Okay. Good morning, everyone. Sorry, we had some technical difficulties getting started. I'm going to pass around a sign in sheet. If you would if you could put your name and firm on that, I would appreciate it.
Go on one on each side here. So I think most of you know me. I'm Ryan Weispfenning, Vice President of Investor Relations at Medtronic. Thanks for coming to our diabetes group session here at ADA, and 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. And 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, and we do not undertake to update any forward looking statement. So 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 Hakani, 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. So, Hooman?
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 Doctor. Fran Kaufman. She probably needs no introduction, but she is our Chief Medical Officer for the diabetes group. To my immediate left is Ali Diannady.
Ali is our Vice President of Global R and 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. And to Laura's left is Sherry Dodd.
Sherry is responsible for our non intensive diabetes therapy business, and you'll hear from her as well. So 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, and I'm really not going to run through the same set of charts from Investor Day, but maybe start with essentially a recap of what we discussed and some of the key themes that we went through during the Investor Day. Really, the first one is that obviously within Medtronic, we have this incredible legacy, we have this incredible brand, But really, our performance, particularly over the last 4 years, while we've had some sort of turbulence and some issues, has actually been really quite strong, and 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. And 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 670 gs is still in the early innings. This is a product that in many ways is just still in its infancy. And 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, and 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, And we're incredibly excited by this, but it's still early. And so in the United States, where we've launched this product, we think there's a tremendous runway in front of us.
Just this week, we also received CE Mark for the 670 gs. So the international expansion opportunities for 670 gs are big and large. And 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 670 gs that rely on continuous glucose monitors, What we are seeing is an uptick in sensor utilization, sensor attachment, and that uptick in both attachment and utilization is a key catalyst for our growth. We're already starting to see that dynamic play out and we see that dynamic will continue to play out, particularly as the installed base for 670 gs 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 $1,000,000,000 it's growing in the neighborhood of about 50%. And we're really excited about our Guardian Connect product with SugarIQ.
We think we have some real differentiators that will allow us to penetrate this market. And as I said during the comments at the Analyst Day, almost pick any share we're starting from 0 and pick any share and penetration numbers that you 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. And then 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 scalability on a global perspective. And 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. And so those were, at a high level, the comments that and the themes that we talked about during the Investor Day. The other thing I'll kind of 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 3 business units, Advanced Insulin Management that is led by Alejandro Galindo. Alejandro sends his apologies. He's actually on vacation, but he runs that business unit, and you can see the products that are within that business unit. And I'll talk a little bit more about AIM in a second.
And then we have 2 additional business units that we will, from a reporting perspective, consolidate into what we will call emerging technologies. And those business units are a multiple daily injection solution business unit, which, as I mentioned, Laura runs and Laura will talk about in a few minutes, and our non intensive diabetes therapies business unit, which Sherry runs and which Sherry will talk about. So 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 sort of from where we came, we were a type 1 pump and sensor business. And 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 and 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. So 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 is this represents the bulk actually of our revenue.
So all of the pumps, all of the associated sensors that go with those pumps, all of the consumables that and the infusion sets and the reservoirs that are part of those pumps and the pump systems are within this business unit. And you can see in terms of the share overall, we enjoy a large market share. But 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%. So 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.
And 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. So now 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, and then end with a little bit of a view into how we're thinking about the future. So one of the things that we're incredibly excited about that was announced here is that our 670 gs has extended and expanded indication.
We now have indication for children 7 and above. Fran, obviously, from a clinical perspective is incredibly excited about this, and 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 United States. And so this is very exciting for the business. It's certainly exciting for our commercial teams and our clinical teams. And 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 United States.
The other thing that was just announced that I alluded to just a second ago is that the 670 gs has just received CE Mark approval in Europe. And so our international expansion efforts and commercialization efforts of this new technology are starting. And so you can expect to see us ramp up commercial activation for this product this calendar year. And we're going to start with Europe and start to aggressively ramp up there. But this gives us another catalyst for growth as we think about certainly FY 'nineteen, but even beyond into FY 'twenty and FY 'twenty one.
The other thing that you'll hear from us, and we talked a little bit about this during one of the panels during the Investor Day, is not only innovation from a product perspective, innovation also from a business model perspective. And I want to just touch a little bit on what you're going to hear from us with respect to our partnership with United, because we're getting results back from our preferred partnership and our value based healthcare agreement with United, and these results, I think, are noteworthy. So the first there were 2 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.
