Feeling the pain when healthcare firm quits
There are nearly 30 million people with diabetes in the United States. About 90,000 of them were just thrown a curveball.
Johnson & Johnson announced that it’s closing its Animas subsidiary and getting out of the insulin-pump business, leaving the field primarily to a single large competitor, Medtronic, which will control roughly 85% of the market.
The challenges faced by tens of thousands of J&J customers mirror problems all too common in the healthcare industry — the turmoil that can arise when a medical-device or drug maker halts sales, or when an insurer decides to no longer cover a specific pill, gadget or treatment.
For patients, this can turn your entire world upside down.
“It’s very frustrating,” said Dana Goldman, director of USC’s Schaeffer Center for Health Policy and Economics. “Patients realize they’re subject to the whims of the market.”
The J&J announcement hit close to home. I’ve been using the company’s pump for a decade, since I was diagnosed with Type 1 diabetes (that’s the hereditary or autoimmune kind, as opposed to Type 2, which is far more widespread and is the form of the disease typically associated with obesity).
Because insulin pumps cost thousands of dollars, represent a multiyear commitment and literally play a life-or-death role in people’s lives, switching manufacturers isn’t a decision you make lightly. And as I’ve discovered, it’s a decision with broader ramifications in today’s interconnected, digital world.
Which pump works with my blood glucose sensor? Which one works with my smartphone? Which one
works with my Pebble smartwatch? What if I want to upgrade to an Apple Watch?
These too are potentially costly and long-term commitments, representing not just healthcare but also technology and lifestyle preferences.
“I have patients forced to change therapies — especially drugs — all the time because of issues like this,” said James Flory, an assistant professor of healthcare policy and research at Cornell University. “Generally, there is not much patients can do except switch to whatever therapy is available and covered.”
That’s why your first stop when an involuntary medical change arises is your insurer. Get in touch right away and make sure you have options. It’s entirely possible that your coverage will limit you to a single alternative, such as a generic drug or a specific medical device maker.
If you do have choices, then it’s time to do your homework. Does the new drug have known side effects? Are users happy with the various devices available?
Start with your doctor or specialist. Ask him or her what he or she knows. I’ve had to switch insulins more than once for no better reason than because my insurer got a more profitable deal for itself from a single maker.
Online forums such as Reddit can be very helpful in getting a sense of the experiences of others. Obviously you’ll want to take such anecdotal evidence with a grain of salt, but it’s interesting to hear what people say.
In my case, J&J said its “partner of choice” is Medtronic, which means it’s steering its 90,000 customers to the industry leader.
Medtronic, the world’s largest stand-alone medical device maker, acquired its Northridge-based MiniMed pump business in 2001 from Los Angeles entrepreneur Alfred Mann for nearly $3.3 billion.
“Our number one priority is ensuring patients have a seamless experience as they transition to Medtronic,” Valerie Asbury, general manager of Animas, said in a statement.
Easier said than done. Medtronic wants customers in a closed system where it produces the pump, the glucose meter and the sensor that reads your blood sugar. Once they have you, theoretically they can charge whatever they want.
Michael Hill, Medtronic’s vice president of global marketing, told me the company has no intention of gouging patients. Nor could it, he insisted.
“Let’s say we were going to charge $50,000 for a pump,” Hill said. “The insurance companies simply wouldn’t pay it.
“Yes, there’s less choice today than there was a week ago,” he added. “But in no way can you say that Medtronic is dictating or controlling the terms of people’s healthcare.”
OK. But the company has only two competitors left — smaller pump makers Tandem Diabetes Care and Insulet. Pharmaceutical giant Roche exited the business this year.
Industry watchers say it’s entirely likely Tandem will be the next to fall.
The company’s stock plunged 36% on Friday after Tandem announced a 1for-10 reverse stock split intended to bolster its sagging share price, which is down about 90% this year. Tandem’s stock tumbled a further 14% on Monday.
“They’re running out of money,” said David Kliff, who publishes an influential newsletter called Diabetic Investor. “If something doesn’t change soon, the market will be down to just two companies.”
And that raises questions about Insulet’s longevity in trying to compete with the much larger Medtronic, which by then would account for at least 90% of sales.
The bottom line is that for all the talk among lawmakers of people taking more personal responsibility for their healthcare, in reality there are precious few real choices.
More often than not, patient needs come a distant second to corporate interests, and we’re left feeling lucky we have any care at all.
It seems inevitable I’ll be switching to Medtronic after the warranty on my J&J pump expires in coming weeks, and maybe that’ll work out just fine.
“We’ve been in this business for decades,” Medtronic’s Hill told me. “We’re committed to staying in this business.”
That’s something.