Memorandum

Medtronic starts shipping MiniMed 630G in US, offering upgrade to 670G hybrid closed loop for $0-$299 out of pocket – September 22, 2016

Executive Highlights

  • Medtronic has started shipping the MiniMed 630G/Enlite to US patients (threshold suspend on the new pump platform), as expected following FDA approval last month.  
  • A generous upgrade program will enable new 630G users to get on the next-gen 670G/Enlite 3 hybrid closed loop for just $0-$299 (subject to certain terms).
  • The upgrade program is more generous than we would have guessed, could increase 630G adoption near-term, and hedges against upcoming competitive pump offerings.

A Medtronic email to HCPs on Tuesday shared that the MiniMed 630G/Enlite has started shipping to US patients (threshold suspend on the new pump platform), right on time following the unexpected FDA approval last month. We’ve learned about a generous upgrade path to enable new 630G users to get on the upcoming 670G/Enlite 3 hybrid closed loop once it is approved (still expected by April 2017):

  • $0 out of pocket for a 630G -> 670G upgrade, if the 630G is purchased by December 31. These patients also get “priority access” and “first-in-line” status to get on the 670G. (Subject to terms below.)
  • $299 out of pocket for a 630G -> 670G upgrade if the 630G is purchased in 2017. (Subject to terms below.)

The 630G-670G upgrade path was one of our major questions last month, and is more generous than we would have guessed. The price for current in-warranty Medtronic 530G and Revel pumpers to get on the 630G is expensive – $599 or $3,100 out of pocket, depending on whether the pump was purchased after or before May 1, 2016 (including a $400 trade in credit). We had previously expected most patients to simply wait for the 670G hybrid closed loop, but this upgrade program makes the precursor 630G slightly more compelling (“be on the fast-track to our next generation system”). We lamented last month that the 630G cannot be software updated to add the 670G algorithm, but at least the 630G -> 670G upgrade price is not exorbitant.

Still, the majority of Medtronic patients probably aren’t going to pay $3,100 to get on the 630G soon, meaning this new 630G -> 670G upgrade program is really for recent pump purchasers (after May 1, 2016), those out of warranty, and those on MDI considering a pump right now.

The 630G is an incremental product launch, but it is smart strategically: (i) a better Medtronic pump out on the market (waterproof, color screen, remote meter bolus) before the 670G hybrid closed loop; (ii) potentially speeds the 670G’s regulatory review (same pump platform now approved); and (iii) could defend against near-term competitive threats. With this upgrade program, the 630G may help retain current patients and bring new patients into Medtronic’s installed base. We wonder if this program will sway users away from competitor offerings, particularly Tandem’s new t:slim X2 pump launching in 4Q16 (adding the ability to online software update the pump to eventually add Dexcom G5 and closed loop algorithms).

Medtronic has posted an interesting feature-by-feature comparison between the 630G, other insulin pumps, and Dexcom’s G5 mobile CGM. While we don’t think patients choose devices based on the number of YES boxes, it could be compelling marketing to providers. Taking a page out of Tandem’s book, Medtronic has also launched a simulator app to experience the 630G user interface.

  • There are terms and conditions to the 630G -> 670G upgrade program, including stipulations that: (i) patients must take advantage within 90 days of the 670G’s availability; (ii) payer verification that will support transitioning to the 670G; and (iii) participation “in an approved system access program” (we have no idea what that is, but more details are expected once the 670G is approved).
  • As a reminder, the 630G retains the 530G/Enlite’s threshold suspend feature (now called SmartGuard technology), but puts it on the company’s new pump platform (640G, 670G) – adding a color screen, waterproof, remote bolusing from the Contour Next Link meter, greater alarm customization, and more. Read a full list of the 630G’s improvements and drawbacks in our previous coverage here.

 

Close Concerns Questions

  • How quickly will the 670G be adopted out of the gate? Will it appeal to the majority of patients on MDI and fingersticks, for whom hybrid closed loop may be a big jump? How will payers view the 670G and similar technologies? These are major questions for the entire field, since there many companies currently fighting over a fairly small type 1 market currently on pumps. Will automated insulin delivery dramatically expand the market? Will it penetrate into type 2? How many product generations will it take to expand beyond early adopters?
  • Will payers make it hard to access automated insulin delivery if more patients than ever demand it? Will hybrid closed loop be cost-effective relative to best-in-class MDI + CGM + decision support? As MDI + CGM becomes more compelling with Bluetooth-enabled pens and smart open-loop algorithms, will automated insulin delivery face tougher competition? How much of a threat are SGLT-2 inhibitors for type 1 diabetes?

--by Adam Brown and Kelly Close