Diabetes diagnostics: Robust growth ahead

February 19, 2001

stockchecker on diabetes

 

Diabetes diagnostics:
Robust growth ahead

Two factors, an aging population and obesity among the young, are causing a rapid increase in type 2 diabetes. According to the Centers for Disease Control & Prevention in Atlanta, of the more than 2,000 new cases diagnosed daily throughout the 1990s, 90%-95% were type 2. Even more astonishing, it’s estimated that only 10 million of the 16 million people with diabetes have been diagnosed–and that’s a staggering number of untreated people.

The undiagnosed face potentially serious consequences. Uncontrolled glucose levels can cause circulatory problems, blindness, sexual dysfunction, heart disease, and nerve damage. Diabetes and diabetes-related conditions costs U.S. insurance companies and consumers an estimated $92+ billion each year.

Trends

Four factors are spurring growth in the testing market. First, obesity and inactive lifestyles have increased diabetes an alarming 76% among people in their thirties. A recent study in the Diabetes Care Journal reported that every kilogram (2.2 pounds) of extra weight raises the risk of diabetes 4.5%.

Second, the number of diagnosed patients is rising overall. Roche Diagnostics predicts that three million more patients will be diagnosed by 2005.

Third, the number of consumers testing their blood sugar levels is rising. Sales of meters and strips are projected to more than double within five years.

Lastly, consumers who do test themselves are testing more often–up from an average 4.7 tests per week in 1996 to 6.9 tests per week in 2000. That’s a 24% increase in strip use, translating into 2.5 billions strips. It’s great news for drugstores–they attract frequent testers.

The market

The diabetes test market can only grow. New and innovative products, increased compliance, and an aging population will fuel sales. According to data from D. P. Hamacher & Associates, a division of NONSTOP Solutions Inc. (DPH&A), glucose testing strips hold the top five health and beauty care (HBC) positions–more good news for drugstores whose share of strip sales grew 10.3% in the past year.

Strip sales are so important that manufacturers often make new monitors available to consumers at little or no cost to secure subsequent strip purchases. For example, Abbott Laboratories, the maker of MediSense Precision Q-I-D, offered customers $55 in rebates ($20 cash with a $35 trade-in). As a result, sales of strips and meters jumped 37%.

According to IMS Health, sales of meters and strips in 2000 increased 19.5% compared with the corresponding period in 1999. The following table shows the sales of the top 10 brands:

 

 

$ sales in 2000

$ sales in 1999

Total blood sugar tests

One Touch

Accu-Chek Comfort

Glucometer Elite

Accu-Chek Advantage

Precision Q-I-D

SureStep

Fast Take

MediSense

Glucometer Dex

Accu-Chek Instant

$1,503,300,000

$379,400,000

$214,000,000

$203,700,000

$166,700,000

$102,600,000

$73,500,000

$66,700,000

$52,700,000

$45,900,000

$28,000,000

$1,258,400,000

$392,700,000

$65,000,000

$57,000,000

$199,600,000

$74,600,000

$61,500,000

$42,300,000

$50,600,000

$11,600,000

$28,100,000

Consumers tend to be brand-loyal when buying blood glucose testing supplies, using the meters and strips recommended by their doctors. These consumers are, however, more price-driven than location-loyal. Although insurance covers part of the cost, strips are expensive, and saving $5 can prompt patients to switch stores.

Merchandising

DPH&A continues to advise moving diabetic care merchandise out onto the selling floor. According to the RDC Productivity and Profitability Analysis, stores that made the move increased department sales and profits by 31.4%. Although losses due to theft rose 2%, net profits climbed 9.5%.

Placing items on the selling floor gives customers better access to products and a better opportunity to respond to promotional offers and the economies of large-size packs. If space near the pharmacy can’t accommodate a full selection of merchandise, consider this alternative: Place only the highest-volume products out front, and keep less popular and specialty items behind the counter.

Non-script diabetes customers generate 31% of sales, and these customers consider waiting in the pharmacy line inconvenient. A typical diabetes patient spends $3,500 annually in pharmacies–three times the amount of the "average" consumer.

Importance of testing

Testing glucose levels four-plus times a day can greatly reduce the risk of complications, says the American Diabetes Association. Yet Diabetes Digest surveyed readers and found fewer than 53% of testors test more than nine times per week, citing expense and discomfort for not testing more often. The rising number of type 2 diabetes cases provides a strong incentive to educate both the public and newly diagnosed diabetics about the benefits of testing regularly. Help your customers form good habits. Impress on them the value of regular testing.