And 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. So that part of the agreement has been wildly successful, and we're obviously very pleased with how that's gone.
But there was also a second component to that agreement. There was a value based healthcare component to that agreement. And 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. And 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. Now, 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.
And after a year's worth of work, we have our 1st year of results. And you can see the results are actually impressive. And 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 630 gs system or our 530 gs system. So the results that we have here don't even have the incremental benefit that we see from 670 gs.
But even without 670 gs, what we saw over the 1st year from United is pretty remarkable. When we looked at pump patients who are on pump, our pump therapy versus those patients that were on multiple daily injections, what we saw was a 27% reduction in preventable hospitalization. So 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. And so when we compare 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.
And 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. And 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. Now, the other thing that you're going to hear from us is as a result of the outcomes that we see with our 670 gs 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 670 gs performance guarantee. So based on the outcomes that we see with 670 gs, 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. And 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 670 gs, we'll reimburse it And we'll reimburse it up to a cap of $25,000 over a 4 year period. There is no other diabetes company that can say this or do this. And 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. And there is no other company that has the data that we do that demonstrates the value of that control.
And so 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, and 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. And then look, this is just some examples of the here and now. And 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.
We by no stretch of the imagination do we feel that our work is done, and 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 discrete, they're something that the patient puts on and then forgets about.
That's another goal that we have for this business unit. And 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. And 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. And I know everybody is interested in this that yes, they will not require finger sticks. But 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, and 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.
And finally, the other area of innovation that we're going to drive are proactive services. And these are proactive services that are going to help both patients and providers achieve better results and drive lower costs for a healthcare system. So 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 Mininet.
So 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 here.
All right.
Thank you, Joanne. Good morning, everybody. So similarly, I would like to use this opportunity to go beyond what we talked about Day and specifically dive more into why we call our standalone CGM solution smart and really believe that we are creating a new category of CGM. And 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. So as you know, actually we had commercially launched Guardian Connect in the U.
S. At Investor Day in New York City and now we are fully launched meaning we are shipping the unit. So we are very excited about that. And that means that we have the full force of our commercial team globally behind Guardian Connect. So, as Humana introduced Suzanne Winter, who manages the Americas.
Just as an example, one of our competitive differentiators really is the few 1,000 people in the Americas both on 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. So, one of the things that we've talked about is the SugarIQ app that we partnered with IBM Watson and 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. So we're really going beyond just providing a glucose number every 5 minutes.
We really want to take burden off of patients to empower them. So what I like to do is share with you a short video and then maybe go into a couple of examples, real life examples now that were shipped of some patient experiences with SugarIQ.
I'm a morning person now, but I haven't always been. With high diabetes, warnings aren't always predictable. But since I started using the share iQ diabetes assistant with my Guardian Connect CGM, I not only manage my highs and lows, but I actually outsmart them. Looks like I'll need this to power me there by morning run. 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. SugarIQ helps me make confident data backed decisions with personalized tips and insights. The SugarIQ Assistant has one of a kind technology that gives me a full picture of my diabetes. Awesome!
With the SugarIQ 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.
So hopefully that gives you an idea of SugarIQ. And 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. And hopefully, you took away the beauty and the simplicity of what we're trying to do with SugarIQ and Guardian Connect where but there's a lot of innovation behind it. And just as I get into this example, just to pull out a couple of elements of the innovation. So one is, as you saw from the screenshot, we are actually pulling in Guardian Connect information into Sugar IQ, but it's much more than that.
We are smart the way we food log. So rather than depending on carb counting, it's a really easy and intuitive way to log meals. And in this example, we actually have a Type 1 who is on the 670 gs, who has been using SugarIQ to get that extra level of insight. So beyond what you just heard as far as good glucose control. And 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. So 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. And while this particular woman with Type 1 diabetes, she was tracking her spikes, but didn't really understand, 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. And only after 2 days of using SugarIQ, sure enough, this insight popped up and said, did you know, because we are 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.
And because of that, she was able to make some adjustments to both her bolus as well as her diet. The other aspect that we are doing as far as intelligence in SugarIQ is how we interact with the patients and with the users. So, it's not alarm fatigue. It's not data fatigue. What these insights are, are they're smart in and of themselves.
