Abstract
Developing Countries Emerging as Key Markets for Diabetes Monitoring
Devices
The demand for glucose self-monitoring devices has seen tremendous growth in
recent years. Developing countries are rapidly emerging as important markets for
these devices, spurred by growing awareness, availability of sophisticated
self-monitoring technologies, and greater purchasing power. This is evident from
the strong growth experienced by participants in these countries during the
2002-2003 time period even as they were undergoing a relatively slow growth
phase in the U.S. market.
This strategic analysis service (SAS) from Frost & Sullivan is a visual
presentation of the latest trends in the global diabetes glucose monitoring
devices markets and their three segments: glucose meters, glucose test strips,
and continuous glucose monitoring systems. It examines the significant
challenges faced by participants and recommends strategies to overcome the same.
Market metrics include segment-wise revenue forecasts, pricing trends,
identification of emerging opportunities, and detailed information on
competitive positioning of leading companies.
A ?eFree Meter?f Market Relies Heavily on Test Strips for Higher
Profitability
The glucose self-monitoring devices business has often been described as a
?efree meter market?f because of the heavy discounts offered on glucose
meters. In most cases, glucose meters, priced between $45 and $100 are
distributed free with the purchase of multiple packs of glucose test strips. Due
to this, equipment manufacturers consider meters as ?eloss leaders?f and try
to amortize their cost over a specific time period. The challenge for
manufacturers lies in patient selection and distribution of free meters to these
?eideal?f patients that are likely to use test strips and meters frequently
and generate repeat sales.
Consumer-driven Marketing Campaigns – Essential, though Expensive
Key market participants have traditionally focused their selling efforts on
professional healthcare agencies such as the Managed Care and Medicaid or
Medicare that exercised considerable influence on purchase decisions. This is
gradually changing with leading companies such as Roche, LifeScan, Bayer, and
Abbott Laboratories beginning to focus on direct-to-consumer advertising. They
are channeling significant funds toward such campaigns to differentiate their
products, generate recall, and create brand recognition.
"Brand awareness is extremely important as most consumers
?eself-select?f their glucose monitoring kit," says the analyst.
"Though healthcare professionals are highly influential in the initial
purchase decision, subsequent upgrades and/or purchases are often based on
multiple factors, with advertising through media being a key strategy."
Escalating Expenditure for R&D and Marketing Triggers Consolidation
"Marketing and R&D expenditures have skyrocketed following the
consumer-focused approach adopted by device manufacturers," says the
analyst. This has triggered industry-wide consolidation across the world. One
recent example for such consolidation is the acquisition of TheraSense, Inc. by
Abbott Laboratories. Many small and niche companies lack sufficient funding and
hence, look for collaboration with resource-rich large companies to strengthen
their growth prospects. Collaborations are likely to benefit even large
companies as they seek opportunities in developing countries to extend their
market reach.
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