Diabetes diagnostics: Robust growth ahead
stockchecker on diabetes
Diabetes diagnostics:
Robust growth ahead
Two factors, an aging population and obesity among the young, are causing a rapid increase in type 2 diabetes. According to the Centers for Disease Control & Prevention in Atlanta, of the more than 2,000 new cases diagnosed daily throughout the 1990s, 90%-95% were type 2. Even more astonishing, its estimated that only 10 million of the 16 million people with diabetes have been diagnosedand thats a staggering number of untreated people.
The undiagnosed face potentially serious consequences. Uncontrolled glucose levels can cause circulatory problems, blindness, sexual dysfunction, heart disease, and nerve damage. Diabetes and diabetes-related conditions costs U.S. insurance companies and consumers an estimated $92+ billion each year.
Trends
Four factors are spurring growth in the testing market. First, obesity and inactive lifestyles have increased diabetes an alarming 76% among people in their thirties. A recent study in the Diabetes Care Journal reported that every kilogram (2.2 pounds) of extra weight raises the risk of diabetes 4.5%.
Second, the number of diagnosed patients is rising overall. Roche Diagnostics predicts that three million more patients will be diagnosed by 2005.
Third, the number of consumers testing their blood sugar levels is rising. Sales of meters and strips are projected to more than double within five years.
Lastly, consumers who do test themselves are testing more oftenup from an average 4.7 tests per week in 1996 to 6.9 tests per week in 2000. Thats a 24% increase in strip use, translating into 2.5 billions strips. Its great news for drugstoresthey attract frequent testers.
The market
The diabetes test market can only grow. New and innovative products, increased compliance, and an aging population will fuel sales. According to data from D. P. Hamacher & Associates, a division of NONSTOP Solutions Inc. (DPH&A), glucose testing strips hold the top five health and beauty care (HBC) positionsmore good news for drugstores whose share of strip sales grew 10.3% in the past year.
Strip sales are so important that manufacturers often make new monitors available to consumers at little or no cost to secure subsequent strip purchases. For example, Abbott Laboratories, the maker of MediSense Precision Q-I-D, offered customers $55 in rebates ($20 cash with a $35 trade-in). As a result, sales of strips and meters jumped 37%.
According to IMS Health, sales of meters and strips in 2000 increased 19.5% compared with the corresponding period in 1999. The following table shows the sales of the top 10 brands:
$ sales in 2000
$ sales in 1999
Total blood sugar tests
One Touch
Accu-Chek Comfort
Glucometer Elite
Accu-Chek Advantage
Precision Q-I-D
SureStep
Fast Take
MediSense
Glucometer Dex
Accu-Chek Instant
$1,503,300,000
$379,400,000
$214,000,000
$203,700,000
$166,700,000
$102,600,000
$73,500,000
$66,700,000
$52,700,000
$45,900,000
$28,000,000
$1,258,400,000
$392,700,000
$65,000,000
$57,000,000
$199,600,000
$74,600,000
$61,500,000
$42,300,000
$50,600,000
$11,600,000
$28,100,000
Consumers tend to be brand-loyal when buying blood glucose testing supplies, using the meters and strips recommended by their doctors. These consumers are, however, more price-driven than location-loyal. Although insurance covers part of the cost, strips are expensive, and saving $5 can prompt patients to switch stores.
Merchandising
DPH&A continues to advise moving diabetic care merchandise out onto the selling floor. According to the RDC Productivity and Profitability Analysis, stores that made the move increased department sales and profits by 31.4%. Although losses due to theft rose 2%, net profits climbed 9.5%.
Placing items on the selling floor gives customers better access to products and a better opportunity to respond to promotional offers and the economies of large-size packs. If space near the pharmacy cant accommodate a full selection of merchandise, consider this alternative: Place only the highest-volume products out front, and keep less popular and specialty items behind the counter.
Non-script diabetes customers generate 31% of sales, and these customers consider waiting in the pharmacy line inconvenient. A typical diabetes patient spends $3,500 annually in pharmaciesthree times the amount of the "average" consumer.
Importance of testing
Testing glucose levels four-plus times a day can greatly reduce the risk of complications, says the American Diabetes Association. Yet Diabetes Digest surveyed readers and found fewer than 53% of testors test more than nine times per week, citing expense and discomfort for not testing more often. The rising number of type 2 diabetes cases provides a strong incentive to educate both the public and newly diagnosed diabetics about the benefits of testing regularly. Help your customers form good habits. Impress on them the value of regular testing.