So 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. So 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 SugarIQ 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. So 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. And what we've done in just actually there was an oral presentation this week at ADA with some results of SugarIQ. We did launch SugarIQ to select patient population. Actually, they were on 670 gs and using our sensor along with SugarIQ.
So these patients being on 670 gs 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. So as you can see, time and range improved by reducing the time in hyper and hypos and what this translates to is about a 10% reduction of hyper and hypo as well as a reduction in the number of episodes. And again, this 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. And 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 and 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 exists and going beyond that. So 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. And again, this is like a weather forecast. We've talked to a lot of physicians here this week and 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? And that's really where we're focused to empower patients. Similarly, we have a roadmap really across both products, insights, innovation as well as patient engagement. So similarly, from a CGM perspective, we're all about making the CGM easier to use, more affordable and discreet. And 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. There's a lot of times the physicians might get a call, oh, I'm seeing my CGM number go up. I don't know why. And 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?
And what SugarIQ does is becomes that detective for the patients themselves. So physicians and that's why we call it 360 guidance is that we are another differentiator is that we're really incorporating complete care from the patient to the physician to the technology. So hopefully that gives you another level of detail of why we're excited about smart CGM. It's a new category and how Guardian Connect and SugarIQ really helps be one of the growth drivers for the diabetes business going forward. So Sherry?
Good morning. So NDT, part of the portfolio of new general manager and very excited. As Hooman mentioned, it's a large segment of the population, highly underpenetrated, great place to join as a general manager, you can only go up. But what gets me really excited about the role is actually the patient in the center. So the patient in the center actually represents the comorbid chronic patient.
And I'm currently the General Manager of the Medtronic Care Management Services business and are taking on additional role responsibilities with the NDT business. But the focus is clear about the patient. And so 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. And so the management of this population isn't just about management of the diabetes, it's about more holistically managing the population. So the Medtronic Care Management Services business has been in existence for 19 years. It was an acquisition Medtronic made about 5 years ago, 5,600,000 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. So 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. So 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 map to the role of food and glucose. It's a tremendous opportunity to bring these two businesses together and look at these strategic opportunities for improving outcomes and reducing costs for this population. So how are we going to do that?
So if you think about the work is actually in multiple levels of risk stratification. So 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? And actually further refining truly what that population looks like. When you add the opportunity of a device like an eyePRO, you actually have another opportunity to risk stratify the population and find a very discrete population that needs better diabetes management, but also more holistic management of their real life, which again could involve a number of comorbidities.
So when we put the risk stratification together along with the right tools, we are able to segment out a high acuity population, a medium acuity population and a low acuity population and really put these services together. So for example, you could use eyePRO I'm sorry, 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. But 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. So using Guardian Connect and SugarIQ as Laura presented as a potential tool using inner circle and patient coaching and other opportunity.
And you couple that up with the opportunity for remote patient monitoring. So 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 just tools and devices that are gathering individual data points versus putting all those data points together that actually inform a care plan. And then the low acuity patients, so 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 have been doing in Medtronic Care Management Services over into the NDT business. So what does our portfolio look like? So right now, as you can see, we have launched and are driving growth in IPRO using Pattern Snapshot as well as the food print, which we launched and really having a robust way and 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 will 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 Neutrino. So Neutrino 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. And then we're very excited about Envision Pro, which will be our next generation I Pro, 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 focus monitor.
So 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 NDT, we have a tremendous amount of opportunity and looking forward to where this takes us.
Great. Thanks, Sherry. So I'll just wrap up here. Just a couple of slides to wrap up. Every single one of our business units, we really have a similar approach, and that approach starts with innovation.
And we have innovated with respect to our core business over 2 decades. If you think about the 1st pump, if you think about the 1st sensor, if you think about the 1st 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 1st 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 and D to push the envelope with respect to what's possible in diabetes from an innovation perspective. But 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 4 years.
There has been an explosion of innovation in the diabetes landscape over the last 4 years and the cost of diabetes continues to go up. The outcomes related to diabetes do not get better. It is not just about hardware. And so 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 670 gs, everything that we talked about with respect to artificial intelligence that powers SugarIQ in our MDIS business and everything that Sherry 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. But even those two things, innovation and decision support are not enough. Diabetes is a disease that isn't managed in the clinician's office. So 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 endocrinologists and their primary care physician. But 99% of diabetes management happens in between those physician visits.
And it's about how you engage that patient that will truly drive ultimate success. So 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 food print and helping them understand that a bowl of cereal may be a D for you in terms of how it affects your glucose. But oddly, this banana that you thought spikes your glucose up may not be so bad for you.
