Good morning, everyone. Sorry, we had some technical difficulties getting started. I'm going to pass around a sign-in sheet. If you could put your name and firm on that, I would appreciate it. Going one on each side here. I think most of you know me. I'm Ryan Weispfenning, Managing Vice President of Investor Relations at Medtronic. Thanks for coming to our Diabetes Group session here at ADA. Welcome to those joining us now on the webcast around the world. Before we get started, I want to note that we could make some forward-looking statements today. Put the slide up. Actual results might differ materially from those projected in any forward-looking statement.
Additional information concerning factors that could cause actual results to differ is contained in our periodic reports and other filings that we make with the SEC. We do not undertake to update any forward-looking statement. This morning, we have about an hour. We'll start with prepared remarks, and then afterwards, we'll be happy to take your questions. With that, I'm pleased to welcome Hooman Hakami , our Executive Vice President and President of our Diabetes Group. Hooman will make some introductory remarks. He'll introduce the team, and then we'll take your questions. Hooman.
Great. Thanks, Ryan. Good morning, everybody. It's great to see everybody here. Let me actually start by introducing the team that is here. To my far right is Suzanne Winter. Suzanne runs our Americas region for Diabetes. To her left is Dr. Fran Kaufman. She probably needs no introduction, but she is our Chief Medical Officer for the Diabetes Group. To my immediate left is Ali Dianaty. Ali is our Vice President of Global R&D. Next to him is Laura Stoltenberg. Laura is the General Manager and Vice President for our Multiple Daily Injection Solutions business. This is a new business, and Laura will speak to you about that. To Laura's left is Sheri Dodd. Sheri is responsible for our Non-Intensive Diabetes Therapies business, and you'll hear from her as well.
Let me just paint a little bit of an overview here with respect to the group, and then I'll actually dive into our core business and then turn it over to my colleagues who will talk about their business units. We at Investor Day kind of talked about our business. I'm really not going to run through the same set of charts from Investor Day. Maybe start with essentially a recap of what we discussed and some of the key themes that we went through during the Investor Day. The first one is that obviously within Medtronic, we have this incredible legacy, we have this incredible brand. Our performance, particularly over the last four years, while we've had some sort of turbulence and some issues, has actually been really quite strong.
Strong to the point where we have enjoyed our highest share in close to a decade, in fact. Our highest market share in close to a decade. When we take a look at what's in front of us over the next few years, while that share position is good, we actually think our best days are in front of us and that in many ways, we're just getting started. There's a number of different growth drivers that we talked about during the Analyst Day that I think are going to be catalysts for us to actually deliver above corporate average growth for Medtronic, and I'll just run through a couple of them. The first is that the 670G is still in the early innings. This is a product that in many ways is just still in its infancy.
What's amazing about it is that over a 12-month period, we've shipped 100,000 systems. The feedback we're getting is incredible. We're accumulating a massive amount of data, all of this data points to the same thing, which is the results that we saw in our pivotal are holding. The time and range for patients is outstanding. The sensor performance is outstanding. We're incredibly excited by this, but it's still early. In the U.S. where we've launched this product, we think there's a tremendous runway in front of us. Just this week, we also received CE marking for the 670G, so the international expansion opportunities for 670G are big and large. Those two things are just one element of why we're confident about our growth.
The other element with respect to the growth that is a real catalyst for us is CGM and CGM attachment. Let me start with that first. As we sell more and more advanced systems like the 670G that rely on continuous glucose monitors, what we are seeing is an uptick in sensor utilization, sensor attachment, that uptick in both attachment and utilization is a key catalyst for our growth. We're already starting to see that dynamic play out, we see that dynamic will continue to play out, particularly as the install base for 670G grows around the world. The other element tied to CGM that we think is a big catalyst is our entry into the standalone CGM market. This is a market that is today $1 billion. It's growing in the neighborhood of about 50%, we're really excited about our Guardian Connect product with Sugar.IQ.
We think we have some real differentiators that will allow us to penetrate this market. As I said during the comments at the Analyst Day, we're starting from zero. Pick any share and penetration numbers that you'd like, we think that no matter what the share position is, it's going to be meaningful growth for Medtronic Diabetes and for Medtronic overall. The last thing is that not only are we excited by our ability to grow and our ability to be accretive to Medtronic overall, we're excited about the sustainability of that growth. There's a tremendous set of barriers to entry and barriers to competition within the diabetes space. Our competitors are obviously dealing with those. In many ways, we feel like we have overcome those barriers around customer service, around the infrastructure required, around scalability on a global perspective.
Because we have actually crossed those barriers that our competitors are still trying to figure out, we believe that our growth rate is not only doable, but it's also sustainable. Those were at a high level, the comments and the themes that we talked about during the Investor Day. The other thing I'll set up is just a reminder of our new organization structure as we enter the new fiscal year. With the start of this new fiscal year, we took a fresh look at our organizational structure, our organizational construct, how we were organized, and we actually redesigned our group to basically reflect our ability to serve more patients across the entire diabetes care continuum. We have three business units, Advanced Insulin Management, that is led by Alejandro Galindo. Alejandro sends his apologies. He's actually on vacation.
