The growing number of Americans afflicted with diabetes has led to a flood of blood glucose monitors on the market. Demand dictates that medical device companies should be producing them en masse, and the industry has been more than happy to oblige. But how do device companies distinguish their products from the competition in a crowded marketplace? If you're a company as big as Johnson & Johnson, you can always hire a prominent entertainer like Patti LaBelle to get the word out. Another company has chosen a different approach - leaving the market altogether.
Becton, Dickinson and Company (BD) announced their decision to stop selling their BD Logic Blood Glucose Monitor last week. The company's press release acknowledges that the heated competition for customers played a large role in the move. Although the company has been a player in the market since 2003, they have decided to focus on other devices, including insulin syringes. BD produced the first insulin syringe over 80 years ago. The company has promised to continue to serve diabetic patients with their other products.
If the decision of one company to bow out of a market does not exactly provide conclusive evidence that the market is reaching capacity, perhaps the other market players' reaction to it does. With BD's customer base up for grabs, several companies are making plays for their business. Roche Diagnostics, Lifescan, Inc. (who create Johnson & Johnson's Patti LaBelle-approved system), and Abbott have all announced that they will be offering free blood glucose monitoring systems for former BD customers.
The competition may be heated, but it's not completely saturated just yet. Home Diagnostics, Inc., for example, which makes blood glucose monitors, just went public. The company makes a disposable glucose monitoring system and two more traditional systems. Although the company's stock initial pricing came in under analysts' predictions, the stock rose from its initial price of $12 per share.
The great thing (in theory) about a crowded marketplace, and a free market system in general, is that it pushes companies to think about improvement. In order to sell the most, you have to be the best. We did a story a few newsletters ago about continuous glucose monitoring, which is the next big step device companies are trying to take to help diabetics live more normal lives. Who knows? With so many companies in the game, that could just be a stepping stone to even more revolutionary treatments. With Americans contracting diabetes in ever-increasing numbers, the market would certainly be accepting of any new innovations that device companies could offer.
