Diabetes is a significant threat to global health, being one of the top 10 causes of death in the world, with over four million people estimated to have died from diabetes-related causes in 2019. People living with diabetes are at risk of developing a number of serious complications, and diabetes can also be a significant financial burden.
In 2019, it was estimated that there were 463 million adults with diabetes (both type 1 and type 2), up from 151 million in 2000. It is estimated that this will rise to 700 million by 2045, representing almost 11% of the total adult population.
Diabetes is a condition where a person cannot produce enough insulin, or the cells in the body cannot process the insulin that is produced. Insulin breaks down sugar in the body, so without it, a person can become hyperglycaemic (too much sugar in the body). Insulin deficit, if left unchecked over the long term, can cause damage to many of the body’s organs, leading to disabling and life-threatening health complications. However, if appropriate management of diabetes is achieved, these serious complications can be delayed or prevented altogether.
There are two main types of diabetes. Type 1 (formerly called insulin-dependent or childhood-onset diabetes) is characterised by deficient insulin production and requires daily administration of insulin. Neither the cause of type 1 diabetes nor how to prevent it are known. Roughly 10% of people with diabetes have type 1.
Type 2 (formerly called non-insulin-dependent, or adult-onset) results from the body’s ineffective use of insulin. The cause of type 2 diabetes has been linked to a person’s lifestyle and health, with excess body weight, poor diet and lack of physical activity seen as key contributing factors. Around 90% of diabetes worldwide is type 2. For people with type 2 diabetes, the condition can generally be managed with diet, exercise and medication, although some will eventually require insulin. Around 90% of diabetes patients globally have type 2.
Type 1 diabetes is an especially complicated disease, requiring multiple decisions be made each day regarding what is eaten, when, and how much insulin to take. This is further complicated by other factors affecting blood sugar, such as exercise. It is also a very personal disease, whereby the patient must be in control of their own treatment and little, if any, of the day-to-day management can be outsourced. As such, information in the hands of patient is incredibly important.
Historically, to get this information, people with type 1 diabetes had to take several blood sugar readings throughout the day using fingersticks (known as self-monitoring blood glucose, or SMBG). SMBG requires a drop of blood on a paper strip to be inserted into a blood glucose monitor to get a current blood sugar reading. The patient can then use this information to decide the next steps in terms of diet and insulin dosing. Whilst SMBG is relatively cheap and easy to use, it has several drawbacks, including that it is time-consuming and only gives a single snapshot in time, with no trend data or predictive ability. In addition, pricking your finger and drawing a drop of blood several times a day is not particularly pleasant, especially for younger patients.
In recent years, however, a much more user-friendly form of monitoring has proliferated: constant glucose monitors (CGM). A CGM is comprised of a patch-like sensor that is worn on the skin (typically the back of the upper arm) alongside a reader that can be scanned over the sensor for an instant blood sugar reading.
The benefit of CGM for the patient is clear. By constantly tracking blood sugar levels a patient is better able to keep their blood sugar within a safe range, avoiding dangerous highs and lows. This can reduce both long-term health complications as well as short-term hospitalisations from either too-high or too-low blood sugar.
Despite the higher upfront costs, studies show that using a CGM can be cheaper overall, when compared with the recommended number of daily fingersticks (the average person uses fingersticks less than is recommended, due to cost and convenience). In addition, CGMs have been shown to significantly reduce the long-term costs of diabetes – by helping someone to better manage their condition, this can reduce long-term complications and costly hospitalisations. This drives clear benefits for patients as well as payers, with governments and health insurers increasingly covering the cost of CGMs for type 1 patients, helping to drive significant growth in CGM adoption.
It is worth noting that whilst CGMs are mainly used by people with type 1 diabetes today, there remains a huge opportunity in the type 2 population. For these patients, having a CGM can be incredibly useful in managing their condition, helping a patient to understand the effects of diet and exercise on blood sugar levels. Again, this can reduce health complications further down the line, a positive for both patient and payer.
Given these dynamics, 2019 saw significant growth in CGM adoption. However, adoption is still low, with estimates of 25%-30% penetration for type 1 and insulin-dependent type 2 patients in the US, with adoption outside the US significantly below these levels.
Abbott Laboratories, the global healthcare company, launched its leading CGM, Freestyle Libre, in 2014, with the US launch in 2017. Since then, Abbott has grown to be the number one player in the market in terms of volumes and sales, with the company stating it has over two million users of the product at the start of 2020. The Freestyle Libre combines accuracy, ease of use and affordability (with daily use costing roughly half that of the other main player, Dexcom). This strategy has helped Abbott to grow the overall market whilst taking over 30% market share.
Abbott recently gained approval in the US for its second-generation device, Freestyle Libre 2, which has more features (similar to Dexcom’s premium product) but still comes in at the same price as the first version. As a sign of the enormous potential in the CGM market, Abbott has announced plans to increase manufacturing capacity by three to five times “over the next several years”.
Estimates are for the overall CGM market to reach over $10bn in 2027.Given the growing penetration of CGM in the type 1 population, rising incidence of diabetes globally, and the wider opportunity in the as-yet-addressed type 2 population, we believe the market can sustain double-digit rates for the next decade or more, with Abbott continuing to gain share over this time.
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