The good news for America's 17 million diabetes sufferers is that the disease is no longer an early death sentence. Careful monitoring of blood glucose — and careful attention to the early warning signs of complications — can ensure a long, healthy life for people with diabetes. The bad news for diabetes-management advocates is that nearly 6 million Americans with diabetes do not even know they have the disease, according to the American Diabetes Association.
Fortunately, clinicians and the federal government are beginning to understand the benefits of early diagnosis and disease management, and this growing awareness means huge opportunities for the manufacturers and providers of diabetes-management products.
“Ten or 15 years ago, doctors were much more likely to tell someone, ‘You have only a touch of diabetes,’” says Mark Samuels, chief executive officer of SpectRx, a company whose new glucose monitor tests interstitial fluid instead of blood. “Today, they realize that if you have diabetes, you'll be subject to kidney failure, blindness, non-traumatic amputation and other complications. [Consequently], people are living longer and being much more aggressive about managing blood glucose.”
But awareness is not the only engine driving what the experts say is a 10 to 20 percent annual growth rate in the diabetes-management market. Demographics also are playing a role. “The substantial growth of Type 2 diabetes has more to do with diet and exercise issues,” says Kevin Seifert, vice president and general manager of Beckton Dickinson's consumer health care division. “This is true not only for Americans [but also] for other countries that are becoming more Westernized.”
Adding fuel to the fire are changes in the ethnic diversity of the U.S. population and a rapidly growing aging population, according to Jennifer Hahamian, senior vice president of sales and marketing for Metrika, a company that recently introduced a handheld A1C testing device. “The number of diagnoses will continue to increase as we get older and fatter — and as we increase in ethnic diversity,” she explains.
Blood-Glucose Monitoring: Price and Innovation are Key
On a field where big players dominate and everyone bats 1000, blood-glucose monitor manufacturers have to work hard to stand out from the crowd, according to Tom Panik, vice president of sales and marketing at Home Diagnostics. “The quality of the product is basically equal today,” he says. “So the market favors some of the larger players [like Roche, Johnson & Johnson, and Abbott Laboratories], because they have big sales organizations to educate health care professionals.”
Today, high-quality blood-glucose monitors are plentiful and affordable, and consumers are making the buying decisions once reserved for clinicians. Consequently, “in this industry, you truly have a medical device and a consumer market blended into one,” Seifert explains. “Brand recognition plays a role, but this is not a cola war. At the end of the day, there still need to be real product features that create market differentiation.”
In many cases, price is the distinguishing factor, Panik says. Medicare reimbursement profit margins are narrow, private payers are becoming more cost-conscious and “eighty percent of diabetics make less than $30,000 per year,” he says. “We put out a high-quality product that's very affordable. Most of our products are co-brands, sold under the label of providers and pharmacies such as Express-Med, Medline and Walgreens.”
Another way for a product to distinguish itself is through innovation, the experts agree. However, “for small companies to take market share without a large partner, they need to offer a significant advance,” Samuels says.
The Holy Grail of innovation, according to Seifert, is the elimination of pain. “It's all about less pain,” he says. “When you have a smaller lancet and a smaller sample, you have less pain. [Beckton Dickenson] is the only company that has a 3-microliter sample size and a five-second read time.”
But SpectRx is taking a different approach to reducing the pain of blood-glucose monitoring, by developing a device that monitors glucose continuously. “If you take a small blood sample, you're just making a single measurement, and blood tends to clot,” he explains. “We think interstitial fluid — the fluid between the cells, which carries glucose from the capillaries to the cells — is a good testing medium. [Our device] pulls the fluid outside the skin, because the body naturally wants to attack something that's inside the skin.”
Currently, most continuous glucose monitors require a traditional finger-stick calibration every four to five hours, Samuels admits. But the days of finger-stick monitors are numbered, he says. “In five years, the diabetes test market will be dominated by continuous glucose monitoring technology.”
Shifting gears, Metrika has developed a product that does not measure blood glucose at all. While blood-glucose monitors are important tools for gauging a patient's day-to-day success at managing diabetes, they cannot tell a patient whether he or she is at risk of developing health complications, Hahamian explains.
“Even if you're testing glucose four times a day, you're still missing something,” she says. “A1C is the only test that tells you where you're headed, in terms of complications.”
