Like a hole in the head
Not like things aren’t bad enough for Medtronic and their struggling insulin pump franchise but the hits just keep on coming. We have long maintained that once the company loses their formulary advantage it’s not game over but pretty damn close. The fat lady isn’t singing but she’s warming up and getting ready to sing now that UnitedHealthcare has agreed to cover Tandem pumps. Per an 8-K issued by Tandem-
“The Company stated that today UnitedHealthcare issued a network bulletin that includes Tandem Diabetes Care, Inc. as a network provider, effective July 1, 2020.”
When asked why no press release was issued for what is a very significant event Tandem noted that United’s policy does not allow for releases. Even so the news became known on the street as some analysts got wind of it which helps explain the 12%+ plus move in Tandem shares yesterday. The Abbott news just threw additional fuel on an already raging fire.
The real question is what does Medtronic do now. They no longer have the coolest toy in the toy chest. They continue to believe that patients want to calibrate their CGM sensor and now they are losing the most valuable piece of real estate they used to own. Other than that Mrs. Lincoln how was the play?
Seriously we almost feel sorry this crumbling empire, almost. The fact is this is exactly what happens when you combine arrogance with hubris. What happens when you stray from your core mission and begin to believe you are immune from market forces. Think about this for just a moment it wasn’t that long ago Medtronic held a commanding market presence and had the coolest toy in the toy chest.
Today Tandem has the coolest toy in the toy chest, Insulet will soon have a cool new toy and the two of them are happily chipping away at Medtronic’s large installed user base converting Medtronic patients to their systems. This decision will only accelerate conversions as patients unhappy with the 670G or those who were thinking of converting to the 670G now have a wider range of options.
Now we have to take a moment to thank the West Coast Mafia and the JDRF for being right once again when they said the exclusive deal between Medtronic and United would limit choice and stifle innovation. Let’s see since this deal was signed we have newer better systems from Tandem and Insulet, so obviously innovation was seriously stifled. Tandem and Insulet are growing nicely so yep patient choice wasn’t exactly limited was it. Seriously we truly wish the mafia and JDRF would stick with items they know something about and stay the hell away from the business of diabetes something they know nothing about.
No we do not feel sorry for Medtronic as we have seen this coming for some time. While we would not say this is poetic justice given the way they have acted, lets just say you reap what you sow.