Unless you’ve spent the last 10 years on a remote island with no news or Internet access, you know that rising health care costs are one of the major burdens facing all of us. The continued assault on our wallets by medical care and insurance costs includes higher insurance plan fees, higher deductibles, and increased co-pays for all kinds of services and products. This triple-whammy of increased costs hasn’t spared durable medical equipment or DME, a health care industry acronym for items ranging from wheelchairs to walkers to insulin pumps. Co-pays for a pump today can be as much as 50 percent of its cost, or $3,000 to $3,500 for several major brands. A number of plans also impose annual maximum limits on DME expenses.
This doesn’t seem like the ideal environment in which to launch a new DME company, but entrepreneurs and venture capitalists apparently think the time is right. Professional investors looking for double- and triple-digit returns on invested capital have backed diabetes technology companies including DexCom, Tandem Diabetes (t:slim), and Insulet (OmniPod). Now, we can add to the list a new pump, and another bet on diabetes technology’s future: the Asante Snap (www.snappump.com).
The Price is Right
Oddly enough, Asante, based in Sunnyvale, California, received FDA clearance to market its new pump — then called the Pearl — almost two years ago. But, rather than rush to market, the company spent months refining the product. In the process, Asante changed its name to Snap, primarily to reinforce how easy it is to use.
Snap is a feature-rich pump long on convenience but short on price. With an estimated insurance allowable of $700, it costs about the same as an OmniPod starter kit. Asante is betting that the initial price will attract pump brand switchers, which isn’t a bad strategy, since the overall market for pump sales seems to be tilting right now to switchers over new adopters. As is the case with OmniPod, Snap’s required additional supplies of insulin cartridges and batteries will eventually cost as much or more than the Snap “brain.” Also like OmniPod, Snap’s modest initial purchase price makes the new pump seem more affordable.
A Disposable Advantage
Those who take the relatively inexpensive initial plunge and switch to Snap will find a couple of pleasant surprises. One is the combination of a pre-filled glass insulin cartridge (currently only Lilly’s Humalog) that also holds the pump’s main battery. Snap has three components — a controller that houses the pump’s “brain” a disposable body that contains the pre-filled insulin cartridge plus the main battery, and an infusion set. Unless your insulin use exceeds 300 units in a week, the pump body, tubing, and insulin cartridge need to be changed only once every seven days, versus two to three changes per week for pumps produced by Snap’s competitors. However, the cannula site should still be changed every three days.
Another feature that Snap offers is auto-priming, which dramatically reduces the need to remove air bubbles from the tubing. There is also an occlusion monitoring feature that uses an optical sensor, rather than a system relying on pressure from a reservior, to monitor insulin’s uniform distribution in the fluid pathway. The text size used in the displays is the largest in the industry, a bonus for vision-challenged diabetics. Snap has the features of other standard pumps, like an “insulin on board” reading and a bolus wizard. It is the first new pump to be designed and tested under the FDA’a more stringent guidelines. (Since then, t:slim has gone through the drill too). An example of FDA-mandated caution is that the Smart Bolus feature cannot be used to calculate and deliver a bolus if your glucose reading is 70 or lower.
Two additional safety features, added after FDA clearance, but before Snap’s launch, are a water ingress detector and alarm and a drop damage detector. The water feature is vital because water inside a pump can wreak havoc on insulin dosing. Potential effects include the pump shutting down, which could lead to hyperglycemia; or infusing the pump’s entire insulin supply at once, which would cause severe hypoglycemia. All pumps are water-resistant when new, but if the pump is dropped or if a crack develops in it over time, it is still possible for water to enter the pump. Snap claims to be the only pump on the market with an alarm that immediately detects water’s presence, before any harm to the user can occur.
After wearing a Snap for almost a month, one of its beta testers, who had been on and returned to another pump brand, commented that even a few weeks without battery changes and reservoir filling made going back to his old pump seemed like a lot of work.
Any wearable device that is frequently put on and taken off can be dropped, perhaps many times over its lifetime. While the FDA mandates alerts about a three-foot drop onto concrete, Snap’s drop detector will alert the wearer about drops from any height that may harm the pump. The recommended response to such an alarm entails changing the pump body and its insulin cartridge. Any inconvenience that this entails is preferable to the risk of relying on a damaged device.
Asante formally launched Snap in early April. Initially, sales and support will be available only in the northeast as Asante defines it, including four territories: Washington, D.C., and Maryland; Philadelphia and New Jersey; Western Pennsylvania; and Connecticut, Massachusetts, New Hampshire, and Vermont. Potential customers from other states, including New York, will be asked to wait. The incremental approach is simply a carryover from the pump’s overall business plan, rooted in meeting the needs of a small group of customers before taking on the challenges of a larger base. The strategy is similar to Tandem’s measured roll-out of t:slim.
Will “Easy Does It” Do It?
Asante positions Snap as a convenient, easy way to pump, stressing the time-saving features like the pre-filled insulin cartridge and no more battery changes. After wearing a Snap for almost a month, one of its beta testers, who had been on and returned to another pump brand, commented that even a few weeks without battery changes and reservoir filling made going back to his old pump seemed like a lot of work.
The company also offers a no-risk 30-day trial and a lifetime upgrade guarantee of $99 for the newest, latest version of the product. “People want current products — not the older generations that aren’t made anymore, so that’s what we want to give them,” said Ken El-Sherif, Asante’s marketing chief. “Our customers can pay that $99 upgrade fee anytime, as often as they might want to, so they can always have the latest Snap technology.”
What’s missing? Being limited to Lilly’s Humalog could be a problem for some. El-Sherif says that discussions with Novo Nordisk for a pre-filled 300-unit Novolog cartridge are well underway. Sales and support for only one region, the Northeast for now, may be a drawback for others. It takes a long time to build a national sales and service network. Other DME companies, including Dexcom, Tandem, and Insulet, have followed a similar path.
As shown by the fact that it was in no hurry to rush the Pearl to market, however, Asante seems to have the resources to play a “slow but steady wins the race” game. Their patience may prove a blessing in a pump market that’s become much more competitive in the span of less than a year. Now, if someone could just figure out a way to attract more new customers to pumping in general, the competition might not be a zero-sum affair.
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