And so engaging with patients so that they understand how diet impacts their glycemic levels is another example of patient engagement, and all of the remote patient monitoring tools that MCMS has that Sherry talked about are just one more example of patient engagement. So our strategy is to take therapy innovation, continued leadership in R and D, couple it with decision support and wrap around that sophisticated patient engagement tools, and then 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. And then 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. 670 gs is just getting started. What we have in the United States is great, but it has tremendous opportunities for growth. We're launching outside of the United States. We're getting incredible attachment rates from CGM, which will continue to drive growth in addition to the pump revenue that we will see in our entry into the standalone CGM business, into this $1,000,000,000 market that's growing at 50%, we think is going to be a meaningful contributor for our future growth as well.
And then 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 Sherry's business, that's another, call it, another catalyst that we believe represents a huge growth opportunity for us. So 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. So thanks for your time, and would love to take some questions together with my colleagues here. Joanne?
Joanne Wuensch from BMO. I have two questions. Congratulations on the CE mark for the 670 gs. But 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 670 gs into it?
Yes, that's a good question, Joanne. If you take a look at our experience with the 640 gs in Europe over the last 3 or 4 years, we've seen just some incredible penetration of pump therapy. And 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. And so I think all you need to look at is the 640 gs experience as a predicate. And we were able to see some really great growth out of our European business for 4 years essentially since the introduction of the 640 gs.
And I would absolutely only expect that to continue as we launch 670 gs. Pricing, I don't see a difference with respect to pricing on 670 gs.
And then 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. So when we talk near term, we're talking FY 'nineteen, FY 'twenty.
Bruce Snodell, SunTrust. Vooman, I had two questions. One is on the 670 gs guarantee. How powerful commercial impact could that have in a competitive context? And also, could you just discuss your kind of sensor road map 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 DeNati, our R and 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, but we'll see kind of how this goes as we engage with payers, but I think it's compelling I think it's a compelling value proposition and I think it's something that nobody else can actually do. And if you take a look, our experience with United, 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. And for us to be able to guarantee those costs for patients that are wearing the 670 gs, I'm hoping will be a compelling offering. I don't know, Susan.
Research with our payers and they're very interested in this. And they're interested in it for a couple of different reasons. 1, as human pointed out, the inpatient visits and the ER visits are a big cost driver for diabetes patients. And so 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. And so that drives the interest.
But 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.
And then with respect to the R and D. The map, Ali?
Yes. So getting to that final version that you described of the combination set, it really is the amalgamation of 3 technologies as one. It's one of course no cal, the second is the new form factor for the sensor. Then last we're extending the wear of the set itself to 7 days in order to make it all work. And so each of those have their own disparate paths, the longest at the moment being the ability to get to the 7 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 the DAP for the count?
Yes. So the significance of that would be essentially to keep it competitive against no finger sticks essentially. And the reason why we're calling it adaptive cal 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. So 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.
Matt Blackman with Stifel. I just want to follow-up on Bruce's question. Do you think or would you hope that this reimbursement program could lead to more exclusive like relationships like you have with United? 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 has changed 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, but the healthcare system basically lives with a promise that things will get better because of the utilization of that product. So it's almost like here, pay me for this and trust me, it's going to drive better outcomes and lower costs. And we want to change that because that's a broken dynamic around the world.
And we want to change it to look, you don't need to trust me, I'm going to actually prove it to you. And 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. And we really think that that's where healthcare needs to go, and we want to lead the way.
Robbie Marcus, JPMorgan. One of the more interesting things I heard was on the Medtronic Envision Pro. Yes. And that it was going to be disposable and Bluetooth enabled and within the next 2 years. So 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?
So the as a professional
How do you take your disposable Bluetooth enabled professional used CGM and then take that technology into a Type
1 product? Yes. And so maybe, I don't know, Ali, you can You're actually going
More of an R and D question. In two
different directions on that front. So on the Type 2 side of things because it doesn't have to have continuous Bluetooth It has it at the very end. It's 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're describing for Type 1. So it is Bluetooth enabled, disposable, and then up to 14 days of wear.
And that's where that's going for Type 1. So the 2 products are a little different in terms of their user needs. And as a result, we customize it a little bit more for the Envision versus what we're doing for Type 1.