A1C, the hemoglobin that attaches to blood cells, records what a person's glucose levels have been during the past two to three months, Hahamian explains. “People with diabetes and their doctors are told to manage A1C levels below 7 percent,” she says. “If you keep it below 7, you dramatically reduce the risk of complications. Until now, patients had to go to a lab to be tested on a big piece of equipment. But Metrika has developed [the A1cNow], a miniturized technology with lab-like accuracy.”
Within five years, Hahamian predicts, “people will be testing their A1C levels every other month at home.
Diabetic Footwear: An Untapped Market
Nearly two-thirds of people with diabetes suffer from mild to moderate nervous-system damage — called neuropathy — that can impair sensation in the feet and hands, according to the American Diabetes Association. Not surprisingly, these people often are unaware of minor foot abrasions until the abrasions become stubborn wounds that refuse to heal.
For many neuropathy sufferers, the result is amputation. Each year, 82,000 people with diabetes receive lower-limb amputations, the ADA says.
But preventive care can reverse this trend. “We have not cured diabetes, but we can manage it,” says Bob Fox, vice president of sales and marketing for Atlantic Footcare, a diabetic insole manufacturer. “Once ulcers begin, they're costly to manage, and they don't heal well. That's why a pressure-reducing insole is the first line of defense.”
Unlike reimbursement in many sectors of the home medical equipment market, Medicare's coverage of diabetic footwear is top notch, according to Charles Dillon, president of MMAR Medical, a distributor of diabetic footwear. “The diabetic shoe program is the only program that I'm familiar with where Medicare pays for prevention,” he says. “Eighty-five percent of people who have diabetes qualify to receive the benefit, but only about 10 percent of them take advantage of Medicare's foot program.”
One reason for the lack of participation is that the clinicians — and the patients they serve — are not aware that such a benefit exists, Dillon continues. “It's a real awareness problem. We work with a company [called Acor] that has hired a certified pedorthist/orthotist to conduct seminars [to raise awareness] around the United States.”
Another barrier to foot-health management is the lack of qualified providers of diabetic footwear, Dillon continues. “The key to growth in this market is the availability of people who are trained in the Medicare provider business to treat these patients. It's a very good business for smaller providers, because it's a way to give an additional service and diversify your business a little bit.”
Fox agrees that availability is one of the customer's primary concerns. “They need to know that these products exist and that they can afford [the products].”
The sky is the limit, for growth in the diabetic footwear market, but growth requires work on the providers' part, Dillon says. Many states require providers to become certified pedorthists as a prerequisite for fitting diabetic patients with therapeutic footwear, he explains. “But if you become a certified pedorthist, you can do custom work and work with an array of private insurance companies. You have to go to school for a minimum of three weeks and then pass a test,” but the rewards are well worth the work.
Another unique aspect of the diabetic-footwear business is the necessity for distributors, Dillon adds. Because every foot is different, “there are thousands of shoes you have to keep in stock,” and that is not feasible for many small providers. “We carry a sport line, a dress line, a casual line and an indoor/nursing-home line, in an array of styles and colors. We give providers a central point where they can access a variety of shoes instead of going all over the country.”
And, that selection is bound to expand and improve, according to Fox. “Diabetic footwear has been very therapeutic-looking,” he says. “Now manufacturers are trying to make [diabetic shoes] look like normal shoes. That will get more people wearing them.”
Additionally, the materials used for insoles will continue to improve, Dillon and Fox agree. For example, “Atlantic Footcare will introduce a new material — ortholite — with an open-cell, breathable design that takes the shape of the foot, but bounces back.”
Dillon points to a new P-Cell technology from Acor. “It did very well in tests for cushioning, abrasion, odor, shock absorption and durability,” he explains.
The bottom line, Dillon concludes, is that diabetic footwear presents untold opportunities for providers. “This market is just sitting there, waiting to be tapped. You don't have to wait for people to get older. The customers are already there.”
Charles Dillon, president, MMAR Medical Group, Houston; Bob Fox, vice president of sales and marketing, Atlantic Footcare, Providence, R.I.; Jennifer Hahamian, senior vice president of sales and marketing, Metrika, Sunnyvale, Calif.; Tom Panik, vice president of sales and marketing, Home Diagnostics, Fort Lauderdale, Fla.; Mark Samuels, chairman and chief executive officer, SpectRx, Norcross, Ga.; Kevin Seifert, vice president and general manager, Beckton Dickinson Consumer Health Care, Chicago