Roche unveils way to cut diabetes costs

With some people paying as much as $2 a test strip, the new Roche system could cut costs to as little as 20 cents per strip. New blood glucose meter uses sharply discounted test strips

Pharmaceuticals maker Roche overhauled its blood glucose monitoring system and introduced a new discounting offer it says could save uninsured diabetics thousands of dollars per year.

The move could help alleviate political pressure as the drug industry faces mounting scrutiny over prices. It also comes amid increasing competition among blood glucose monitoring makers as diabetes rates rise.

The new system pairs a free blood glucose meter with a smartphone app and discounted test strips. With some diabetics paying as much as $2 a strip for other offerings, the new Roche system paired with a free savings card could cut costs to as little as 40 cents per strip in the first 50count box, then 20 cents per strip in subsequent boxes.

The nation’s 29 million diabetics pay widely varying prices for testing products, in part because many are covered by insurance. Roche’s move is likely to provide the biggest help to the uninsured. The average American with diabetes paid $1,922 in out-of-pocket expenses for care in 2013, compared to $738 for someone without the condition, according to the Health Care Cost Institute.

For “the average patient, managing diabetes and acquiring all of the testing and therapy supplies can be very difficult to navigate, really complex and very often very expensive,” said Brad Moore, head of Roche diabetes care in North America.

Moore said Roche technicians worked on the new Accu-Chek Guide System for at least three years, including a “very significant investment in capital.”

Test strips read by devices to monitor blood glucose data are typically a significant source of profit for the pharmaceutical industry, which is under fire for its contribution to increasing health care costs.

President Trump has threatened to battle drug companies over costs, while many Washington lawmakers have decried health care’s effect on the average American’s budget.

Although industry prices can be more than $2 per strip, manufacturing costs don’t typically top 15 cents, DiabeticInvestor.com analyst David Kliff told Diabetes

Forecast magazine in 2012. Roche had 8.5% market share in the blood glucose monitoring industry, trailing only Johnson & Johnson at 22.5%, according to an October report by market research firm IBISWorld analyst Jonathan DeCarlo.

But competition is increasing as Target, Walmart and other retailers have introduced low-cost, private-label options.

Consequently, the blood glucose monitoring industry’s profit as a percentage of revenue was projected to fall from 10.1% in 2015 to 9.5% in 2016, DeCarlo estimated.

Moore declined to discuss the profitability of Roche’s new test strips, which contain a new chemical makeup.

“We knew that access was a problem. We heard that from our patients,” Moore said. “So the timing was perfect in that we’ve developed a new technology platform that the Accu-Chek Guide System is based on.”

Meanwhile, drug companies are under pressure to shield patients from increasing costs, though they often blame insurers and other health care intermediaries.

With a free savings card available online, through pharmacies and at health care centers, the new Roche monitoring meter is free, the first box of 50 test strips is $19.99 and all additional boxes are $10. That’s cheaper than major competitors at Amazon, Rite Aid, Walgreens, CVS and Walmart — with the exception of the ReliOn Prime option at Walmart, according to data collected by USA TODAY.