A Medical Device Daily
Smiths Medical (St. Paul, Minnesota) said it will stop selling the Deltec Cozmo insulin pump, and manage an "orderly, carefully controlled" exit from its Diabetes business over time.
The decision to stop selling pumps means that 51 people working in the Diabetes business will be affected immediately, primarily in field sales, marketing and, to a lesser extent, clinical services, customer support and manufacturing.
Smiths said it would retain enough staff to ensure that it meets its commitment to customers for the remaining warranty period on pumps already sold. The company will continue to offer a pump recertification service for existing pumps that may need to be replaced during their warranty period.
"The continued health of the thousands of people who use the Deltec Cozmo insulin pump is our primary concern, and they should be reassured that their pump remains an excellent choice to help them manage their diabetes," said Srini Seshadri, president of Smiths Medical. "Our customers also should be reassured that Smiths Medical will meet all of its warranty obligations; provide customer and clinical support for the lifetime of the warranty of all pumps; ensure that Deltec Cozmo insulin pump cartridges and Cleo and Comfort infusion sets are available; and make any necessary transitions as simple as possible."
Smiths said that as its only direct-to-consumer enterprise, its Diabetes business has little synergy with the rest of its businesses. The Diabetes business requires its own sales, marketing, reimbursement, insurance and clinical support infrastructure in the U.S., which has resulted in it becoming "uneconomical as sales and profits for the business have decreased," the company noted.
Smiths also said that the market has evolved from a familiar hardware-plus-disposables model to an integrated diabetes management model that would require significant ongoing investments in continuous glucose monitoring. The company's shrinking market share has been exacerbated by the aggressive pursuit of market share growth by two large and well-respected players – Medtronic (Minneapolis), and Johnson & Johnson (New Brunswick, New Jersey), Smith noted.
Also, Smiths said, "a considerable amount of intellectual property has been established in the diabetes segment, which makes the development of next-generation products very costly, and risky in terms of the potential for future patent disputes."
"Throughout our involvement in the diabetes market, we have chosen always to put care for our customer first, providing excellent clinical support, maintaining the integrity of our warranty and being proactive about fixing issues as they arose," Seshadri said. "For our efforts, we have been rewarded with a core group of very loyal customers. We thank them and reiterate our commitment to making this transition as easy as possible for them."
For people with a Deltec Cozmo insulin pump, the company recommends that when the pump approaches the end of its warranty period, customers consult with their healthcare provider to choose a pump from another manufacturer.
Smiths Medical said it would work with pump users to transfer purchases of cartridges and infusion sets to one of the many national and/or regional distributors that stock these items. Pump users outside the U.S. may continue to purchase disposable cartridges and infusion sets from their local Smiths Medical distributor, the company said, a list of which can be found at www.DeltecCozmoUpdate.com.
Smiths supplies medical devices and products for global markets. It manufactures safety devices, vital care and medication delivery devices.
In other restructuring activity, The Quantum Group (Wellington, Florida) reported that it has implemented a reallocation of people and resources from other company operations to advance its Personal Wellness electronic Record (PWeR) platform. The company said it expects "explosive growth potential" for the PWeR platform and has shifted its structure to allow for this growth.
PWeR is the healthcare information technology platform developed and deployed by The Quantum Group. According to the company, PWeR meets and exceeds the guidelines set forth from Washington to implement electronic health records, and the platform is currently being used by more than 75 providers since the fall of 2008.
The most significant aspect of the reallocation was a tactical move to create a very experienced and well-trained PWeR sales team with established provider relationships, The Quantum Group said. Several provider specialists from Quantum subsidiary company Renaissance Health Systems have been transitioned to PWeR team specialists.
"The implementation of technology to address the lack of interconnectivity and communication in the healthcare industry has been a principle mission of our company since inception. PWeR is patient-centric and combines all of the features and applications needed by payers, healthcare providers and hospitals into one dynamic system," said Noel Guillama, president of The Quantum Group. "PWeR is an IBM hosted solution that is web-based and designed to address the privacy, security and scalability necessary for national and global deployment. PWeR is low cost, easy to implement and offers a 360-degree view of a patient record. The industry is beginning to transform as a result of a federal mandate to reduce costs, increase efficiencies and improve the quality of patient care. We are excited by the possibilities ahead with PWeR."
The American Recovery and Reinvestment Act of 2009 has designated $19.2 billion to promote and expand the use of technology in the U.S. healthcare industry to improve the quality of patient care and reduce costs.