ASweetLife was lucky enough to score an interview with Kevin Sayer, the President & CEO of Dexcom.
We are publishing our interview in two parts. In part one, Sayer sketches out Dexcom’s business strategy going forward, following the runaway success of the G6 Continuous Glucose Monitor (CGM). The G6 was released last year, delighting patients and sending Dexcom’s stock price soaring. The company has big plans, and we consider the upshot for people with Type 1 diabetes. In a forthcoming part two, Sayer teases us with the next generation model, the G7.
The subject of business development flowed naturally from my first questions to Sayer on glucose management. While Hemoglobin A1C has long been the single critical measure by which diabetes control has been judged, the rise of the CGM has given users new metrics to pay attention to: standard deviation and time-in-range. Forward-thinking endocrinologists have encouraged their patients to pay close attention to these new markers, but as of yet we don’t have enough study validating standard deviation or time-in-range to long-term health outcomes, and as such, we lack consensus benchmarks to shoot for.
I asked Sayer if the company hoped to drive such work:
“I think these measures will make people much healthier and enable physicians to practice better medicine. It’s something I’ve believed for a very long time, I’m really excited for it. As far as driving these as measures, I think it’s great, but there’s a couple things that have to happen. You can only measure time-in-range if you’re wearing a CGM, so that means everyone’s going to have to have access to a CGM, and there will need to be some kind of CGM that is a diagnostic versus the one that you wear every day for those patients who aren’t on CGM all the time.”
In fact, this is a very much a piece of Dexcom’s master plan: the more that experts accept that time-in-range (or other, related measures) is the best measure of glucose control, the more doctors and patients will request it, and ultimately, the more insurance companies will feel obligated to pay for it.
“We view this as a tremendous opportunity for patients in the future and for us as a business, and as we develop disposable configurations of our system over the next little while I think that will be a wonderful market for us.”
We spoke a lot of about cost and price during the interview, and I had to remind myself repeatedly that people with diabetes are not, strictly speaking, Dexcom’s market. It is the insurance companies that overwhelmingly pay for the devices, and thus the insurance companies that ultimately need to be convinced of their necessity.
“If we’ve learned anything at Dexcom over the years, it’s that technology’s not usable until somebody will reimburse for it. And we have to develop the model for those that pay the bills to pay for it. That’s where we’re focusing a lot of our efforts.”
Sayer explained that the insurance companies are somewhat trigger shy, based on mediocre results and poor patient compliance in the early years of CGM technology:
“A lot of the fear in the past of people that buy CGM technology – and this really wasn’t driven by Dexcom technology but by others – they’d pay for the CGM and then the patients would quit using it, and they’ve wasted a bunch of money.”
He is also extremely cognizant of the barriers that many face in getting insurance approval for their CGMs: the need to, for example, document and re-document risk of hypoglycemia:
“We try [to reduce those barriers] all the time, because it’s ridiculous. The best example is I believe Medicare patients have to re-document every year that they still have Type 1 diabetes. We don’t make it hard, the people who pay for the technology make it difficult, that’s how they control their cost. We’re getting better but we still need to make it easier, that’s really one of our core missions… it’s very obvious now that the CGM is growing as the standard of care, even to the payers.”
That phrase, “standard of care” is a lynchpin of Dexcom’s growth strategy. While success in the Type 1 community has been dramatic and unmistakable, the company’s long-term and potentially more lucrative goal is to get its glucose monitoring products accepted in some form as a standard of care for people with Type 2 diabetes, and even with pre-diabetes. For now, Dexcom is exploring ways for such patients to use its CGM in a more limited manner:
“The model for somebody with Type 2 who is not taking insulin is a bit different. The people who pay for this technology [the insurers] aren’t going to pay for those patients to wear a CGM 24/7, 365 days a year. And so we’ve been trying to come up with models and analytics around our device in that population. Does a patient need four a year? Do they need one a year? Do they need one a month?”
Such patients would use a CGM for limited amounts of time, using the results to help analyze the impact of their pharmaceutical regimen and lifestyle decisions:
“With the CGM and Type 2 diabetes you learn very important things. You learn the effectiveness of your medications. These drugs are not inexpensive, how do we know that they work? How do we document that this therapy is working for you? You find out very quickly with a CGM. The other thing that’s tremendous is behavioral learnings. These patients for the first time see the effect of a late-night meal. Or a bedtime snack. ‘Wow, my blood sugar went up 40%? How’d that happen?’ Not all Type 2 patients need a behavioral change and not all of them need pharmaceutical change, but it’s really easy to tell which ones need which when you put them on a CGM. You could never find that out with fingersticks in a million years.”
I’m inclined to view this strategy shift as good news for the Type 1 community. In the attempt to tap into the significantly larger T2 and pre-diabetes markets, Dexcom has a huge incentive to make its products more accessible, less expensive, and even easier to use. In our next installment, Sayer will tell us how will they hope that the company’s next generation CGM – the G7 – will accomplish exactly that.
Part 2: A look at Dexcom’s G7