Medtronic Launches a New CGM known as "Simplera", the company also announces it is exiting the CGM business and outsourcing that to Abbott

This morning, there were press releases from both Medtronic (see Medtronic's release at https://www.prnewswire.com/news-releases/medtronic-announces-fda-approval-of-simplera-cgm-and-global-partnership-with-abbott-302216165.html for details) and also from Abbott Laboratories which were worth some attention.

Medtronic's press release was that the Food and Drug Administration had approved the company's "Simplera" CGM device, which it says will be the company's first disposable, all-in-one CGM that's half the size of previous Medtronic CGMs.

Medtronic's New Simplera CGM

But buried halfway through the Medtronic press release was this not-so-little tidbit:

Medtronic is excited to announce a global partnership with Abbott to expand CGM options for people living with diabetes. Under this unique agreement, the companies will collaborate on an integrated CGM based on Abbott's most advanced CGM platform. Abbott will supply Medtronic with a CGM that will work exclusively with Medtronic smart dosing devices and software across both automated insulin delivery and Smart MDI systems. These systems, including the Abbott-based CGM, will be sold exclusively by Medtronic.

Financial terms of the partnership and timing for commercial availability were not disclosed. In other words, going forward Medtronic will no longer even be manufacturing its own CGMs as it previously did, instead the company will outsource the manufacture of Medtronic-branded CGM sensors to Abbott. Abbott will make a CGM sensor version that is designed specifically to work with Medtronic insulin pumps and with the Medtronic/Companion Medical InPen smart insulin pen system.

Announced on August 7, 2024, the Simplera CGM's approval was accompanied by the introduction of a global partnership with Abbott to expand CGM options for individuals with diabetes. Under this agreement, the companies will collaborate on an integrated CGM based on Abbott's more advanced CGM platform and Medtronic Automated Insulin Delivery (AID) software which works with a CGM.

Separately, Abbott had its own press release (see the Abbott release at https://www.prnewswire.com/news-releases/abbott-enters-global-partnership-to-connect-its-world-leading-continuous-glucose-monitoring-system-with-medtronics-insulin-delivery-devices-302216439.html).

To be sure, the Medtronic/Abbott collaboration is a mutually-beneficial deal for both companies. Medtronic was a high-cost CGM manufacturer which could not match the Abbott's lower cost of making CGM sensors. But it is also kind of a slap in the face to Dexcom which tells everyone it is the only CGM brand which works with AID systems in the U.S. Dexcom, for its part, has partnerships for a number of insulin AID systems, although several are "non-exclusive" partnerships (including both Insulet/Omnipod as well as Tandem's pumps, although they both have more work to finish before their AID systems will work with Abbott's newest Freestyle Libre 3 model in the U.S. 

One reason you might not be aware of for Dexcom's current domination in U.S. AID systems is because Dexcom currently pays CVS Caremark/Aetna and United Healthcare's OptumRx legally-exempted rebate kickbacks for "formulary exclusion" of CGMs sold via the retail pharmacy channel which exclude "All other continuous glucose monitoring systems that are not DEXCOM brand". For its part, Abbott has a work-around to that, by introducing a cash-pay manufacturer coupon which I blogged about in December 2023. Unfortunately, most U.S. patients are clueless about their true out-of-pocket costs for CGM sensors. Otherwise, they would conclude Abbott's Freestyle Libre with its 14 day wear-time is significantly less costly than Dexcom's CGM sensors which only offer 10 day wear-time.

Regardless, with the recent Medtronic/Abbott alliance on CGMs, it will undoubtedly be a chip in Dexcom's armor of dominance of the North American CGM market. I believe that Abbott's newest sensors are superior to those of Dexcom's, and they are about 37% less expensive for patients. Money talks, Dexcom, and your ability to continue charging patients with T1D higher prices for identical sensors used in your 15 day Stelo product for the benefit of data-sharing and low/high blood glucose alarms may be ending sooner than the company realizes. The Medtronic/Abbott alliance will be yet another factor contributing to that. Perhaps it needs to reduce its CGM sensor production costs to less than $10/sensor even sooner than the company has been promising investors was its goal?