Here’s a novel — and utterly pragmatic American — idea: What if you could rent your insulin pump instead of buying it? So all you’d need to buy was the disposable supplies, and you’d be ready to trade up to new models in a minute?
David Kliff of Diabetic Investor explores the concept in his latest (subscription) newsletter, which I’ve been poring over with great interest.
Under this new pricing model, the patient would pay an annual lease payment to cover the pump’s manufacturing costs, and would continue to purchase pump disposables. It’s basically like leasing a car, Kliff explains. “Why spend $40,000 or more when for a few hundred dollars a month a consumer has almost all the same benefits as someone who purchases the car outright? At the end of the lease, the consumer simply returns the car and the process begins all over.”
The idea seems to be exclusively Kliff’s at this point. So what would happen to the insulin pump market if just one of the conventional pump companies decided to take the leap?
Currently the hottest growth companies are Medtronic and Insulet, makers of the new tubeless OmniPod System – but a leasing model could level the playing field again, according to Kliff. For example, Insulet currently has an advantage in the low upfront cost of its pumping unit ($800), but the annual supply costs are quite high (nearly $4,000 for a year’s worth of Pods), Kliff reports.
A leasing structure could be better for everyone, Kliff argues:
Patients could eliminate buyer’s remorse, and would have the opportunity to consistently upgrade to new and improved pumping technology.
Manufacturers would avert price wars, which may soon otherwise force a number of players out of the market altogether (leaving patients with fewer choices).
Third-party payers (Medicare, HMOs, and other organizations footing the bill for medical services) would no longer have to cough up thousands of dollars each time a patient starts pump therapy, or replaces an out-of-warranty pump.
Sounds pretty win-win-win, anyway.
OK, calling all Pumpers and Potential Pumpers out there: Let us know what YOU think.