Dexcom Tries Direct-to-Consumer Approach

Dexcom is in the middle of a direct-to-consumer advertising campaign for its G5 Mobile CGM System. Is this DTC strategy paying off?

Marie Thibault

In coordination with a new product launch, Dexcom, Inc., a major maker of continuous glucose monitoring (CGM) systems, has invested in a direct-to-consumer marketing campaign. The effort puts information about the company's G5 Mobile CGM System, which received FDA approval in August 2015 and CE Mark in September, in front of prospective patients.

The campaign, which started in the last quarter of 2015, has included a variety of media forms, including print publications, blogs, search, social media, events, video ads, in-office advertising, and information packets, management explained on the company's fourth quarter earnings call this week. 

So far, this tactic seems to be successful. Kevin Sayer, Dexcom president and CEO, said that during the fourth quarter, the campaign "delivered over 200 million targeted impressions," according to a Seeking Alpha transcript of the earnings call. He added,

Steven Pacelli, the company's executive vice president of strategy and corporate development, commented further on the DTC campaign. "We're certainly seeing success in driving awareness at the patient level, more so than at the clinician level . . . we've said in prior quarters that the biggest driver for our growth has been patients referring to other patients . . . We're continuing to see that, and I think our DTC campaigns are really adding to that push," he said, according to the call transcript.  

The G5 Mobile CGM System allows a patient's glucose measurements and data to be sent directly to a smartphone. In the fourth quarter, the launch broke the company's record for new patient adds. At the same time, Sayer explained to analysts on the call, tech support calls have increased because of the complicated nature and variety of smartphones being used. The Android version is expected to be available later this year and an updated version of the G5 Mobile app, which will be submitted, will add more useful features, he said. 

Dexcom is also planning a U.S. launch of a new receiver and insertion system for the G5 Mobile CGM System by the end of 2016. 

The DTC campaigns are a large investment. On the company's third quarter earnings call in November, the management team noted that more than $2 million was spent to get ready to start the campaign. While the exact amount of spending on the DTC awareness strategy was not identified on the fourth quarter call, the investment falls into the Selling, General, and Administrative expense category, which increased from $36 million in the fourth quarter of 2014 to $61 million in the fourth quarter of 2015. Of course, much of this increase is related to sales rep hiring as well as other efforts.

Sayer told analysts on the earnings call that the DTC campaign will continue through the first two quarters of 2016 before the company evaluates the strategy. "We obviously know how much we've spent. We also know how much we've increased the leads that we've generated through our digital media, and the increase has been absolutely wonderful," he said, according to the transcript. 

Marie Thibault is the associate editor at MD+DI. Reach her at [email protected] and on Twitter @medtechmarie. 

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