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.
The opportunity…
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.
The threat/competition
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…
Interesting thoughts. Clinically, I work in an interesting area geographically; one foot in an ICS which has rolled-out the NG17 guidance and made Dexcom One available on prescription and G6/G7 available where needed, the other foot in an ICS which has not(yet).
There has been an increase in people requesting Dexcom devices and I think the challenge you describe for Abbott is real. Frankly why would you want Libre2 as is, if you can have real-time CGM?
Libre 3 is still not widely available supply wise – at least that is my understanding- and given its lack of (current) integration with devices it’s not really a consideration; but as we all know that is changing.
Abbott could mitigate strongly against Dexcom by freeing the Libre 2 app to real-time, what they gain would also be a gain for those who would value a real-time solution. Interesting times.
Abbott has stated that the Libre 2 was to be priced at the same price as the Libre 1 and this turned out to be true globally. Abbott also stated before launch of the Libre 3, and continues to say that the Libre 3 will be priced at the same level as the Libre 2. So far in the 10 countries where Libre 3 is available, Abbott has kept the price the same – just as they announced they would.
Abbott also announced that the Libre 2 will be withdrawn from sale faster than the Libre 1 was in most markets too.
check out the conference calls
Abbott has kept the consumer price the same, however, it’s the price to healthcare provision that matters in many cases.
I’m sure there are multiple markets where that price is significantly lower than the consumer price, and in that context, given the CEO comments about needing much higher volume to lower the cost base of Libre3, how might you retain Libre usage in the face of competition at a price point that is much less profitable, or may even be negative for Libre3?
This approach would seem like a quick win, given the already available real time streaming for Libre Sense.
The Libre 3 is considerably cheaper to manufacture and ship than the Libre 2. Discounting the Libre 2 wouldn’t make Abbott any more money.
Libre 2 will be unavailable in Germany after December, with other Libre 3 countries to follow after that.
Thanks for this. I have L2 on prescription and briefly self funded Dex G6. For my use case – MDI, connection to third party services for watch etc using a third party app I think L2 remains as is a great option. I get all my connections and all my data (via scanning) in the official app for the hospital team to stay happy. Presumably if Abbot made it a CGM there is a high probability the third party connections wouldn’t be there (like Dex One)?
L3 with data sharing please, until then I’m happy as is (but appreciate more choice for all is great too).
Abbott stated last week they have parity pricing across all Libres to health agencies, and they need to get everyone over to Libre 3 to save money.
There is a single global price for Libre sensors for all countries that is essentially the same bar small buffers to allow for for currency fluctuations. They announced this strategy very early on.
“Yes, Libre 3 pricing, Libre 2 pricing, Libre 1 pricing, it’s practically all the same, Josh. And the more volume we can get on to Libre 3, the more we can kind of lower those COGS. But we have a parity pricing right now.”
– Robert Ford — Chairman and Chief Executive Officer of Abbott
As an aside, Abbott is now claiming tha Libre 4 is best for pumps because it detects occlusion or other insulin delivery faults before glucose levels go high. The clinical work for iCGM approval for Libre 3 & Vitamin C has been completed, but hasn’t been submitted to the FDA yet. Libre 2 and 3 are already approved for pumps in Europe already.
Your last point there is quite interesting. I’m not sure how a glucose sensor would detect occlusions or insulin delivery faults, without seeing a change in glucose levels, nor have I seen anything relating to Libre 4, unless this is in house parlance for a combined ketone and glucose sensor that has been discussed in the press…
It’s also not clear to me why they wouldn’t offer the Libre3 in the UK if the point about single global price is valid. Certainly the investor call mentioned pricing parity but didn’t call out healthcare agencies specifically.
Having said all of this, does withdrawal of flash monitoring and replacing it with CGM only really make sense? There are significant numbers of users for whom rtCGM isn’t what they want, and giving no option of checking levels when you want to, rather than being told what they are all the time suggests that the uptake of sensor technologies might not be as large. We regularly hear from groupsmof users and healthcare professionals that not everyone wants full availability CGM.
In my country, the decision to subsidise is done by a different body to the medical device approval body, and the process is much slower – and can only be submitted after the device has already been approved. So it takes about 6 months after local approval to appear .