He runs that business unit, and you can see the products that are within that business unit. I'll talk a little bit more about AIM in a second. We have two additional business unit that we will, from a reporting perspective, consolidate into what we will call Emerging Technologies. Those business units are our Multiple Daily Injection Solution business unit, which as I mentioned, Laura runs and Laura will talk about in a few minutes. Our Non-Intensive Diabetes Therapies business unit, which Sheri runs and which Sheri will talk about. We're excited about all this. You see the products, but what really this allows us to do is span the entire diabetes continuum. If you look at the legacy of Medtronic and from where we came, we were a Type 1 pump and sensor business.
If you were going to parse it even further, we were a developed market, Type 1 pump and sensor business. Through innovation, through our R&D pipeline, we have actually now have products that serve all patients across the diabetes continuum, from the most intensively managed Type 1 patient to the most non-intensive Type 2 patient and everything else in between, and our structure reflects that. Now let me talk a little bit about our Advanced Insulin Management business unit. This is our core business. This is really the legacy of Medtronic and Medtronic diabetes. This represents the bulk, actually, of our revenue. All of the pumps, all of the associated sensors that go with those pumps, all of the consumables and the infusion sets and the reservoirs that are part of those pumps and the pump systems are within this business unit.
You can see in terms of the share overall, we enjoy a large market share. What's interesting about this business unit and why I say in many ways we're just getting started, if you think about pump penetration around the world, overall, pump penetration is only 8%. That means basically for every 100 patients, 92 of them are still injecting their insulin manually around the world. This represents an enormous opportunity for us to drive growth in our core business, our single largest business, and this is why we're excited by this. Especially as you think about what the vision for this business is, which is to make artificial pancreas not only a reality but also the standard of care. Let's talk about a few things.
As I said, I'm not going to spend time going through the charts from the Analyst Day because I think you got a sense of those charts from that presentation. I'm going to talk actually more about some of the things that we're really excited about in the short term, some of the things that we've talked about here within ADA, then end with a little bit of a view into how we're thinking about the future. One of the things that we're incredibly excited about that was announced here is that our 670G has extended and expanded its indication. We now have indication for children seven and above. Fran, obviously from a clinical perspective, is incredibly excited about this.
From a business standpoint, this is incredibly exciting because it allows us to go after, from a commercial perspective, a broad patient population in Type 1 in the U.S. This is very exciting for the business. It's certainly exciting for our commercial teams and our clinical teams. This is just one more reason that why in the short term, we really do feel excited about our growth opportunities for our core business, starting with the most developed market here in the U.S. The other thing that was just announced that I alluded to just a second ago is that the 670G has just received CE mark approval in Europe. Our international expansion efforts and commercialization efforts of this new technology are starting. You can expect to see us ramp up commercial activation for this product this calendar year.
We're going to start with Europe and start to aggressively ramp up there. This gives us another catalyst for growth as we think about certainly FY 2019, but even beyond into FY 2020 and FY 2021. The other thing that you'll hear from us, we talked a little bit about this during one of the panels during the Investor Day, is not only innovation from a product perspective, but innovation also from a business model perspective. I want to just touch a little bit on what you're going to hear from us with respect to our partnership with United. We're getting results back from our preferred partnership and our value-based healthcare agreement with United, and these results, I think, are noteworthy. There were two parts to this agreement with United.
The first part of the agreement was that United, because our system was the only one, the only system in the market that actually controlled the delivery of insulin based on glucose values, we became the preferred partner for United. That was the first part of the agreement. You can see from the top part of the chart what the impact of that preferred partnership has meant to Medtronic. Our market share within United has gone up from 70% to 92%. Revenue for us has gone up, and it's been accretive. It's been accretive from a profitability perspective. That part of the agreement has been wildly successful, and we're obviously very pleased with how that's gone. There was also a second component to that agreement. There was a value-based healthcare component to that agreement.
The value-based healthcare component to that agreement essentially took a look at the benefits of pump therapy and compared it with matched cohorts that were on multiple daily injections. To the extent that pump therapy actually drove benefit versus patients who were on multiple daily injections, we actually were able to share in some of those benefits with United. Over the past 12 months, we have worked with United to actually do the analytics to assess the impact that pump therapy has had on patients in the United book of business and compare those to like multiple daily injection cohorts. After a year's worth of work, we have our first year of results, and you can see the results are actually impressive.
Let me just point out before I go into what those results are, is that these results are largely without the benefit of 670G. The vast majority of these patients that made up these results were on our 630G system or our 530G system. The results that we have here don't even have the incremental benefit that we see from 670G. Even without 670G, what we saw over the first year from United is pretty remarkable. When we looked at patients who are on our pump therapy versus those patients that were on multiple daily injections, what we saw was a 27% reduction in preventable hospitalizations. Those patients that were on pump therapy had 27% fewer preventable hospitalizations than matched MDI patients. The other thing that was really remarkable was when we looked at the total cost of care.
When we compared the total cost of care for patients that were on pump therapy versus like patients that were on multiple daily injection, what we saw was a reduction in the overall cost of care, up to, as it says, 14% reduction in total cost of care. As a result of the savings that we were able to generate for United for the patients that were on pump therapy, Medtronic was able to share in those savings with United. This is a perfect example of value-based healthcare contracting. It's a perfect example of tying really a business model to outcomes. This is something that obviously has benefited us. It has clearly benefited United. It has clearly benefited patients, and this is something we're going to do more and more of.