So not necessarily a disposable transmitter, but just a one time Bluetooth transmission?
That's what Envision Pro and it is disposable on their side. Yes. But the difference being is that in the case of Type 1, we have to communicate minimally to the pump every 5 minutes So the battery doesn't have to be as robust in the type 2 space.
So it's a different quality transmission required. Correct. Yes. And then maybe, Hu Min, you can 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.
So 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 5 10 versus a PMA is completely a step in the right direction. It's something that if you take a look at our sort of R and D plans, we fully intend to have our CGMs meet that iCGM designation. There's a couple 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, and that's absolutely part of our operations process.
Maybe just a couple of 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. So our PMA for non adjunctive will actually happen this year. And our clinical trial for NOCAL will also happen this year. So between ICGM, between non adjunctive and NOCAL, it's something that we're committed to and it's part of our roadmap.
Now, having said that, I know the community gets really enamored with stuff like that. But in the end, those kinds of things are not what diabetes management is about. And so those are important with respect to burden and removing burden for patients, but 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. And so really that's why our strategy is beyond just specs. And 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.
And that's why we're doing the things we're doing.
So in Guardian Connect just launched just recently. We're sitting here next year at 88. How would you define a successful launch? Could that be $40,000,000 $50,000,000 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 early technologies. But as Hooman mentioned, our share is going to be more than 0. Absolutely. We have successful launches.
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, it's sometimes it's oh, this is interesting. I'm going to it's easy to use. I'm going to try it, but they're not staying with it.
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've reduced 10% of hypers and hypos with a 5:30 population, but we're really
a couple of points to maybe underscore. The first one, the question the points you made about persistence is a great Some of our competitors out there are posting big numbers, and that's good. But 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. And so 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 $1,000,000,000 market. By next year this time, it will probably be 1.3, 1.5, given how fast it's growing. Pick whatever number you like, 10, 15, 5 even, I mean, it almost doesn't matter because the contribution to our growth will still be meaningful. And so 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.
And so we're just excited to be able to participate and to capture a piece, a meaningful piece of what's going to be a growing market.
And just as 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. And 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. So just my own personal perspective, I think there will be a market for it, but I just don't know how big it will be.
And my sense is it will 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. I mean, if every 3 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.
And so I think those things have to get solved. Fran, I don't know.
Well, again, 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. But I think there's certainly interest. I think it will be kind of, I agree with Hu Min, 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. A lot of competitors going pharmacy channel. And 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 or are you guys on pricing?
And then 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 SugarIQ 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 smart phone and don't need another receiver, there's a lot of benefits. So we don't have to go too crazy from a pricing standpoint, I think we'll be somewhere in between those posts. And the pharmacy versus distribution, Laura pointed out, we have 1,000 resources in the United States 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 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 in deeper at a deeper level before we jump into it.
And a quick follow-up would be, is there any stocking on Guardant you would expect? And then just the Type 2 diagnostic market at $100,000,000 that seems small. So why do you guys value at $100,000,000
I don't see any stocking that's going on with from distributors and those type of not anything that I would characterize as abnormal, nothing that has hit my radar. No. And then with respect to the market, the diagnostic CGM, you got to understand who the customer is. First, it's primary care. And 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. And so it's 100,000,000 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. But I think it's a worthy road to go down because this is the vast majority of people are type 2, and the vast majority of them get treated by their primary care physician. So we have to figure this out, but today, it's small.
So just a question on one of the growth drivers you identified in the sensor attachment rates. Going from 35% to 65%, I think, some of the numbers you've thrown out there.
Why is it just and
I don't mean to be Sure. And I'll ask Suzanne to elaborate on this.
Sure. And I'll ask Suzanne to elaborate on this. The $65,000,000 actually if you were to do the walk kind of to 100%, a big chunk of the patients that we have, call it 15% to 20% are Medicare patients. And because they're Medicare patients, they don't have their CGM reimbursed. And so we actually, we sell them standalone pumps, and 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 670 gs. And so they like just a standalone pump, and they'll continue to purchase a standalone pump. So in some cases, it's a market. In another case, it's a matter of preference.
I don't know.
I think as people move to the 670 gs, the attachment rate goes up dramatically. But in terms of our overall pool of patients, it averages out to 65.
Timing on getting Medicare reimbursement on the CGM?
The Medicare reimbursement will come with a non adjunctive claim. And as I mentioned, we're going for the non adjunctive PMA this year.