Re the Libre 4 – I would have thought glucose levels would rise long before ketones, but apparently that’s what they are saying. Robert Ford CEO Abbott said last week:
“But we also believe that — we also believe that there is potential to innovate even further in that pump integration, right? And we talked about this last call. We announced this at the ADA in June which is the creation of a dual analyze sensor, a glucose ketone sensor. Everybody — all the capabilities that I’ve spoken to that you’re — I guess you’re referring to believe that this would be the go-to sensor for pump integration because the ketone functionality provides the added safety feature that would be required, right? So if there’s some sort of interruption in insulin delivery from the pump, what is understood clinically is that the ketone levels will rise earlier than the glucose levels and to be able to have that ketone level, that continuous ketone level measurement is an added safety feature for that pump environment. And I think it does provide, I guess, a step ahead in terms of innovation, in terms of pump integration.”
That’s going to be an interesting one to calibrate. For most people, ketones rise with starvation, even in the presence of insulin, as our bodies flip energy source, so you see some of that happening overnight.
It’s going to require that to be managed quite carefully!
Regarding subsidisation, the UK process requires that clinical guidelines be updated before any subsidisation can broadly take place. Once that’s agreed, then there’s a requirement for a manufacturer with an approved device to meet a set of criteria to be added to the list of paid for items. Even then, local funding bodies still have to agree to pay. It’s not straightforward.
I saw something on the interweb about Abbott wanting to come up with a product that measures keytones and glucose.
And that’s great.
But Abbott need to be much more nimble, or Dexcom will have poached their customers with products that do 80% of what they want and aren’t that fussed about the remaining 20%
Igor, thank you for this.
My consultant was speculating with me recently that the NHS was (probably) paying significantly more for the Libre 3 than the Libre 1 or Libre 2, hence why it is on the same list as pumps, etc.
I do hope the NHS didn’t make a bad deal with Abbott!
I understand Abbott still need to resolve (hopefully soonish) the issue (which Dexcom sensors don’t have apparently) that users taking more than 500mg of vitamin C daily may have their sensor readings skewed, which makes the Libre 3 (and Libre 1 and Libre 2) unsuitable at present to talk to an AIDs/closed loops/pumps, etc.
Is there really going to be a Freestyle Libre 4? Are we going to have to wait a further two years for it to be available in the UK? And when it does arrive in the UK is it going to be available to almost no one like the Libre 3 is now?
I agree with Admin that for those that want it, flashcgm should be available. As much choice as possible is key.
Me? I’m ready for real time cgm, preferably now delivered in a sophisticated, unobtrusive 21st century way (smartwatches, etc) so that I no longer have to announce to the entire world I have diabetes.
I like the Libre 2. It works for me. It’s fairly accurate compared to fingersticks and having to use just two sensors each month (as opposed to three with Dexcom One) is a real bonus.
The other thing that keeps me from switching to Dexcom One – apart from the limited wear time – is the significant extra packaging and product waste (its a nightmare at the best of times disposing of medical waste where I live) and having to replace the Dex One’s transmitter every three months.
I simply don’t want to be dealing with that much extra faff.
The Libre 2 keeps it simple for me.
When the Libre Sense first came out for athletes, I for one felt cheated by Abbott that the Libre 2 wasn’t a straight-out-the-box real time CGM.I wonder how popular Libre Sense is within the elite sports community.
I’m pleased Dexcom have released the Dexcom One. Abbott is an uber slow, lumbering giant. I know they do far more than glucose monitoring products but they need a huge competitive kick up the backside in the glucose monitoring space.
They need to give diehard Freestylers – now – proper real time cgm on prescription, and the ability to get data, graphs, trend arrows, etc on most popular commercially available smartwatches without having to download non-Abbott authorised apps and devices, which I always find are a bugger to set up, never work perfectly even 50% of the time for me and eventually always seem to conflict with using the Libre app.
Because if I’m forced to move to the Dexcom I won’t come back to the Libre.
Extremely well done Sir for your earlier prediction that Abbott would convert the Libre 2 into a real time CGM following competition in the UK from Dexcom’s Dexcom One.
It will be fascinating to see whether Abbott redesign the Libre 2 so that it becomes a smaller “one-piece” product (rather than the current two-piece that we have to put together before applying) and reduces the plastic and packaging waste.
It also appears that Insulet, makers of the Omnipod family of insulin pumps, are conducting clinical trials in Belgium, France and the UK to integrate the Libre 2 as part of a hybrid closed loop system with their new Omnipod 5 pump.
So, where does this leave the much underused Libre 3 in the UK?
I also wonder how the ongoing patent litigation between Abbott and Dexcom in the UK, USA and Germany concerning the technology in their respective glucose sensing products might affect what becomes available finally in the UK (am aware that German users of the Libre 2 were moved to the Libre 3 in significant part because of the litigation in Germany between Dexcom and Abbott).