Medtech Manufacturers Invest to Meet GrowingDiabetes Market

Industry watchers admit that established medical device markets in the cardiovascular and orthopedic sectors are experiencing volatility, leading to some reduced interest from investors. Meanwhile, one medtech sector that continues to meet increasing expectations is the group of technologies and products centered on diabetes care.

According to Patrick Driscoll, publisher of MedMarkets newsletter and president of MedMarket Diligence LLC (Foothill Ranch, CA), a research firm focused on advanced medical technologies, the global market for diabetes monitoring and therapy is set to surpass $37 billion by 2010. “There are few markets in the device industry that have the combination of a large and growing patient population, well established products and technologies, and opportunity for continued product and market development as in the diabetes market,” says Driscoll.

According to a report released last month by the U.S. Centers for Disease Control and Prevention (CDC; Atlanta), there are now nearly 24 million people in the United States with diabetes—an increase of 3 million in the past two years. With 8% of the U.S. population diagnosed as diabetic, CDC estimates that total annual economic cost of the disease in 2007 was $174 billion. Echoing the increasing concern that diabetes is approaching epidemic proportions, the agency believes that 57 million more Americans are prediabetic and will likely develop the disease if it goes undiagnosed and is not properly monitored and managed (see sidebar).

The United States is not alone, as the International Diabetes Federation (IDF: Brussels) reported the worldwide prevalence of diabetes in 2007 at 246 million, projected to increase to 380 million by 2025. IDF attributes 3.8 million deaths worldwide in 2007 to diabetes, accounting for about 6% of total global mortality. IDF says that figure is about the same as mortality from HIV/AIDS. North America has the highest rate of diabetes prevalence at 9.2%, followed by Europe at 8.4%.

Worldwide outlays for diabetes care reached $232 billion last year and are expected to soar to $302.5 billion by 2025. Most cost projections do not include the associated conditions of coronary artery and peripheral vascular disease, stroke, diabetic neuropathy, amputations, renal failure, and blindness that can result from diabetes.

Whereas diabetes was once fatal, with proper care and treatment it is now generally considered a manageable disease. However, patient compliance with daily testing, diet, and exercise requirements can be problematic. This is generally more of an issue for Type 2 diabetics, in whom the disease may have been developing and has gone undiagnosed for years.

One of the major drivers of medtech development for the diabetes market is the goal of more patient-friendly devices that reduce or eliminate the pain and inconvenience associated with blood testing and glucose monitoring. Current medical devices used in diabetes care include blood glucose monitors (both point-in-time and continuous), test strips, syringes, infusion sets, insulin pumps and delivery systems, point-of-care systems, and disease management software. Bariatric surgery, or gastric bypass, is increasingly also seen as an option for diabetics, particularly for those that are morbidly obese.

Major medtech manufacturers addressing the diabetes care market include Abbott Labs (Abbott Park, IL); Johnson & Johnson (J&J; New Brunswick, NJ); Medtronic Inc. (Minneapolis); F. Hoffman La Roche Ltd. (Basel, Switzerland); and Siemens Healthcare Diagnostics (Tarrytown, NY), a division of Siemens AG (Munich, Germany).

J&J operates two divisions in the sector: Animas Corp. (West Chester, PA), a manufacturer of insulin pumps, and LifeScan Inc. (Milpitas, CA), which produces a line of glucose monitors. Siemens became the world's largest diagnostics company with its July 2006 acquisition of Bayer Diagnostics. But Roche is the largest player in diagnostics for diabetes care.

Although large medtech companies dominate the realm of diabetes care, start-up and emerging companies have carved out a healthy niche by way of significant innovations in diagnostic technologies and therapeutic modalities (see Table). Such small-company innovators have made headway against their larger competitors by developing continuous monitoring systems, improving point-in-time monitors, and advancing the realm of integrated systems for blood-glucose monitoring and insulin delivery.

One smaller medtech company with an exclusive focus on the diabetes market that has captured a great deal of attention is DexCom Inc. (San Diego). In May 2007, the company received the first FDA approval for a seven-day continuous glucose monitoring system. An earlier iteration of the device intended for three days of continuous use was approved a year earlier. DexCom's Seven system includes a tiny sensor that is implanted under the skin, a small transmitter attached to the body with an adhesive, and a handheld wireless receiver. According to DexCom, “the Seven system measures glucose throughout the day and night, allowing users to see trends and patterns in glucose readings. Glucose trends, alerts, and a low alarm provided by the Seven system help users stay between the lines of their target glucose range.”

