On Monday, UnitedHealthcare reached an agreement with Medtronic to become the preferred, in-network durable medical equipment (DME) provider of insulin pumps, effective July 1, 2016. The decision does not yet apply to members under age 18 or members of United Sierra Health, Life Commercial, and Medicare Advantage plans.
In the last five years, we watched as competitive bidding decimated the test strip market, forcing Medicare beneficiaries to choose products of poorer quality and resulting in increases in mortality and complications. Then we watched as private payers and pharmacy benefit management companies whittled down their formularies to exclude all but a single option per category in insulins, test strips, SGLT-2s, GLP-1s, etc. Time and again, patient advocates were told that it was a battle we would not win, the clinical data didn’t bear out, that it was an illusion that any given patient might perceive benefit from the therapy that was currently working for them.
Between competitive bidding and formulary exclusion, many people with diabetes are frightened and fed up with being told that they can’t have the therapy they choose or the therapy that their healthcare team has prescribed. While the elimination of choice brings down costs on the side of the payer, forcing a patient to a one-size-fits-all therapy significantly reduces the likelihood that patients will benefit from the outcomes-based, tailored precision care that we strive toward. And they may be less likely to adhere to the therapy.
Additionally, with so much happening in innovation in the insulin pump and artificial pancreas device and software space, for Medtronic as the market leader to secure the contract with any of the large payers could be the death knell for some of their competitors. It is no secret that the insulin pump market is a brutal one with smaller, younger companies and their innovations hanging on for a sliver of Medtronic’s market share. Tandem Diabetes (TNDM) took a 20% beating on Wall Street at the announcement of Medtronic getting the UHC contract. The industry has benefited over the last two decades from upstart pump companies pushing the market leader to innovate by releasing superior technology (like Asante’s prefilled components or Animas’s motor and waterproof casing), more user-friendly interfaces (like Tandem’s beautiful color touchscreen), and a reliable blood glucose sensor (from Dexcom, especially important in the move toward sensor-augmented pumps and artificial pancreas technology). Each company, Medtronic included, makes a good pump, but for a device that we interact with as often as we do a cell phone, people’s preference for form factor, operating system, size, IPX rating, user interface, and customer support features should matter in prescribing their therapy.
We stand with the community in renouncing this kind of competitive bidding and high stakes collusion. We stand for choice, for precision medicine, for tailored care. This has been coming at us for years and now it’s here. If you’re not a UHC member, please realize that your payer is next on the list.