The other thing that you're going to hear from us is as a result of the outcomes that we see with our 670G system, as a result of the success that we've seen in United, our commitment to value-based healthcare contracting and tying our products to outcomes, you're going to see different types of business models and different types of offerings from us. One of them that we're talking about here at ADA is our 670G performance guarantee.
Based on the outcomes that we see with the 670G, because this system is designed to keep a patient in range for longer, because this system is designed actually to minimize highs and lows and minimize those excursions, and because of the data, the compelling data that we see from the millions of patient days that we have in our CareLink system, we're actually ready to stand behind this system through a business model. What this business model essentially says is that if there is a hospitalization, a diabetes-related inpatient hospitalization, or a diabetes-related emergency room visit for a patient that's on the 670G, we'll reimburse it. We'll reimburse it up to a cap of $25,000 over a four-year period. There is no other diabetes company that can say this or do this.
The reason there is no other company that can say this or do this is because no other company has the benefit of a system that actually keeps a patient in the right glycemic control. There is no other company that has the data that we do that demonstrates the value of that control. This is something that we think the community is going to embrace. We really think this is something that the payer community will get excited by. It's something that I think is a further indication of our commitment to value-based healthcare programs, value-based healthcare contracting, and not just driving fee-for-service, but actually selling outcomes. Look, this is just some examples of the here and now.
We talked about this, maybe this is the only slide from the Investor Day in AIM that I will touch on here. We're not done. By no stretch of the imagination do we feel that our work is done. In many ways, we actually feel like we're just getting started. We really want, as it says on the right-hand side of this page, within this business unit is to really create a system that requires no patient interaction for insulin delivery. Just think about those words. No patient interaction for insulin delivery. We want to create a system where the consumables, when I say consumables, it's certainly the infusion set, the reservoir, but also the sensor. They're simple, they're discreet. They're something that the patient puts on and then forgets about. That's another goal that we have for this business unit.
Most importantly, we want to actually create a system that's truly personalized for that patient. Not just in terms of the hardware, but more importantly in terms of the algorithms that drive that system so that that individual patient can get the absolute best outcomes possible. That's what we're committed to. When you take a look at the roadmap, I'm certainly not going to go through every one of these things, but what you're going to see from us in the near term and over our strategic planning period are some noteworthy things. Our next iteration of the pump is going to be Bluetooth-enabled, and eventually smartphone-controlled. Our new sensors that you will see coming out from us are going to be smaller, longer-wear. I know everybody is interested in this, that yes, they will not require fingersticks.
Beyond those kinds of things, they'll also be more convenient for the patient in that we aim to integrate them with the infusion set. We're going to have algorithms. Those algorithms are going to take away burden from the patient. Burden that starts with doing things like eliminating the correction bolus, but even taking it further so that those algorithms are more and more personalized to the needs of that patient and provide more and more insights and predictive diagnostics that are unique for the patient. Finally, the other area of innovation that we're going to drive are proactive services. These are proactive services that are going to help both patients and providers achieve better results and drive lower costs for our healthcare system. In our core business, we're incredibly excited about not only the present, but also the future.
We have some exciting developments that we're really proud of here at ADA. We're excited by the pipeline that we have, and I think it's a rich pipeline that is going to allow us to continue to build on this incredible legacy that is MiniMed. With that, what I'd like to do is introduce Laura Stoltenberg and have her take you through our new Multiple Daily Injection Solution business unit.
All right. Thank you, Hooman. Good morning, everybody. Similarly, I would like to use this opportunity to go beyond what we talked about in Investor Day and specifically dive more into why we call our standalone CGM solution smart and really believe that we're creating a new category of CGM. As you can see, our goal focused on those patients who are injecting insulin is to create smart, connected solutions that really empower the patient. As you know, actually we had commercially launched Guardian Connect in the U.S. at Investor Day in New York City. Now we are fully launched, meaning we are shipping the unit. We're very excited about that. That means that we have the full force of our commercial team globally behind Guardian Connect.
As Hooman introduced Suzanne Winter, who manages the Americas, just as an example, one of our competitive differentiators really is the few thousand people in the Americas, both in the field, clinical, territory managers, as well as all of our customer support. This is in their bag. We are leveraging the relationships that we have with endocrinologists and primary care and really being able to offer a full portfolio of products now with Guardian Connect. One of the things that we've talked about is the Sugar.IQ app that we partnered with IBM Watson. I'd like to take a few minutes to talk a little bit more about what that is and why we're so excited about it and what it means to truly differentiate CGM. We're really going beyond just providing a glucose number every five minutes.
We really want to take burden off of patients to empower them. What I'd like to do is share with you a short video and then maybe go into a couple examples, real life examples now that we're shipped of some patient experiences with Sugar.IQ.
I'm a morning person now, but I haven't always been. When you have diabetes, mornings aren't always predictable. Since I started using the Sugar.IQ diabetes assistant with my Guardian Connect CGM, I not only manage my highs and lows, but I actually outsmart them. Hmm, looks like I'll need this to power me through my morning run. It's really helpful to have the Sugar.IQ Assistant continually analyzing my glucose and insulin data, especially since I started training for a half marathon. Let's see what looks good here. With a big meeting this afternoon, I want to make sure I feel my best. Better go with a smaller meal. Sugar.IQ helps me make confident, data-backed decisions with personalized tips and insights. The Sugar.IQ Assistant has one-of-a-kind technology that gives me a full picture of my diabetes. Awesome.
