Dexcom Inc.

dexcom

Dexcom dominates its market with its continuous glucose monitoring products.

By Alan Dorich

Doctors need technology they can rely on when providing care to those with type 1 diabetes, and for nearly 20 years, Dexcom Inc. has met that need. “We are the leader in continuous glucose monitoring technology,” Senior Vice President of Operations Jeffrey Moy declares.

San Diego-based Dexcom provides continuous glucose monitoring (CGM) system for patients and healthcare professionals in the management of diabetes. “Our latest generation product permitted for marketing by the FDA requires no fingersticks for patients to make decisions about their treatment,” he says.

“Our first product was commercialized more than 10 years ago, so we have the most experience in the real-time CGM market,” Moy continues, explaining that the company started operations in 1999. 

Over time, the company moved away from implantable sensors for monitoring glucose to sensors the width of a human hair that patients can painlessly apply themselves and change every 10 days. “So easy to use it doesn’t require a doctor to have this performed,” says Moy. 

The CGM also can transfer its data results via Bluetooth to a dedicated receiver, on a smartphone, or Apple Watch. “The whole idea is we can provide the convenience and discretion to the patient,” he says.

When the user wants to give that information to others, Dexcom also offers Follow, an application that allows patients to send the information to trusted individuals. “From your cell phone one can send that data directly to someone else’s mobile device continuously real-time,” he describes, noting that the company’s systems can warn loved ones if the patient’s glucose levels become dangerous.

“These warnings can be sent to the patients’ family members or friends even if they live in different states or countries.” Moy says. 

Leading the Way

Today, Dexcom’s products are available through prescriptions. “We’ll send it through distributors or 3PLs (Third-party logistics) directly,” says Moy, noting that some pharmacies also carry its devices. “That’s an area we’re looking to expand into, because we believe it’s a proper and more efficient distribution system.”

He adds that Dexcom stands as a market leader, since it was the first to open up the CGM category with its product. “Dexcom worked with the FDA, to allow us to operate with items such as pumps, pens or items that people with diabetes would be using to manage their care.”

But like many firms, Dexcom makes regular changes to its technology. “We are always in the process of retooling,” says Moy, noting that that changeovers from generation to generation of the company’s products can be challenging. 

Although the company outsources a large amount of its production, it often has to build the automated equipment to support its manufacture. “Our product is unique,” he says. “Our ability to look forward enough at next generation products and how we [phase out] old generations also is a continual challenge.”

The company is also reducing its product costs. So far, “Moving some of our sub-assembly work to low cost regions has helped us,” he says. “We’re also partnering with third-party logistics to make sure we are leveraging against other logistics organizations.”

Safe and Sound

Dexcom makes sure it has safety stock in its inventory. “We do that because it’s fairly difficult to predict our sales patterns because we’re driven in the United States by insurance coverage,” he explains.

Many insurance companies across the world place Dexcom’s products under the durable medical equipment classification. Once the patients meet the deductible, “The product is low cost or no cost,” he says.

When that happens, sales often go up. “Patients are basically stocking up products,” Moy explains, noting that the company usually experiences a non-linear growth pattern. “For that reason, we have opted to carry safety stock levels.”

Close Partners

Dexcom values strong partnerships with its suppliers. “We’ll get our key suppliers involved early on in the design and development,” Moy says, noting that many of its capital expenditures reside at the supplier.

“So, for us to be successful, we have to engage with them much, much earlier in the cycle,” he says. “The vast majority of our product is custom to our design.”

Because the company is FDA regulated, it also is limited in the suppliers that it able to choose from. “We have to have a pretty rigorous qualification process,” he says. 

Aiming to Grow

Moy is a 35-year veteran of the medical devices industry. “This has been my space,” he says, noting that he earned his Master of Engineering degree in Biochemical Engineering and his Bachelor of Science in Bioengineering before later joining Dexcom. 

The company, he notes, was the first firm he worked for that produced a personal medical device, versus something that is used in a hospital. “People treat it like it’s a personal consumer electronic product,” he says.

Moy praises Dexcom’s technology. “We have a true CGM, where you get continuous data,” he says, explaining that the wearer does not have to do anything to get the device to generate the results. “Once you get the system started, you can get the glucose readings day and night.”

The company also will continue advancing its technology, Moy predicts. “We haven’t reached what I call ‘the end point’ of this technology.” 

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