ST. PAUL, Minnesota — Smiths Medical will stop selling its insulin pump and exit the diabetes market due to troubles with its parent company and changes in the diabetes market in the past three years – the first of what could be several changes at the St. Paul, Minn., medical device business.
Smiths stated in a release that the diabetes market has “little synergy with the rest of Smiths Medical’s businesses.” The Deltec Cozmo insulin pump was the company’s only direct-to-consumer product and required a separate sales force and staff.
“Without a strong, profitable diabetes business in the United States, the world’s largest medical market, it would also be impossible to sustain the business internationally,” the release stated.
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It will likely take four years for the company to completely exit the diabetes market because of warranty obligations on the device, company spokesman Bob Hanvik said.
Fifty-one people throughout the United States – mostly in sales – will lose their jobs as a result of the change. Smiths Medical employs 8,200 globally and 3,200 in the United States, Hanvik said. Its dozen brands including Portex, Medex and Jelco.
The announcement came on the same day that Smiths Medical’s parent company, the U.K.-based Smiths Group, announced falling profits that it blamed on the global economic slump. Smiths Group also stated it has started a total profitabily review of the Smiths Medical portfolio. Leaving the diabetes market was an early decision in that process, the company stated.
Three major changes in the diabetes market also triggered the exit, according to Smiths Medical:
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- The market has evolved from a hardware-plus-disposables model to an integrated diabetes management model, which would have required significant continued investments to keep pace.
- The company’s shrinking market share has been exacerbated by the “aggressive pursuit” in the market by Medtronic and Johnson & Johnson.
- Next-generation diabetes products would be costly and risk patent disputes because of the amount of intellectual property already around diabetes care.
The Web site DeltecCozmoUpdate.com will answer patient questions. Smiths Medical said it will meet all warranty obligations of its current users.