla.; Julie Arel, project manager, Inverness Medical Technologies, Waltham, Mass.; Bob Cramer, vice president of marketing and new business development, Chronimed, Minneapolis; Kim Kelly, director of managed health care, LifeScan, a division of Johnson & Johnson, Milpitas, Calif.; Larry Schwartz, vice president, Apex Foot Health Industries, Teaneck, N.J.; Ed Valcarcel, vice president of marketing and sales, Palco Labs, Santa Cruz, Calif.