DIABETES CARE CATEGORY SUMMARY
Linear feet
Number of SKUs
Estimated sales per year
Estimated inventory retail
Estimated turnover
32
98
$136,000
$10,860
12
28
89
$133,500
$10,350
13
21
64
$121,000
$8,500
14
DIABETES CARE NEW ITEMS
Product
AtLast Blood Glucose System
AtLast Test Strips 50
Choice DM Bar 4 Crispy Berry Almond
Choice DM Bar 4 Crispy Peanut Butter
Choice DM Bar 4 Fudge/Brownie
Choice DM Bar 4 Peanut Butter/Chocolate
Choice DM Cereal 6 x 1.4oz Apple
Choice DM Cereal 6 x 1.4oz Maple
Choice DM Liquid 8oz 6-Pack Chocolate
Choice DM Liquid 8oz 6-Pack Vanilla
Excel GE Test Strips 50
Extend Bar 6 Chocolate Chip Crunch
Extend Bar 6 Peanut Butter Crunch
Freestyle Control Solution
Freestyle Monitoring System
Freestyle Test Strips 50, 100
SureStep Test Strips Foil 10, 50
Voyager Diabetic Needle Disposal
Amira Medical
Amira Medical
Bristol-Myers/Mead Johnson
Bristol-Myers/Mead Johnson
Bristol-Myers/Mead Johnson
Bristol-Myers/Mead Johnson
Bristol-Myers/Mead Johnson
Bristol-Myers/Mead Johnson
Bristol-Myers/Mead Johnson
Bristol-Myers/Mead Johnson
Can-Am Care Corp.
Clinical Products Ltd.
Clinical Products Ltd.
Therasense
Therasense
Therasense
Johnson & Johnson/LifeScan
Safe Medical
DIABETES CARE NEVER OUT LIST
Use this Never Out list to monitor your in-stock condition. The items listed account for more than 50% of the dollar sales in the diabetes care department. An out-of-stock on any of these items represents a significant loss of sales.
____ Accu-Chek Advantage Diabetes Care Kit
____ Accu-Chek Advantage Strip 50
____ Accu-Chek Advantage Strip 100
____ Accu-Chek Comfort Curve Strip 50
____ Accu-Chek Comfort Curve Strip 100
____ Accu-Chek Easy Strip 50
____ Accu-Chek Softclix Lancet 100
____ Accu-Chek Soft Touch Lancet 100
____ B-D 6895 Alcohol Swab 100
____ B-D 328230 Glucose Tablet 6
____ B-D Ultra Fine II Lancet 100
____ Fast Take System
____ Fast Take Test Strip 50
____ Fast Take Test Strip 100
____ Glucerna 6 x 8oz Vanilla
____ Glucometer Dex Sensor 50
____ Glucometer Elite Strip 50
____ Glucometer Elite Strip 100
____ Glucometer Elite XL Kit
____ Ketostix Strip 50
____ Microlet Lancet 100
____ Private Label Alcohol Swabs 100
____ Private Label Lancet 100
____ One Touch Basic System
____ One Touch Lancet 200
____ One Touch Test Strip Genuine 50
____ One Touch Test Strip Genuine 100
____ Precision QID Test Strip 50
____ Precision QID Test Strip 100
____ Soft Touch Lancet Device
____ Soft Touch Lancets 100
____ SureStep Test Strip 50
____ SureStep Test Strip 100
DIABETES CARE COMPETITIVE SHOP LIST
This list includes the most popular and price-sensitive SKUs in the diabetes care department. Use it to see if your prices on these key items fall within the average everyday retail range.
Item Everyday
Accu-Chek Advantage Strip 50
Accu-Chek Soft Touch Lancet 100
B-D 6895 Alcohol Swab 100
Fast Take Test Strip 50
Glucometer Elite Strip 50
One Touch Test Strip 50
Precision QID Test Strip 50
SureStep Test Strip 50
$37.99 $44.89
$9.99 $11.49
$1.99 $2.59
$35.69 $41.99
$37.99 $45.99
$35.99 $39.99
$38.99 $46.99
$36.99 $41.99
Sandra Levy. Diabetes diagnostics: Robust growth ahead.
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