Executive Highlights
- Abbott today announced the US launch of its newest BGM, the FreeStyle Precision Neo, which received FDA 510(k) clearance in September 2014.
- The meter is on the basic side in terms of features, but brings a slim profile thinner than an iPhone. The marketing message is one of accessibility: “Skip the Copay.” Neo test strips are available over-the-counter, at $14-17 for 25 strips (~$0.62 per strip). The meter retails for $22-27.
Today, Abbott announced the US launch of its newest BGM, the FreeStyle Precision Neo. As a reminder, the Neo received FDA 510(k) clearance in September 2014, following a modest seven-month FDA review. The device was CE Marked and launched in the EU in September 2013, though this is the first update from Abbott on the US front in some time – even FDA clearance was not officially announced by the company until today.
The meter is on the very basic side in terms of features, but brings a super slim profile thinner than an iPhone 5 (0.34 in). Abbott has also packaged the Precision Neo strips individually in flat foil, further building on the portability front. We have tested the Neo ourselves and also appreciated the large, high-contrast display – the big, bold numbers should appeal to patients with visual challenges (see Abbott’s video introduction here). Otherwise, we didn’t see any highly notable features that distinguish it from Abbott’s other offerings. The Precision Neo does need twice the blood volume (0.6 uL) of the other FreeStyle meters (0.3 uL). See a comparison chart here.
Abbott’s main marketing message is one of accessibility: “Skip the Copay.” The Neo test strips are available over-the-counter at $14-17 for 25 strips (~$0.62 per strip). For comparison, this is more than Walmart’s Reli-On Prime ($0.18 per strip) and CVS-branded meters made by AgaMatrix (~$0.22 per strip), and roughly on par with Walgreens store brand strips made by Nipro (~$0.50-$0.70 per strip). Certainly, the Neo strip pricing is significantly cheaper than the cash price for Big Four strips, which are generally above $1 a strip, and even range up to $1.75 per strip (!) for LifeScan’s Verio strips. (Amusingly, the website SkipTheCopay.com redirects to the Abbott website for the Neo – nice tagline!). The Neo meter retails at $22-27, on par with the out-of-pocket for most basic meters these days. Abbott’s official Neo website can be found here.). The meter and strips are already available online at major US retailers (Walmart, CVS).
Given that Abbott’s US business has been hard hit by BGM pricing pressures (in 4Q14, sales of only $108 million fell 16% against an easy comparison [down 14% in 4Q13]), we wonder whether the over-the-counter focus is reflective of a new US strategy to more directly compete with store brands, or potentially, appeal to consumers with high deductible health plans (particularly those on Exchange Bronze plans, where the first $5,000 is out of pocket). Certainly, FreeStyle Libre is doing very well in Europe in the early launch days, but the timing on bringing it to the US is unclear and probably not very near-term. Regardless, we see today’s launch as a win for patients – a branded, accurate meter at a non-prohibitive price for those paying out of pocket. We look forward to more specifics on the Precision Neo in Abbott’s 1Q15 call next week (April 22).
- Abbott’s series of promotional videos for the Neo: (i) introduce the Neo; (ii) describe its functionality; (iii) highlight the low cost; and (iv) provide an introduction to the individually packaged tests strips. The latter was an interesting design choice and we wonder how patients will like it – the slimmer packaging profile is excellent and the foil is easier to tear through, though it’s certainly from vials patients may be used to.
- The Neo website also features testimonials from patients that focus, again, on the accessibility and convenience of Neo:
- “My blood glucose monitoring system easily fits into my life, with its super slim and lightweight profile.”
- “Just because your blood glucose strips are covered by insurance doesn’t mean your co-pay is a good deal.”
- From Neo’s EU/Canada website: Neo is “dependable”, "easy to use”, and “helps you with your insulin routine."
- The Neo website also features testimonials from patients that focus, again, on the accessibility and convenience of Neo:
- The meter also features a blood glucose trend indicator (an arrow that lights up when patients are out of range) and allows providers to program a patient’s insulin plan into the device (we’re still figuring out how to use this feature).
-- by Varun Iyengar, Adam Brown, and Kelly Close