With the Sugar.IQ Assistant, days and nights are more predictable, at least when it comes to managing my diabetes. Date nights, on the other hand, still call for a few surprises.
Hopefully, that gives you an idea of Sugar.IQ. A couple of things that I want to point out in that. The beauty of innovation is sometimes it makes things look really, really simple. Hopefully, you took away the beauty and the simplicity of what we're trying to do with Sugar.IQ and Guardian Connect. There's a lot of innovation behind it. Just as I get into this example, just to pull out a couple of elements of the innovation. One is, as you saw from the screenshot, we're actually pulling in Guardian Connect information into Sugar.IQ, but it's much more than that. We're smart the way we food log. Rather than depending on carb counting, it's a really easy and intuitive way to log meals.
In this example, we actually have a type 1 who's on the MiniMed 670G, who has been using Sugar.IQ to get that extra level of insight. Beyond what you just heard as far as good glucose control. Used to kind of carb counting and doing these mini experiments of what food triggers what type of glucose response. What we do in our smart logging is go beyond that. Right now, you can see she logged peanut butter. It's not just about the carbs, it's about how carbs interact with fiber, that interact with protein, that interact with stress and the different times of day.
While this particular woman with type 1 diabetes, she was tracking her spikes but didn't really understand, and you think she should have, but she really didn't understand, after 20 years of diabetes, what in her diet and how the foods interact. Only after 2 days of using Sugar.IQ, sure enough, this insight popped up and said, "Did you know," because we're running artificial intelligence in the background and doing all of these correlations, "that it is in fact peanut butter, not the toast that you're putting it on," because it's peanut butter with an apple, peanut butter with toast, that matters. Because of that, she was able to make some adjustments to both her bolus as well as her diet. The other aspect that we're doing as far as intelligence in Sugar.IQ is how we interact with the patients and with the users.
It's not alarm fatigue, it's not data fatigue. What these insights are they're smart in and of themselves. They're designed to be meaningful, they're designed to be unique, and they're designed to get customized based on how the user interacts. As soon as you start logging the food, as I mentioned, this popped up in 2 days, you start getting insights, but then as you use Sugar.IQ with Guardian Connect, they become to be refined because the users can say, "Hey, I really like this insight. This was helpful. I want more like these," or, "No, I don't." What we're really doing here is taking the data out of CGM and making it useful to take what people typically do in MDI as far as I'm going to try this, then I'm going to try that with my CGM, and make it much easier.
What we've done in just actually there was an oral presentation this week at ADA with some results of Sugar.IQ. We did launch Sugar.IQ to a select patient population. Actually, they were on MiniMed 670G, and using our sensor along with Sugar.IQ. These patients being on MiniMed 670G were already in relatively good control, and we're able to demonstrate, even with being on a Medtronic insulin pump, these insights can make a difference for all the reasons that I mentioned. As you can see, time in range improved by reducing the time in hyper and hypos. What this translates to is about a 10% reduction of hyper and hypo, as well as a reduction in the number of episodes.
It really is the power and the fact that data can be a therapy in and of itself because this is about educating and empowering patients so they can make the right decisions throughout the day. Similar to what Hooman mentioned as far as AIM, we're just launching this, very excited about it. Truly believe this is a differentiator in the standalone CGM marketplace, it really is a platform for us to build on. We're not stopping here. We're building upon the insulin insights, food, motivation, and routine, as well as what I talked about with the glycemic [access] and going beyond that. Our next generation will extend predictive alerts and insights beyond the 60 minutes that we have with Guardian Connect today for up to 4 hours. Again, this is like a weather forecast.
We've talked to a lot of physicians here this week. Their patients ask them, "I'm going up on a telephone pole because I'm a telephone repairman. I'd really like to know if I'm going to be at risk, so I can pack in some extra sugar, or I might not get in the car today for that 4-hour drive. I want to be able, with confidence, to be able to look ahead to understand where is my glycemic control going, and how can I manage it?" That's really where we're focused to empower patients. Similarly, we have a roadmap really across both product, insight, innovation, as well as patient engagement. Similarly, from a CGM perspective, we're all about making the CGM easier to use, more affordable, and discreet. Then as that hardware innovation, we have the pipeline of insight, innovation, and 360 data.
In addition, we're getting great feedback not only from how this empowers patients, but because it takes a lot of the guesswork out for patients, that also helps the physicians. Because a lot of times, the physicians might get a call, "Oh, I'm seeing my CGM number go up. I don't know why." It takes time for a clinical diabetes educator or a physician to walk a patient through, "Hey, why don't you try this? Why don't you try that?" What Sugar.IQ does is becomes that detective for the patients themselves. Physicians, and that's why we call it 360 guidance is that Another differentiator is that we're really incorporating complete care from the patient to the physician to the technology.
Hopefully, that gives you another level of detail of why we're excited about smart CGM as a new category, and how Guardian Connect and Sugar.IQ really helps be one of the growth drivers for the diabetes business going forward. Sheri?
