Six months ago now, NICE launched the updated NG17 guidelines for adults with type 1 diabetes that contained the details of CGM for all users.
Over the course of the next six months, multiple vendors launched cut price CGM systems that were acceptable to the NHS Business Services Authority and wound their way onto the prescription tariff.
Up until this point, Abbott’s Freestyle Libre system had had a monopoly on the central payer market in the UK, as the only option that a GP could provide directly, on prescription.
This has now all changed. But what are the effects?
Given the rate of change of local healthcare pathways and approvals, nothing appeared to happen immediately, however, with the help of the Diabetes Technology Network, various groups in various parts of the country have provided the local pathways that enable all the new devices to be accessed. The pace is different in different parts of England, but it’s happening.
But what does that mean for users and vendors?
For users it means choice.
For vendors, it means either competition or opportunity, dependent on your starting point.
Where there’s competition, there’s often change, and what we’re going to discuss here is the effects of a cheap Dexcom on the Freestyle Libre2, and whether, with a small change to the phone app and reader, Abbott might make the Libre2 a realtime CGM instead of a flash CGM. It wouldn’t take very much….
So let’s have a dig into it.
Using data from OpenPrescribing.net, we can establish that in August 2022, roughly 160,000 items of Freestyle Libre and Libre2 combined were prescribed in England. At the prescription tariff price, that’s £5,600,000 revenue per month (£67.2million annually). Crucially, it’s relatively easy revenue to collect.
For those who are not the incumbent solution, it s a reasonable sized number to want to obtain a relatively easy slice of. Why wouldn’t you have a go? And if you’re widely regarded as the most accurate sensor on the market, you’d certainly think you had a great opportunity to gain significant market share.
And of course there is also the clamour of potential users who might be interested in obtaining the alternative system.
Overall then, as a new entry into the Prescription market, there’s a decent opportunity and, once the NHS structural issues are overcome, an easy annuit-like revenue stream that could continue on.
As Abbott, who’ve had the monopoly on interstitial glucose sensing within the NHS prescription model since 2017, will be well aware, the NG17 update presents a significant threat to their revenue stream.
We’ve already mentioned that this is currently a £67mn per year market, and a significant proportion of that is at risk as people request realtime CGM instead of flash.
Outside the UK, you’d expect a similar pattern to be playing out. Dexcom’s One eating into Libre2’s market share and revenues.
Back in 2018, the #WeAreNotWaiting community guessed and then proved that the Libre2 is a real time CGM in all but application function. It reads data every minute and transmits it to the app, so that the app can offer realtime alerts. By accessing this data, it’s possible, with the use of an alternative app, to make this data available realtime.
So what might you do if you’re Abbott? How about try and flatten the competition?
If you have the “muscle memory” of the Prescription writers, why not enable real time data readings in the Libre2 app, selectable with a switch by the user?
It would be a minor update that could easily be pushed out. It’s likely to be an update to your app as part of a regular cycle. By making it an option, the user chooses whether they have flash or realtime, which would be appreciated by many. We shouldn’t forget that the Libre Sense product already provided this capability for athletic performance monitoring…
And more importantly, it keeps you in line with all the other low cost offerings that are now available, and keeps your client base, who already know the system, engaged with you.
What might be required from a regulatory standpoint? I expect that answer is “not a lot”. Modifying the app to show transmitted data that is already being used for alerts and scans isn’t going to be a huge change and may just be an update.
But what of the Libre3? Under the UK model, it is more expensive and sits on the individual funding tree, along with Dexcom G6 and G7, so will not be as easily available. It also, apparently, has greater accuracy than the Libre2.
Might Abbott reprice that into the Libre2 space? I suspect not. It’s effectively their premium offering, and is likely to be their AID integration platform. While it’s being distributed in some countries in Europe, it’s definitely not as widely available as Libre2.
So what do we take from all of this?
Without seeing the prescription data in England, it’s hard to assess the impact of the One on Libre2’s dominant position, but given the online noise, I expect there to be an impact over the next few months.
If I was Abbott, I’d be seriously considering this approach. Everything is in place, the competition is rife, and thanks to the WeAreNotWaiting community, they have plenty of evidence that it works as a realtime CGM.
So when is it likely to happen? That’s the 72 million dollar question…