Abbott's "Freestyle Libre 3 Plus" May Push U.S. CGM Prices Down Further

In recent years, I have been underwhelmed with the American Diabetes Association's Scientific Sessions. This year's event was known officially as the ADA 84th Scientific Sessions and was held at the Orange County Convention Center in Orlando, Florida from June 21–24, 2024. But this year, like several of these events from preceding years, there has been less-and-less news which is fundamentally new at all; instead the research and the product announcements have typically already been known for quite some time. Product launches have been in publicly-held companies' investor releases for years. Most of what they are calling news is tired old repeats and more validation studies which don't address much which is fundamentally new research. But occasionally we learn unexpected new things.

Flying somewhat under the radar last month at the 84th Annual ADA Scientific Sessions was news from Abbott Laboratories that the company is planning to introduce a new "Freestyle Libre 3 Plus" sensor (see more on the news at https://hitconsultant.net/2024/06/27/abbott-unveils-freestyle-libre-3-plus/ for more). The "Freestyle Libre 3 Plus" (like the Freestyle Libre 3) is cleared by the FDA for compatibility with automated insulin delivery (AID) systems. While Libre currently lacks U.S. pump partners, several pump manufacturers operating in the U.S. including Insulet Omnipod and Tandem's pumps are officially "CGM platform neutral") meaning neither has an exclusive partnership with Dexcom.

Beyond Insulet and Tandem, Abbott Freestyle Libre 3, and I presume the newer "Freestyle Libre 3 Plus", is compatible with the mylife Loop AID system from Ypsomed and CamDiab Automated Insulin Delivery (AID) system sold in European countries including Germany, although it does not currently have a U.S. pump partner. Ypsomed has attained U.S. FDA clearance for the mylife Loop pump system. Originally, Ypsomed had signed a deal with Eli Lilly & Company, then in December 2022, Lilly backed out of the partnership, leaving Ypsomed without an established U.S. partner. The mylife Loop system was covered in Drug Delivery Business News https://www.drugdeliverybusiness.com/abbott-freestyle-libre-3-automated-insulin-delivery/ on December 21, 2022. 

At present, neither Insulet nor Tandem have any pumps sold in the U.S. which are calibrated to work with Libre 3 because Dexcom pays the big PBMs legally-exempted rebate kickbacks for "formulary exclusion" of all competing CGMs (including most notably) Abbott Freestyle Libre. Nevertheless, these pump companies also sell their products in Europe where Abbott CGMs dominate the local CGM market share landscape, which means they could easily sell their AID systems compatible with Libre and it would be a fairly routine matter to do so.

Justin Eastzer, Host & Founder of Diabetech YouTube and podcast covered the "Freestyle Libre 3 Plus" as the first item he covered in his ADA Scientific Sessions highlights. Catch his coverage podcast at https://www.diabetechpodcast.com/e/future-of-diabetes-tech-takeaways-from-ada-2024/ or on his YouTube channel at https://youtu.be/FTjeMorMY30?si=9X0SbDEfZ7li4jqE. I kind of stole the image in this post from him. 

One of the more important things which differentiates Abbott Freestyle Libre CGMs in the U.S. is the lower cost. According to the Costco Member Prescription Program https://www.costco.com/cmpp, the retail price differences between Abbott and Dexcom sensors are negligible. For example, Costco Pharmacy's prices for CGM sensors are as follows:

• Dexcom G6 price for each sensor is $67.09 (note: Dexcom only sells boxes of three G6 sensors, which must be divided to derive a per-sensor cost)
• Abbott Freestyle Libre 2 price for each sensor is $63.66
• Abbott Freestyle Libre 3 price for each sensor is $63.66
• Dexcom G7 price for each sensor is $59.02

That means all sensors range in price from $59.02 to $67.09, or at most $8.07 difference for the older Dexcom G6 model which is being phased-out anyway. But that's merely the cash price for these CGM sensors. The true cost must be divided by the number of days which each sensor can actually be worn. Longer wear-time means the cost/day of usage is lower unless a patient's insurance subsidizes the cost with partial coverage. Still, using this methodology, below are the costs per day of usage for each CGM sensor model/brand when purchased from Costco Pharmacy:

• Dexcom G6 cost per day of usage is $6.70
• Dexcom G7 cost per day of usage is $5.90
• Abbott Freestyle Libre 2/3 cost per day of usage is $4.55

Clearly, with its 14-day wear-time compared to Dexcom's 10-day wear-time means that Abbott Freestyle Libre sensors are less costly on a cost per day basis. With 15-day wear-time for Abbott Freestyle Libre Plus (assuming the cost is the same as the regular Libre 3 model), the cost per day of usage would be $4.24/day of wear, daily savings of an additional $0.30. Insurance company PBMs have inserted themselves into the cost-benefit equation. United Healthcare's OptumRx and Aetna/CVS Caremark both collect legally-exempted rebate kickbacks from Dexcom to keep Abbott Freestyle Libre "off-formulary". In order to keep the kickback cash flowing to the PBMs, both of them now cover about 37% of the cost of Dexcom sensors even prior to satisfying any deductible. They aren't covering it because they are benevolent or because Dexcom persuaded them to do so; it's all about the PBM kickbacks. 