Thanks, Laura. NDT, part of the portfolio, new general manager, very excited. As Hooman mentioned, it's a large segment of the population, highly under-penetrated. Great place to join as a general manager. You can only go up. What gets me really excited about the role is actually the patient in the center. The patient in the center actually represents the comorbid chronic patient. I'm currently the general manager of the Medtronic Care Management Services business and am taking on additional role responsibilities with the NDT business. The focus is clear about the patient. This patient population represents about 70% of the U.S. healthcare costs and about 30% of the population. A good portion of this population is diabetic, but they're not just diabetic. They have heart failure, they have COPD, they have hypertension, they have mental health concerns.
The management of this population isn't just about management of diabetes, it's about more holistically managing the population. The Medtronic Care Management Services business has been in existence for 19 years. It was an acquisition Medtronic made about five years ago. 5.6 million telehealth patient months of service, managing 95,000 patients today. If you consider the population of the 95,000 patients, about 50% of them have diabetes. We're currently managing these diabetic patients, but we're not doing it with all the tools that actually would allow our service to be even more effective. When we take the NDT business on the side where you've got products like professional CGM, you've got Pattern Snapshot, and we just launched FoodPrint, which is a tremendous tool that actually allows the patient's meals to be graded and actually mapped to the role of food and glucose.
It's a tremendous opportunity to bring these two businesses together and look at the strategic opportunities for improving outcomes and reducing costs for this population. How are we going to do that? If you think about the work is actually in multiple levels of risk stratification. MCMS today is currently risk stratifying this complex chronic comorbid population, and it's putting it into cohorts. The next level cohorts is actually determining, based on other factors, are they a heart failure COPD patient? Are they a diabetic hypertensive patient? Actually further refining truly what that population looks like. When you add the opportunity of a device like an iPro, you actually have another opportunity to risk stratify the population and find a very discreet population that needs better diabetes management, but also more holistic management of their real life, which again, could involve a number of comorbidities.
When we put the risk stratification together along with the right tools, we're able to segment out a high acuity population, a medium acuity population, and a low acuity population, and really put these services together. For example, you could use the remote patient monitoring program and actually identify a population of which Guardian Connect could be a tremendous tool for both the sensor data as well as the ongoing insights to best management of that population. Taking the MiniMed 670G and bringing that data in, again, to a more holistic platform and managing that patient more holistically is an obvious opportunity. When we focus on some of the mid-level acuity and the low-level acuity, there's entirely different type of care management opportunities there.
Using Guardian Connect and Sugar.IQ, as Laura presented, as a potential tool, using Inner Circle and patient coaching, another opportunity. You couple that up with the opportunity for remote patient monitoring. Some of the patients in mid acuity go through intense periods where they actually need more monitoring, then they can graduate down to a lower touch monitoring and back and down, and back and down. If you turn it around from the patient experience, they're actually having a continuous experience with the Medtronic platform versus currently, the care management tools in the market are very fragmented and maybe ask multiple questions. There tend to be just tools and devices that are gathering individual data points versus putting all those data points together that actually inform a care plan. The low acuity patient.
Using iPro2 to actually be at the starting point for identifying patients that may need to go on patient coaching or may actually need to go on different types of monitoring for their food and education that way. Tremendous opportunity strategically to bring the benefits of what we've been doing in Medtronic Care Management Services over into the NDT business. What does our portfolio look like? Right now, as you can see, we've launched and are driving growth in iPro using Pattern Snapshot, as well as the FoodPrint, which we launched, and really having a robust way in making it very easy for patients and physicians to really understand the relationship between their continuous glucose monitoring and their food, and to put together what that care plan looks like.
Coming up in FY 2019 and FY 2020, we'll be having Pattern Snapshot 2, which is an enhanced version of our current Pattern Snapshot, again, bringing more insight to patterns that are happening with the CGM, including counsel for the variability, as well as medication adjustment options that a physician could think about with their patient. We're also looking forward to expanding our relationship with Nutrino. Nutrino has been our partner in FoodPrint and the next generation in terms of what could that relationship look like in building out services and solutions in that area. Then we're very excited about Envision Pro, which will be our next generation iPro, which is disposable, non-calibration, and Bluetooth. When we look at beyond that, lots of opportunities and actually looking at real-time coaching, as well as bringing forward a real-time Envision Pro professional continuous glucose monitor.
I'm excited about the portfolio. I'm thrilled to be part of the diabetes organization and the strategic alignment of taking the best of what we've been doing in the care management services business, coupled with the portfolio of the MDT. We have a tremendous amount of opportunity and looking forward to where this takes us.
Great. Thanks, Sheri. I'll just wrap up here. Just a couple slides to wrap up. In every single one of our business units, we really have a similar approach, and that approach starts with innovation. We have innovated with respect to our core business over two decades. If you think about the first pump, if you think about the first sensor, if you think about the first sensor-augmented pump, if you think about a sensor and a pump working together to suspend the delivery of insulin when a patient hits a predetermined low, all the way now to the first hybrid closed loop system, there has been a constant flow of therapy innovation, and that flow is not going to stop. We are going to continue to invest in R&D to push the envelope with respect to what's possible in diabetes from an innovation perspective.
For us, it doesn't end with hardware. It's not just about hardware because you just look at diabetes landscape over the last 20 years, look at it over the last four years. There has been an explosion of innovation in the diabetes landscape over the last four years, and the cost of diabetes continue to go up. The outcomes related to diabetes do not get better. It is not just about hardware. For us, it's taking that history of innovation and continuing to lead with respect to innovation, but coupling that innovation with a few key things. The first one is decision support.