 

DIABETES CARE CATEGORY SUMMARY

 Large dept.Medium dept.Small dept.

Linear feet

Number of SKUs

Estimated sales per year

Estimated inventory retail

Estimated turnover

32

98

$136,000

$10,860

12

28

89

$133,500

$10,350

13

21

64

$121,000

$8,500

14

DIABETES CARE NEW ITEMS

Product

AtLast Blood Glucose System

AtLast Test Strips 50

Choice DM Bar 4 Crispy Berry Almond

Choice DM Bar 4 Crispy Peanut Butter

Choice DM Bar 4 Fudge/Brownie

Choice DM Bar 4 Peanut Butter/Chocolate

Choice DM Cereal 6 x 1.4oz Apple

Choice DM Cereal 6 x 1.4oz Maple

Choice DM Liquid 8oz 6-Pack Chocolate

Choice DM Liquid 8oz 6-Pack Vanilla

Excel GE Test Strips 50

Extend Bar 6 Chocolate Chip Crunch

Extend Bar 6 Peanut Butter Crunch

Freestyle Control Solution

Freestyle Monitoring System

Freestyle Test Strips 50, 100

SureStep Test Strips Foil 10, 50

Voyager Diabetic Needle Disposal

Amira Medical

Amira Medical

Bristol-Myers/Mead Johnson

Bristol-Myers/Mead Johnson

Bristol-Myers/Mead Johnson

Bristol-Myers/Mead Johnson

Bristol-Myers/Mead Johnson

Bristol-Myers/Mead Johnson

Bristol-Myers/Mead Johnson

Bristol-Myers/Mead Johnson

Can-Am Care Corp.

Clinical Products Ltd.

Clinical Products Ltd.

Therasense

Therasense

Therasense

Johnson & Johnson/LifeScan

Safe Medical

 

DIABETES CARE NEVER OUT LIST

Use this Never Out list to monitor your in-stock condition. The items listed account for more than 50% of the dollar sales in the diabetes care department. An out-of-stock on any of these items represents a significant loss of sales.

____ Accu-Chek Advantage Diabetes Care Kit

____ Accu-Chek Advantage Strip 50

____ Accu-Chek Advantage Strip 100

____ Accu-Chek Comfort Curve Strip 50

____ Accu-Chek Comfort Curve Strip 100

____ Accu-Chek Easy Strip 50

____ Accu-Chek Softclix Lancet 100

____ Accu-Chek Soft Touch Lancet 100

____ B-D 6895 Alcohol Swab 100

____ B-D 328230 Glucose Tablet 6

____ B-D Ultra Fine II Lancet 100

____ Fast Take System

____ Fast Take Test Strip 50

____ Fast Take Test Strip 100

____ Glucerna 6 x 8oz Vanilla

____ Glucometer Dex Sensor 50

____ Glucometer Elite Strip 50

____ Glucometer Elite Strip 100

____ Glucometer Elite XL Kit

____ Ketostix Strip 50

____ Microlet Lancet 100

____ Private Label Alcohol Swabs 100

____ Private Label Lancet 100

____ One Touch Basic System

____ One Touch Lancet 200

____ One Touch Test Strip Genuine 50

____ One Touch Test Strip Genuine 100

____ Precision QID Test Strip 50

____ Precision QID Test Strip 100

____ Soft Touch Lancet Device

____ Soft Touch Lancets 100

____ SureStep Test Strip 50

____ SureStep Test Strip 100

 

DIABETES CARE COMPETITIVE SHOP LIST

This list includes the most popular and price-sensitive SKUs in the diabetes care department. Use it to see if your prices on these key items fall within the average everyday retail range.

Item Everyday

Accu-Chek Advantage Strip 50

Accu-Chek Soft Touch Lancet 100

B-D 6895 Alcohol Swab 100

Fast Take Test Strip 50

Glucometer Elite Strip 50

One Touch Test Strip 50

Precision QID Test Strip 50

SureStep Test Strip 50

$37.99 — $44.89

$9.99 — $11.49

$1.99 — $2.59

$35.69 — $41.99

$37.99 — $45.99

$35.99 — $39.99

$38.99 — $46.99

$36.99 — $41.99

 



Sandra Levy. Diabetes diagnostics: Robust growth ahead.

Drug Topics

2001;4.