Only CGM manufacturers now offer coupons enabling patients to bypass their insurance company's Pharmacy Benefit Manager to buy CGMs, and in more than a few cases, it makes financial sense for them to do the math and make economic choices based upon THEIR out-of-pocket costs. The myth is that paying artificially-inflated prices will contribute meaningfully towards satisfying a deductible, but insurance companies never disclose to covered individuals that the amount being applied towards deductibles for all pharmacy purchases amounts to pennies on the dollar being spent.

Dexcom's manufacturer coupon enables patients to save $200 per 30-day supply of sensors (and an additional $200 on each 3-month transmitter on the G6 model). Their coupon can be downloaded at https://dexcompdf.s3.us-west-2.amazonaws.com/g7-g6-cash-pay-tearpad.pdf.

Abbott was later to the cash-pay coupon, but as I covered in December at https://blog.sstrumello.com/2023/12/abbott-gets-real-about-formulary.html, if you're commercially insured and asked to pay more than $75 for two Freestyle Libre 3 sensors, the company says to call Abbott customer care at 1-855-632-8658 (M-F from 8-8 ET) to ask them for an eSavings voucher. Abbott manufacturer vouchers expire at the end of each calendar year and patients must call each January to request a new voucher for the new year. For more general info, visit https://www.freestyle.abbott/us-en/private-insurance.html.

But here's what makes the new "Freestyle Libre 3 Plus" different: "Freestyle Libre 3 Plus" will offer a wear-time of 15 days vs. only 14 days on Libre 3. Assuming the sensors cost the same amount as Freestyle Libre 3 (right now, the Libre 2 and Libre 3 cost the same), that means the extra day will translate into even more patient cost-savings. Whether the adhesive on the sensor lasts 15 days is a very big unknown. Some patients find using adhesives like Skin Tac solves that problem.

Another big unknown will be what the impact might be once the Federal Trade Commission (FTC) sues the big Pharmacy Benefit Managers (PBMs) over their anticompetitive business practices. We know FTC intends to sue (see the Politico coverage at https://www.politico.com/news/2024/07/10/ftc-pharmacy-insulin-drug-00167342 for more). Its Interim Report from its 6(b) study on PBM business practices (see HERE for the news release, and https://www.ftc.gov/system/files/ftc_gov/pdf/pharmacy-benefit-managers-staff-report.pdf for the Interim Report itself). In theory, this litigation might result in PBM kickbacks paid in order to keep less costly competing products "off formulary" ruled by a court as illegal, and restitution would likely mean that Dexcom would no longer be able to pay bribes to PBMs keep Abbott Freestyle Libre CGMs "off-formulary". We'll have to wait for the outcome of that, but it seems clear in my mind that could be coming.

For its part, rival Dexcom is trying to have things both ways in order to maximize company profits at the expense of patients and employee healthcare plan sponsors. In an interview with MedTechDive, Dexcom CEO Kevin Sayer answered the following question this way:

MEDTECHDIVE: I've read about a potential "G7 Plus", where the life of the sensor would be extended from 10 days to 15 days. Is that something Dexcom is working on?

SAYER: It's absolutely something we would work towards. We stopped at 10 days at this point in time because we want to maximize the patient experience. Meaning, we want to make sure these devices last their entire useful life, and patients are getting what they signed up for.

Left unsaid was that while Dexcom makes sure the 15-day G7 Plus sensor lasts its entire useful life, the company also very recently changed its sensor replacement policy so the company will only replace 3 sensors each year. It also gets to charge more money. I'm calling Keven Sayer on a bull$#!t alert for that bad, dumb answer. It's all about the extra 40% more money Dexcom earns with the 10-day sensor.

In the meantime, we know according to Reuters (see https://www.reuters.com/business/healthcare-pharmaceuticals/abbott-plans-marketing-push-glucose-monitors-beyond-diabetes-2024-07-18/ for more) that Abbott management has told investors that the company plans to use a mix of mass market "TV advertisements and guerilla marketing" in the U.S. to grow the company's fairly miniscule CGM market share in the coming years. Like rival Dexcom's newly-launched Stelo, Abbott will also sell an OTC CGM aimed at Type 2 diabetes patients known as Lingo and Libre Rio to help grow the company's share, although neither product has hypoglycemia alarms or data-sharing, so I don't anticipate them changing the market for T1D patients.

But the new, coming Abbott "Freestyle Libre 3 Plus" is poised to cut CGM costs even further with one additional day of wear-time. Remember: while Dexcom's G7 and Stelo use the exact same CGM sensor, but the wear-time is 15 days for Stelo and only 10 days for G7. Evidently, the hypoglycemia alarms and data sharing is intended to cost patients 40% more money. But with Libre actually INCREASING its wear-time, that is something patients should look forward to!