Corner-Cutting at Scale: Management Failure at Dexcom

Dexcom Inc., once the undisputed leader in continuous glucose monitoring, now finds itself at a troubling inflection point. What else would you call a company that rushes a new product to market using inferior materials to match a competitor's launch date, while its CEO quietly takes an extended leave before announcing his departure, and its senior executives exit en masse? Management textbooks might call it a case study in corporate short-termism, poor governance, and cultural toxicity. These aren't isolated missteps; they're symptoms of deeper dysfunction at Dexcom, Inc.

For years, Dexcom enjoyed a stellar run. Its G6 sensor was praised, its margins were strong, and its reputation among patients and clinicians was enviable. But cracks have begun to show. In July 2025, CEO Kevin Sayer announced he would step down on January 1, 2026 (contained in the quarterly earnings release found at https://www.businesswire.com/news/home/20250730050482/en/Dexcom-Reports-Second-Quarter-2025-Financial-Results-Updates-Full-Year-2025-Guidance-and-Announces-CEO-Succession-Plan/ for details), after a decade at the helm. His successor, Jake Leach, currently serves as President and COO. Yet Sayer's extended absence (see https://www.drugdeliverybusiness.com/dexcom-ceo-takes-temporary-leave-absence/ for the news) before the announcement raised eyebrows, and the leadership transition comes amid troubling signs.

Perhaps the most telling indicator of Dexcom's decline is its over-reliance on questionable accounting maneuvers—gimmicks that forensic accountants can spot with ease. According to Nick Gibbons, an Adjunct Assistant Professor of Accounting at NYU Stern and contributor to Hunterbrook Media, Dexcom used similar tactics back in early 2024. Specifically, the quarter after Dexcom's Days Sales Outstanding (DSO's) spiked near 100 in early 2024 — an issue flagged at the time by the accounting group — the company's stock fell around 40%. The DSO number obscures weaker-than-expected earnings. Gibbons, an alumnus of ASU's Thunderbird School of Global Management, who also teaches courses on financial statement fraud for NYU, and recently dissected Dexcom's filings in a critical Hunterbrook article (see https://hntrbrk.com/dexcom/ for the article).

His analysis coincides with a wave of senior executive departures at Dexcom. 

In October 2024, EVP and Chief Commercial Officer Teri Lawver announced her retirement (see the MedTech Dive article on Teri Lawver's retirement at https://www.medtechdive.com/news/dexcom-chief-commercial-officer-retire-earnings/731135/). Hers was a high-profile exit, but it was hardly the only one. Barry Regan (EVP of Global Operations), Paul Flynn (EVP of Global Revenue), Steven Pacelli (EVP and Managing Director of Dexcom Ventures), Laura Endres (SVP of North American Channels and Payors), Andre Hoth (Head of Engineering for pump integration), and John Alvio (Treasury Supervisor) have all left the company within the past year. This exodus suggests internal instability, not just routine turnover.

Adding to the growing list of concerns, Dexcom is now facing a surge in customer complaints about its newer G7 sensor.  And, I'm not even mentioning Dexcom's over-reliance upon legally-exempted rebate kickbacks paid to PBMs contingent-upon "formulary-exemption" which aims to prevent patients from having access to rival CGM products such as Abbott's Freestyle Libre products, although I have written about that in the past (catch my coverage of the Nick Jonas Superbowl ad fiasco HERE).

Dexcom's G7 CGM sensor with built-in transmitter

That product, rushed to market, has been plagued by (in)accuracy issues and regulatory scrutiny. According to FDA documents published by Hunterbrook (see FDA warning letter at  https://www.fda.gov/inspections-compliance-enforcement-and-criminal-investigations/warning-letters/dexcom-inc-700835-03042025/ for more detail), Dexcom made unauthorized changes to a critical component: the membrane coating on the sensor filament. Originally sourced from a third-party silicone compound, the coating was designed to block chemical interference—especially from acetaminophen—and to help ensure accurate glucose readings. Dexcom replaced it with an in-house formulation, developed by individuals with questionable scientific credentials. The FDA privately warned Dexcom that its own tests showed the new coating performed worse.

This isn't just a technical hiccup. 

It reflects a corporate culture that consistently prioritizes commercial speed over science. Only the financial consequences of that are just starting to become evident. For example, Dexcom's gross margin has declined for 15 consecutive quarters, falling to 59.5% in Q2 2025. While the company offered various explanations or excuses, analysts at Goldman Sachs and JPMorgan have flagged the Dexcom margin pressure as structural. Excess and obsolete inventory charges, likely tied to product flaws and returns, are weighing heavily.

Hunterbrook's article (again, see https://hntrbrk.com/dexcom/ for the article), provocatively titled "Dexcom's Fatal Flaws," may lean toward some hyperbole, yet the underlying concerns are genuine. Many newly diagosed patients do not realize that CGMs don't actually measure blood glucose directly; they measure correlated substances found in interstitial fluid. That's why clinicians recommend verifying suspected erroneous CGM readings with a fingerstick test. Yet many newly diagnosed patients and caregivers don't even realize this and rely upon Dexcom readings as if they were not subject to error, and yet the G7's inaccuracies have led some to abandon Dexcom altogether. Longer-term patients have the luxury of knowing how flawed CGMs actually are.

Riva Greenberg, a longtime diabetes advocate and writer for Huffington Post and diaTribe News, blogged earlier in 2025 how she switched to Abbott's Freestyle Libre 3/Libre 3 Plus. Covered by traditional Medicare with a Medigap supplement, hence she made the transition after frustrations with the G7. In her blog, Diabetes Stories, she candidly described her disappointment with Dexcom's latest offering (see https://diabetesstories.com/2023/07/21/im-sorry-to-say-im-not-loving-dexcoms-g7/ for her post).

Others have conducted side-by-side comparisons of the G6 and G7. Among them include Dan Heller, a former CEO of a molecular diagnostics firm based in the Bay Area, who happens to be a person living with T1D himself, ran both sensors concurrently and documented the discrepancies. His Substack article, which draws heavily from Hunterbrook's reporting, adds a personal layer to his technical critique demonstrating the G7's flaws. His Substack article chronicling those comparisons can be read at https://danheller.substack.com/p/dexcoms-tumble-and-the-ill-fated-g7-sensor/.

Taken together, these developments paint a picture of a company (Dexcom) in trouble—not just operationally, but culturally and financially. Whether Jake Leach can reverse the tide remains to be seen. But the warning signs are no longer subtle. Dexcom's reputation, once built on trust and innovation, is now being tested by the very patients it was meant to serve.

On the upside, even while my own insurance company's PBM is collecting kickbacks from Dexcom contingent upon "formulary exclusion" of competing CGMs, and even while Aetna/Caremark cover about 37% to 40% of Dexcom sensor costs pre-deductible to ensure that kickback cash continues to flow to Caremark, as I blogged back in December 2023 (catch my coverage at https://blog.sstrumello.com/2023/12/abbott-gets-real-about-formulary.html for more), patients can use a manufacturer coupon from Abbott even if their insurance company tries to prevent you from using any CGM other than Dexcom. 

Below is Hunterbrook Media's video of its article "Dexcom's Fatal Flaws" which can be seen at https://youtu.be/_ogUlKUEVmQ?si=d3lmMOQhfvS8S8Tq or below.