Everything that we talked about with respect to the sophisticated algorithms in the 670G, everything that we talked about with respect to artificial intelligence that powers Sugar.IQ in our MDIS business, and everything that Sheri talked about with respect to the tools like Pattern Snapshot that are there to aid physicians and patients is about decision support. Taking data and turning it into insights that people can act on. Even those two things, innovation and decision support, are not enough. Diabetes is a disease that isn't managed in the clinician's office. It's great if they're prescribed something, and it's great if they're given some tools and some advice in the 15 minutes that they have with their endocrinologist and their primary care physician. 99% of diabetes management happens in between those physician visits. It's about how you engage that patient that will truly drive ultimate success.
Patient engagement is another key area and another key strategy for us. We talked about the Inner Circle patient engagement program that's almost like frequent flyer miles for patients at Investor Day. That's one example of patient engagement. Engaging with them with FoodPrint and helping them understand that a bowl of cereal may be a D for you in terms of how it affects your glucose. Oddly, this banana that you thought spikes your glucose up may not be so bad for you. Engaging with patients so that they understand how diet impacts their glycemic levels is another example of patient engagement. All of the remote patient monitoring tools that MCMS has that Sheri talked about are just one more example of patient engagement.
Our strategy is to take therapy innovation, continued leadership in R&D, couple it with decision support, and wrap around that sophisticated patient engagement tools, and put all of those things together with unique business models that are tied to outcomes for payers, for providers, and for employers in order to create a truly holistic solution that we believe in the end will drive to better outcomes and lower costs for diabetes. From a business standpoint, we continue to be excited about the prospects for the business. As I mentioned, there's a number of key growth drivers, and hopefully, you got a sense of this. Our core business is just getting started. 670G is just getting started. What we have in the U.S. is great, but it has tremendous opportunities for growth. We're launching outside of the U.S.
We're getting incredible attachment rates from CGM, which will continue to drive growth in addition to the pump revenue that we will see. Our entry into the standalone CGM business into this $1 billion market that's growing at 50%, we think is going to be a meaningful contributor for our future growth as well. Over kind of the mid to long term, as you think about the potential As we expand into type 2 and really start to think about holistic patient management with Sheri's business, that's another catalyst that we believe represents a huge growth opportunity for us. We continue to be incredibly excited by what's in front of us. We continue to be excited about what's ahead of us, and we really think that we have a fantastic business and our best days are ahead.
Thanks for your time, and would love to take some questions together with my colleagues here.
Joanne.
Thanks.
Yeah.
Sure. Thank you, Joanne Wuensch from BMO. My understanding is that the pump market in Europe is relatively in its infancy. How do you think about developing that market and pricing the 670G into it?
Yeah, that's a good question, Joanne. If you take a look at our experience with the 640G, in Europe over the last three or four years, we've seen just some incredible penetration of pump therapy. I think what we are getting, in Europe is a broader and deeper understanding of the benefits of algorithms that tie the pump and the sensor together to drive control. I think all you need to look at is the 640G experience as a predicate. We were able to see some really great growth out of our European business for four years, essentially, since the introduction of the 640G. I would absolutely only expect that to continue as we launch 670G. Pricing, I don't see a difference with respect to pricing on 670G.
My second question is on the standalone sensor for no finger stick. What is your definition of near term and the timing for that?
It's consistent with what we've talked about at Investor Day. When we talk near term, we're talking FY 2019, FY 2020. Yeah.
Bruce.
Bruce Ziental, SunTrust. Hooman, I had two questions. One is on the 670G guarantee. How powerful a commercial impact could that have in a competitive context? Also, could you just discuss your kind of sensor roadmap with regards to calibration and combined infusion and measurement?
Sure. Bruce, I'll do that with the help of some colleagues, Suzanne Winter, our Americas leader, and Ali Dianaty, our R&D leader. I'll start it off. We're just launching the guarantee. We've done research around this. We think it's a compelling value proposition for payers, certainly. We'll see how this goes as we engage with payers. I think it's a compelling value proposition, and I think it's something that nobody else can actually do. If you take a look, our experience with UnitedHealthcare, our experience as we take a look at claims data, those are the single biggest costs related to diabetes, the inpatient visits and the emergency room visits. For us to be able to guarantee those costs for patients that are wearing the 670G, I'm hoping will be a compelling offering. I don't know. Suzanne?
Research with our payers, they're very interested in this. They're interested in it for a couple of different reasons. One, as Hooman pointed out, the inpatient visits and the ER visits are a big cost driver for diabetes patients. To be able to have some predictability of cost and the confidence that the therapy that they're providing to their members is very strong. That drives the interest. I think that overall, we're going to have conversations with each one of our payers. Our opportunity really is to get into a partnership, a value-based partnership that's easy to operationalize, too. This is one value-based approach that is easy and easy to operationalize from their standpoint and also ours.
With respect to the R&D roadmap, Ali?
Getting to that final version that you described with the combination set, it really is the amalgamation of three technologies as one. One is, of course, no-calibration. The second is the new form factor for the sensor. Last, we're extending the wear of the set itself to seven days in order to make it all work. Each of those have their own disparate paths, the longest at the moment being the ability to get to the seven-day set. We're in discussions with the agency now to start to set up that clinical trial, and we'll see how it goes. The goal is for us to start that clinical trial before the end of this fiscal year.
Could you just explain the significance of adaptive calibration?
