Abbott and Dexcom, market leaders for continuous glucose monitors, are focusing on insurance coverage and pricing ahead of a planned Medicare expansion.
The Centers for Medicare and Medicaid Services is expected to broaden coverage of the devices for people with Type 2 diabetes who don’t take insulin, a decision that would benefit both companies. Dexcom CEO Jake Leach expects the CMS to announce a decision before the end of the year, he said in a Thursday earnings call.
In June, Dexcom shared results of a study of its glucose sensors that found people with Type 2 diabetes who don’t take insulin benefited from wearing the devices compared with the standard of care. The results were published in the New England Journal of Medicine last month.
Leach said Dexcom has shared the publication with medical directors evaluating the submission for Medicare coverage expansion, and also hopes to see the evidence included in the American Diabetes Association’s upcoming standards of care.
Abbott sees slowdown ahead of new coverage
Abbott’s diabetes business slowed in the third quarter, which CEO Robert Ford attributed to a lack of recent reimbursement expansions and pricing pressures outside of the U.S.
The company cut its sales growth forecast for the year due to slower than expected growth in its diabetes and electrophysiology businesses.
It’s been harder to reach people with Type 2 diabetes without a reimbursement expansion, Ford said. After the CMS decision, Abbott expects “strong reimbursement growth.”
Abbott is also facing more competition in international markets, where it typically has a majority market share in major countries where it has a presence. As a result, the company has made some pricing adjustments, Ford said.
When asked if Dexcom is facing the same pricing challenges, CFO Jereme Sylvain said the company has not seen pricing degrade and that reimbursement is stable. While the company does not overlap with Abbott in all the same markets, Sylvain said Dexcom’s products are priced right and taking share.
Formulary change
One pharmacy benefit manager’s formulary change could benefit Abbott next year. For some customers under CVS Caremark and Aetna Commercial, those formulary designs are switching from Dexcom exclusive coverage to Abbott exclusive coverage in 2027.
Abbott CEO Ford mentioned the coverage change, saying the company has “a pretty significant payer formulary coverage that flipped in our favor.”
Dexcom CFO Sylvain said the PBM accounts for less than 4% of Dexcom’s revenue. CEO Leach added that for some patients, who have lost coverage through a formulary, they still may be able to access Dexcom’s products through their durable medical equipment benefit.
Leach said that Dexcom typically prefers coverage where Dexcom has equal access to its competitors, as their products aren’t always comparable. For example, a child with Type 1 diabetes might not be able to use a competitor’s sensor with their insulin pump under the coverage change.
