When Smiths Medical announced in late March that it was discontinuing the manufacture and sales of its Deltec Cozmo insulin pumps, the company’s annual sales of that product were about $36 million. In contrast, Medtronic, manufacturer of the Minimed line of insulin pumps reported sales of $727 million in the nine months from April 2008 to January 2009.
Medtronic quickly stepped forward with the “Medtronic Cares Program,” an offer to give Deltec users whose pumps are still under warranty a low-cost “recertified” Medtronic Paradigm 522 or 722 insulin pump, 30 days of supplies and a two-year warranty.
The supplies include one box of infusion sets, one box of reservoirs, and one insertion device.
The cost of the Medtronic pump is $1,300. To mitigate users’ expenses in shifting to the Paradigm system, Medtronic is offering a $500 trade-in allowance for Deltec pumps under warranty, for an $800 total expense.
Further, Deltec users who shift to the Medtronic device and participate in four surveys over a 12-month period will be eligible for a $200 credit per survey-a move that could reduce prior Deltec users’ overall out-of-pocket expenses to zero.
(Medtronic’s website has more details about the promotion, which the company has announced it will offer to current users of any brand of insulin pump that is still under warranty.)
While Medtronic’s offer to the 30,000 to 35,000 Deltec users can be seen as an astute marketing move in a highly competitive market, it will probably invite special offers from the company’s chief rivals, Insulet and Animas.
Diabetes Investor publisher David Kliff is skeptical that Medtronic’s offer of a reconditioned pump will be all that appealing. “Leave it to Medtronic to offer Deltec patients a recertified-a fancy term for a used pump-rather than a brand new insulin pump,” he told his subscribers recently.
He thinks that may leave the door open for Medtronic’s rivals to offer free pumps or personal diabetes managers-a costly move upfront but one that could pay off handsomely down the road as pumping and monitoring technology advances and the number of people with diabetes swells.
Arden Hills, Minneapolis-based Smiths Medical, a subsidiary of the British conglomerate Smiths Group, suffered from both a lack of diabetes-related products that it could offer to complement the Deltec pump, and the need to compete against larger rivals, including Medtronic and Johnson & Johnson.