The significance of that would be essentially to keep it competitive against no finger sticks, essentially. The reason why we're calling it adaptive calibration is in a world with something like automatic bolusing, as an example, there may be a need for higher fidelity information at that point in time, and that's why we're calling it adaptive. As a safeguard against hypoglycemia, knowing that we have this broader notion of outcomes, we want to make sure that we have a means of having diagnostics in the sensor to manage that. Sure.
Mathew Blackman with Stifel. I just wanted to follow up on Bruce's question. Do you think, or would you hope that this reimbursement program could lead to more exclusive relationships like you have with UnitedHealthcare? Is that a realistic expectation?
I think potentially. Look, I think on a broader level, what we're trying to do within Medtronic Diabetes and what we're trying to do across Medtronic is change the conversation. Today's
Dynamic. Today's paradigm is a paradigm where companies offer a product into a healthcare system. They get compensated for that product immediately. The healthcare system basically lives with a promise that things will get better because of the utilization of that product. It's almost like, "Here, pay me for this and trust me, it's going to drive better outcomes and lower costs." We want to change that because that's a broken dynamic around the world. We want to change it to, "Look, you don't need to trust me. I'm going to actually prove it to you. You put this on and you buy this, and we feel so strongly that this was designed for outcomes that we're going to stand behind it." We really think that that's where healthcare needs to go, and we want to lead the way.
Robbie Marcus, JP Morgan. One of the more interesting things I heard was on the Medtronic Envision Pro.
Yeah.
That it was going to be disposable and Bluetooth-enabled and within the next 2 years. Maybe you could spend a minute on the technology that that product can bring and how you can apply that to the type 1 business.
To the type 1 business.
as a professional-
How do you take your disposable Bluetooth-enabled professional use CGM and take that technology into a type 1 product?
Yeah. Maybe, I don't know, Ali. Yeah.
More of an R&D question.
It is on that front. On the type 2 side of things, because it does not have to have continuous Bluetooth, it has it at the very end, it is more of a one-time use reader on that end. What we have on that roadmap, is noted as Unity, is essentially the amalgamation of what you are describing for type 1. It is Bluetooth-enabled, disposable, and then up to 14 days of wear. That is where that is going for type 1. The two products are a little different in terms of their user needs. As a result, we customize it a little bit more for the Envision versus what we are doing for type 1.
Not necessarily a disposable transmitter, but just a one-time Bluetooth transmission.
That's with Envision Pro, it is disposable on that side.
It's a disposable transmitter.
Yeah. The difference being is that in the case of type 1, we have to communicate minimally to the pump every five minutes or so. The battery doesn't have to be as robust in the type 2 space.
Okay. It's a different quality transmitter-
Correct
required.
Yeah.
Then maybe, Hooman, you could spend a minute. We saw the benefit of the iCGM designation with Tandem's pump and Dexcom's G5 to G6. Can you talk about where Medtronic is in that process and how important that is to development timelines for you going forward?
Sure. Robbie, we touched on this a little bit a few weeks ago at Investor Day. I do applaud the FDA for what they've done. I really think getting a designation for CGM that essentially gets it to a 510(k) versus a PMA is completely a step in the right direction. It's something that if you take a look at our R&D plans, we fully intend to have our CGMs meet that iCGM designation. Really more than anything else, there's some algorithm work that needs to be done with respect to the sensor. But more than that, it's really just demonstrating the manufacturing controls. That's absolutely part of our operations process. Maybe just a couple things to add, because I know there may be a few more questions about this.
When you look at both non-adjunctive and No Cal, that's also something that was reflected in the roadmap that we showed. Our PMA for non-adjunctive will actually happen this year. Our clinical trial for No Cal will also happen this year. Between iCGM, between non-adjunctive and No Cal, it's something that we're committed to and is part of our roadmap. Now, having said that, I know the community gets really enamored with stuff like that. In the end, those kinds of things are not what diabetes management is about. Those are important with respect to burden and removing burden for patients. Simply not doing finger sticks doesn't all of a sudden make diabetes go away or make it. You've got to combine it with other things. Really that's why our strategy is beyond just specs.
The specs are important, and we're not going to give up on those, and we have a strategy around it, but it's broader than just the specs. That's why we're doing the things we're doing.
Guardian Connect just launched just recently. When we're sitting here next year at ADA, how would you define a successful launch? Could that be $40 million, $50 million in revenue, potentially?
I don't know. Laura, you want to
We're not giving guidance on specific revenue. As you saw, we'll be combining under Emerging Technologies. As Hooman mentioned, our share is going to be more than zero. Absolutely. A successful launch is we have meaningful share in the standalone marketplace. We have users who are getting benefit. I think one of the things that's with competition out there, sometimes it's "Oh, this is interesting. It's easy to use. I'm going to try it," but they're not staying with it. A definition of success is that not only do we have those initial purchases, but we have persistent use of our CGMs, and then we're able to come back up here and not just show you, "Hey, we reduced 10% of hypers and hypos with.
A 530 population, we're really excited about what we can do within the MDI population, which I would expect and will be very significant.
