BMJ Reports Insurance Providers May Not Cover New Diabetes Devices

May 1, 2000

In the February 26 issue of the British Medical Journal (BMJ), it was reported that U.S. insurance companies may not pay for new devices such as the GlucoWatch monitor.

"Although medical device companies in the United States are forging ahead in developing new, non-invasive blood and tissue glucose monitors, insurance companies are proving unwilling or unable to pay for many of them," the article states.

The GlucoWatch monitor, if approved by the U.S. Food and Drug Administration (FDA), is likely to retail for about $300, while the disposable sensor pads (two per day required) are estimated to cost around $4 per pad.

According to BMJ, in August 1997, LifeScan of Milpitas, California, the leading manufacturer of blood glucose monitoring systems, commissioned a Gallup survey of 252 of the United State's largest insurance companies. It found that 38 percent provided no coverage for the new glucose monitoring meters and strips.

Michael Mawby, national vice president for advocacy at the American Diabetic Association, told BMJ that he was pessimistic about health insurance coverage for the new glucose monitoring systems.

"I'd be very surprised if any insurer rushed out to cover them...Food and Drug Administration approval does not translate into automatic coverage."

An Important Priority for Cygnus

Craig Carlson, chief financial officer at Cygnus in Redwood City, California, says making sure the GlucoWatch monitor is covered by an insurance carrier will be a top priority.

"Cygnus will take strides to make sure the GlucoWatch is covered by some insurance carrier," says Carlson, who sees the BMJ article as flawed, since the Gallup study was commissioned in 1997, when there were no novel glucose monitoring meters or strips. Since then, the AtLast and FreeStyle meters have been approved by the FDA, and the GlucoWatch appears to be on the cusp of FDA approval after a unanimous recommendation by an FDA advisory panel in December 1999. "There is no question in our minds that payers will need to look very closely into whether or not they will reimburse new technologies. What we will need to provide them is some compelling evidence in the form of outcome studies to indicate how the GlucoWatch user is able to achieve tighter BG control, thus ensuring short-term and long-term patient benefits as well as cost benefits to payers."

Carlson indicates that Cygnus has not commissioned such studies yet.

Not an Issue at Amira

Anne Callahan, manager of professional relations at Amira Medical in Scotts Valley, California, says the AtLast meter is similar to existing meters in function and price, so getting insurance coverage has not been an issue.

"Devices such as the GlucoWatch and continuous monitors have additional implications and may be perceived as products specific to type 1 diabetes by payers, and therefore, not automatically covered or covered only by demonstration of medical necessity," says Callahan, who says Amira has had few problems when approaching insurance companies. "There are some payers that have closed formularies, so that presents some challenges, but in most cases, AtLast is handled like current meters."

In a prepared statement for DIABETES HEALTH, spokespersons at TheraSense in Alameda, California said, "In general, blood glucose monitors and strips are reimbursed. Because of initiatives in diabetes health management, we think health plans and payers will be very interested in a product that can help members better manage their diabetes with less pain. And since FreeStyle is competitively priced with other blood glucose monitors, they won't have to compromise on reducing pain in order to stay within the cost constraints."

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