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An employee walks near an Abbott Laboratories sign at the company’s headquarters complex in Abbott Park, Illinois.
Abbott won big and early this new year.
Its FreeStyle Libre continuous glucose monitor received Medicare coverage, one month after it was launched, the company said Thursday. The decision comes and between 9 and 12 months ahead of Wall Street’s expectations, J.P. Morgan analyst Michael Weinstein wrote in a note following the announcement.
The product is the first continuous glucose monitor on the market that doesn’t require patients to prick their finger to draw blood. Analysts had expected Abbott to gain from FreeStyle Libre even before Thursday’s announcement because the company is aggressively pricing and marketing the new technology.
Yet they saw limits from patients having to pay for it out-of-pocket while Abbott waited for coverage approval from insurance companies and the Centers for Medicare & Medicaid Services. CMS oversees federal health programs such as Medicare and Medicaid.
J.P. Morgan on Tuesday had estimated FreeStyle Libre to generate $68 million in sales in 2018, with upside up to about $100 million if Abbott secured either commercial reimbursement, Medicare reimbursement, or labeling for kids earlier than expected.
The announcement pits Abbott against rival Dexcom in the battle for Medicare patients. Dexcom’s G5 system requires calibration, while Abbott’s does not. Dexcom expects to introduce its own system that doesn’t require fingerstick testing by the end of the year.
Medicare patients will choose between Abbott’s FreeStyle Libre and Dexcom’s G5 based on features and ease of use because the cost is the same, Weinstein wrote. Dexcom’s device has Bluetooth connectivity, but the feature isn’t available for Medicare patients.
“So for elderly Medicare patients, the choice is the very easy to use non-continuous Libre, or the somewhat more complicated G5, but without the online features,” Weinstein wrote. “As the price to the patient is the same, the easy to use option will certainly be appealing to an elderly population.”
Shares of Abbott about flat Thursday, while shares of Dexcom fell about 10 percent.