According to many researchers and clinicians, continuous glucose monitors that capture readings during normal activities—exercise, rest, sleep, eating, and so on—can provide a more comprehensive view of a patient's blood sugar level than the ‘single frame' readings of point-in-time meters.

Devices that compete with DexCom in the continuous glucose monitor space include the Freestyle Navigator from Abbott, and the MiniMed Paradigm and Guardian RT from Medtronic.

In the point-in-time glucose monitoring market, a wide range of products are available from major players such as Abbott, J&J LifeScan, Medtronic, Roche, and Siemens. Other medtech companies competing in this category include AgaMatrix Inc. (Salem, NH); Arkray Inc. (Kyoto, Japan); Home Diagnostics Inc. (Ft. Lauderdale, FL); Nova Biomedical, a division of Sanvista Medical Inc. (Clearwater, FL); and U.S. Diagnostics Inc. (New York City).

The glucose monitor segment increasingly resembles a consumer products market, complete with stylized devices available in a variety of colors and touting convenience, portability, and ease of use. Production-rich television ads for these products run regularly on both broadcast and cable outlets. Many companies have embraced the 'razor-blade model,' in that diabetic consumers can get their monitors for free but are then locked into using a particular test strip. A report by Frost & Sullivan (San Antonio, TX), North American Glucose Strips Markets, published in February of this year, says the market for glucose monitor test strips was $3.09 billion in 2006 and is forecast to reach $4.77 billion by 2013.

In the insulin pump arena, a company garnering significant attention is Insulet Corp. (Bedford, MA). Insulet's OmniPod system includes a compact, lightweight insulin pump (the OmniPod), and a companion, handheld, wireless personal diabetes manager (PDM). The OmniPod is worn discreetly beneath clothing and delivers precise, personalized doses of insulin based on instructions programmed wirelessly through the PDM. The system features no tubing and virtually pain-free automated insertion. The PDM, which the company describes as very similar in look and feel to a personal digital assistant, features an integrated blood-glucose meter; disease management software; and integrated storage and display of all insulin delivery, blood-glucose, and carbohydrate records.

OmniPod competitors include the OneTouch Ping system from J&J Animas, the CozMore insulin technology system from Smiths Medical MD (St. Paul, MN), and the Accu-Chek Spirit insulin pump system from Roche.

Researchers are dreaming of and working to develop a cure for diabetes. But the long-term goal most often cited for the field of diabetes care is the development of an artificial pancreas that would integrate continuous glucose monitoring with insulin infusion and ongoing regulation of blood-glucose levels. In such a closed-loop system, a glucose sensor is implanted under the skin for continuous monitoring. Blood-sugar readings are then transmitted to the monitor, and the onboard computer calculates the proper dose of insulin, which is then delivered by an insulin pump worn by the patient.

But developing a viable artificial pancreas is not so easy. While suitable FDA-approved monitors and pumps are already available, the stumbling block is the computer algorithms that are needed to give the system step-by-step instructions while allowing for a myriad of intervening variables.

Tying continuous sensing to insulin delivery will be a “mega step forward,” says Aaron Kowalski, PhD, strategic research projects director at the Juvenile Diabetes Research Foundation (JDRF; New York City). JDRF established the artificial pancreas project in 2005. The research initiative is dedicated to accelerating progress toward a closed-loop, automated insulin-delivery system. “We are on the cusp of a revolution in diabetes care,” says Kowalski.

Last month, at a meeting of the National Institutes of Health (NIH; Bethesda, MD), diabetes researchers concluded that an artificial pancreas is “just years away”. Roman Hovorka, PhD, of the University of Cambridge (Cambridge, UK) added, “We are on the brink” of a first-generation device. Hovorka is working with experimental devices and components supplied by Abbott and Medtronic.

Diabetes care continues to be a major growth sector for medtech manufacturers. Roche leads the sector with a revenue projection of nearly $2.8 billion for 2008. Medtronic posted $1.02 billion in diabetes care sales for 2007, and is reportedly planning to increase its R&D in the sector by 35% this year. Abbott posted an 18% gain in 2007 diabetes revenues over the previous year.

As Driscoll of MedMarket Diligence says, “Medtech manufacturers in the diabetes care market are able to focus on innovation that will have a very positive impact on the lives of a dramatically growing number of patients.”

© 2008 Canon Communications LLC

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