How Abbott’s New Continuous Glucose Monitor Can Change The Company

New data released by Abbott on the FreeStyle Libre Continuous Glucose Monitor shows it lowers blood sugar levels across the board by nearly a full percentage point in diabetics.

The data is consistent for all type II patients regardless of age, sex, or how much insulin they take or for how long they’ve been taking it.

The monitor is painless and requires no calibration and lasts 14 days, longest on the market.

This could make insulin use much more efficient in the US, a market in dire need lower insulin prices, which more efficient use can help deliver.

Abbott is relatively weak in the U.S. market, and a relatively reasonable 3.5% market penetration for this glucose monitor can increase Abbott’s top line by 50%.

In the rush to wow the biotech world with ever more expensive and cutting-edge drugs, the importance of drug efficiency can get lost in the mix. Drug prices can only go so high before economics kicks in and price increases can no longer be supported. Nobody knows exactly where that point is, but it is clear that the trend to find bigger, better, more expensive blockbusters cannot last forever.

Within this biotech backdrop, Abbott Laboratories (ABT) is succeeding by making existing drugs better. And the company may have just hit the proverbial gold mine, this one in diabetes management.

Insulin prices specifically in the United States are way out of control and the government is taking notice, to the detriment of the established diabetes players. While getting insulin prices down directly would of course be desirable, the extremely convoluted United States healthcare system and its vested interests get in the way of accomplishing this with any urgency. Another way to attack the problem of high insulin costs then is to help make insulin use more efficient. In other words, help those who already use insulin to better control their blood sugar levels with it. Over time, this cuts insulin waste and helps manage costs without directly influencing the per-unit price. In standard basic economics parlance, bring down insulin demand. [MORE]

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