Dive Brief:
- UnitedHealthcare is now covering insulin pumps from Tandem Diabetes in network for members on Medicare Advantage, Medicaid, individual and group market plans, the country's largest private payer confirmed in a Wednesday bulletin.
- Tandem's stock closed up 12% on Tuesday amid reports of the policy change, which analysts believe will add low- to mid-single-digit gains to the coming year's revenue.
- "There are no exceptions to in-network coverage of Tandem pumps for UnitedHealthcare members, but as always, coverage determinations and benefit plans can vary," a Tandem spokesperson said in an email to MedTech Dive.
Dive Insight:
Medtronic and UnitedHealthcare struck a deal in 2016 making the medtech giant's pumps the preferred option for the payer's members. That same year, Medtronic became the first device maker to win FDA approval for an automated insulin delivery system for people with Type 1 diabetes age 14 and older.
In 2018, the agency expanded that approval to include children as young as 7. Last February, UnitedHealthcare extended the preferred pump policy to children 7 and older going on pump therapy for the first time.
As options for diabetes technologies have further proliferated since the advent of the UnitedHealthcare-Medtronic agreement four years ago, and efforts to enable interoperability between different manufacturers' devices grow, the diabetes community has called for coverage policies that support patient choice.
UnitedHealthcare says its decision to prioritize Medtronic pumps is backed by "the comprehensive and rigorous body of clinical trial and real-world data" showing safety and efficacy of the MiniMed 670G system. Regardless, the setup between Medtronic and the payer had been panned by Type 1 diabetes research organization JDRF for restricting patient choice.
A campaign coordinated by the organization resulted in more than 100,000 messages being sent to the payer voicing support for greater access to a range of technologies, said JDRF's vice president of regulatory and health policy Campbell Hutton.
"Diabetes technology is not one-size-fits-all," Hutton told MedTech Dive. "This is a really big milestone and a big win for the community to have more choice."
Along with the change to Tandem coverage, Medtronic also secured a four-year, value-based agreement with UnitedHealthcare, a number of equity research analysts reported following an update from the company's investor relations team.
Analysts at Stifel noted that terms of coverage aren't entirely even for Tandem and Medtronic. Access to Tandem pumps will require pre-authorization, whereas Medtronic's agreement with the insurer bypasses those steps, the analysts reported in a note to investors Tuesday.
Tandem has previously said a positive coverage decision from UnitedHealthcare could increase its U.S. volumes somewhere in the low-to-mid single-digits, the analysts noted, adding that those comments probably "reflected some conservatism, but also did not likely contemplate the 'backstops' [Medtronic] was able to negotiate."
Cowen analysts appeared slightly more optimistic about the impact of the decision for Tandem.
"While [Medtronic] has noted it will retain certain upfront paperwork advantages, ultimately, the decision of what pump to use is now back in the hands of patients/physicians within [UnitedHealthcare] (as it should be)," the Cowen team wrote Tuesday. "With a largely level playing field, we expect Control-IQ to drive tremendous share gains."
