Originally Published IVD Technology
July 2003
INDUSTRY NEWS
Diabetes products to undergo competitive bidding
Blood glucose monitors and test strips are being considered to be included under a competitive bidding model in Medicare reform legislation. The Medicare Prescription Drug and Modernization Act of 2003 lists the competitive bidding process for durable medical equipment as a long overdue necessary modernization. According to press officers for the House Ways and Means Committee, the committee has proposed adding blood glucose monitors and test strips to the competitive bidding program. By a bipartisan vote, the committee approved the bill, which has moved to Capitol Hill for a full vote by Congress.
A number of diabetes patient groups and organizations representing medical device manufacturers have criticized the inclusion of diabetes products in a competitive bidding model, citing the negative effect it may have on revenue and technological innovation. The Coalition for Access to Medical Services, Equipment, and Technology (CAMSET) has been one of the strongest opponents of including diabetes products in the competitive bidding process.
“The competitive bidding legislation will fundamentally change the way Medicare beneficiaries obtain medical supplies, including diabetes blood glucose meters and test strips,” said CAMSET in a statement. “Under competitive bidding, authorized Medicare suppliers will be chosen primarily based on who offers the lowest price. This will encourage suppliers to compete by offering only a limited range of the lowest-priced products. As a result, diabetics may no longer be able to use the products specifically recommended by their healthcare professionals to help manage their diabetes.”
“No one blood glucose monitor is suitable for all people with diabetes,” said CAMSET in another statement. “Medicare competitive bidding could eliminate [product] choices, forcing people with diabetes to select from a smaller range of monitors that may not meet their needs. Moreover, development of advances like noninvasive monitors will be significantly curtailed if there is not adequate funding to reward innovation.”
If Congress does pass this legislation, manufacturers of blood glucose monitors and test strips will have much to lose in what has been and is expected to be a good market. According to a report by Frost & Sullivan (San Antonio, TX), the total worldwide market for blood glucose self-monitoring devices generated approximately $4.5 billion in revenues in 2002. The U.S. market makes up more than half of this market, accounting for $2.55 billion. This market has experienced sustained double-digit growth rates in recent years and is expected to grow at a compound annual growth rate of 11% during the next few years.
Additional information about the Medicare reform legislation can be accessed via the House Ways and Means Committee’s Web site at
http://waysandmeans.house.gov.
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