I think just a couple points to maybe underscore. The first one, the point she made about persistence is a great one. Some of our competitors out there are posting big numbers, that's good. If you take a look at sort of the underlying persistence, the switching costs from some of those technologies are low, and there's actually quite a lot of switching that we see. This notion of stickiness and persistence is absolutely critical. Now, as far as the share position, I'll just reiterate what Laura said and the comments I made earlier. It's a billion-dollar market. By next year, this time, it'll probably be $1.3 billion, $1.5 billion, given how fast it's growing. Pick whatever number you like, 10, 15, five even. It almost doesn't matter because the contribution to our growth will still be meaningful.
We just think this is a market that continues to expand. We are actually getting benefit from a lot of market development that our competitors have been doing. We're just excited to be able to participate and to capture a meaningful piece of what's going to be a growing market.
This is a follow-up. I'd kind of love to hear your views on implantable CGMs, kind of long-term implantable CGMs, just since there's more buzz in the marketplace. How do you see that fitting into the market?
Sure. Fran, I'll ask you to comment as well from a clinical perspective. I think it's a novel idea, and it's hard to argue with things like how long their sensor lasts. I think the implantability of it is going to be a concern for a lot of people. Just my own personal perspective, I think there will be a market for it, but I just don't know how big it'll be. My sense is it'll probably be niched with respect to certain people who are willing to do the implant/explant today, which is every 90 days, which is a lot. If every three months you have to explant it and then implant again, that's not trivial. The other thing that I would say that is going to limit some of the adoption, again, just personal opinion, is the fact that it's not totally discrete.
One of the benefits of implant is discretion, but if you have an implant and then have to wear something on top, it sort of negates the discretion benefit that you would have from implant. I think those things have to get solved. Fran
Well, I think as a clinician, it's certainly exciting. I'm not sure it's clear in the clinical pathway of caring for somebody with diabetes how this exactly fits in, who does what procedures, how there will be reimbursement. I think there's certainly interest. I think it will be kind of, I agree with Hooman, a very niche product at the beginning, and then time will tell.
Thanks, Anthony from Jefferies. Maybe a little bit on Guardian, just the pricing strategy and a little bit on the channel strategy. I know that a competitor is going pharmacy channel, then the market seems to have segmented with a high price setter already in there as an incumbent and then a new entrant that's lower price. Where are you guys on pricing? I have one follow-up.
Sure. I'll start. I'll ask Laura to comment as well. I think you, Anthony, characterized it properly. You sort of have some bookends with respect to the pricing. You've got one competitor on one end. You've got another competitor on the other end. I think we'll be somewhere in between because I really do believe that when you take a look at Sugar.IQ and you look at all of the benefits that come with the insights, if you look at the fact that we leverage CareLink, if you look at the fact that we're the only ones that go to a smartphone and don't need another receiver, there's a lot of benefits. We don't have to go too crazy from a pricing standpoint, but I think we'll be somewhere in between those posts.
The pharmacy versus distribution, Laura pointed out, we have 1,000 resources in the U.S. that we can leverage to drive Guardian Connect. That's massive, and nobody else has that, and that needs to be our primary focus is driving Guardian Connect through that channel. We're looking at pharmacy to see if that's viable, but as you probably know, there's pros and cons to going through the pharmacy channel, and we're going to take our time with that, evaluate it, and if it makes sense with respect to not just growth but also margin, then it's something that we'll pursue. But right now it's more understanding it at a deeper level before we jump into it.
A quick follow-up would be, is there any stocking on Guardian you would expect? Then just the Type 2 diagnostic market at $100 million, that seems small. Why do you guys value it at $100 million? Thanks.
I don't see any stocking that's going on from distributors and those type. Not anything that I would characterize as abnormal. Nothing that has hit my radar. No.
No. Same for us.
No. Then with respect to the market, the diagnostic CGM, you got to understand who the customer is first. It's primary care. This is a primary care physician who has a number of different things that they are treating, and diabetes is one of them. This is really market development at this point, Anthony. It's $100 million because it's still very, very early stages of market development. Just getting primary care physicians to understand continuous glucose monitoring, what professional CGM is, what the benefits are, how to use it, how to interpret the reports. That's a long road. I think it's a worthy road to go down because the vast majority of people are Type 2, and the vast majority of them get treated by their primary care physician. We have to figure this out. Today it's small.
Thanks. Just a question on one of the growth drivers you identified in the sensor attachment rates, going from 35%-65%, I think is some of the numbers you'd thrown out there.
Why is it just, I don't mean to be disrespectful with the question, why is it only 65%? Why isn't it higher, and what are the factors that hold that back?
Sure. I'll ask Suzanne to elaborate on this. The 65%, actually, if you were to do the walk to 100%, a big chunk of the patients that we have, call it 15%-20%, are Medicare patients. Because they're Medicare patients, they don't have their CGM reimbursed. We sell them standalone pumps, they're standalone pump customers. That's one big element. There's other customers that just simply, at this point, want to step their way to the 670G. They like just the standalone pump, they'll continue to purchase the standalone pump. In some cases, it's a market, in other case, it's a matter of preference. I don't know, Suzanne?
I think as people move to the 670G, the attachment rate goes up dramatically. In terms of our overall pool of patients, it averages out to 65.
Just a quick follow-on. Timing on getting Medicare reimbursement on the CGM?
The Medicare reimbursement will come with a non-adjunctive claim. As I mentioned, we're going for the non-adjunctive PMA this year. Okay. Thank you, everyone. That concludes our session this morning.
Okay. Thanks, everybody, for your time.