All right. Thanks everybody for joining. I'm Lee Hambright, U.S. MedTech Analyst at Bernstein. We are very happy to host Insulet. We've got Chief Operating Officer, Eric Benjamin. Thank you so much for being here, first of all.
Absolutely. It's our pleasure.
Just a reminder, if there's any questions in the room, please submit them through the app. We'll try to work them in if possible. Maybe, Eric, starting big picture, you've been with Insulet for over a decade. The company's revenue this year will be 10x what it was in the year that you joined. Maybe talk a little bit about how Insulet has evolved over that time, and what feels most different today about the company.
Yeah, it's been an incredible 10-year journey, Lee. I think what's most incredible are the things that haven't changed, which are also the things that make the next decade Insulet's best. Insulet was founded by a father who looked at injections and tubed insulin pumps and said there had to be a better way. That drive to find a better way is what fuels all of us at Insulet, and me, every day. We show up in order to find innovative ways to deliver better technology, to go to market like pioneering into the pharmacy channel. That spirit just flows through who we are. That hasn't changed. It is at least as inspiring today as it was a decade ago.
Similarly, despite the technology renaissance in AID over the last five years, and it has been remarkable what we are now able to do for people with diabetes, the markets that we serve remain large and under-penetrated. There are 1.8 million people who live with type 1 diabetes here in the U.S., and less than half benefit from AID, despite it now being recommended in the strongest possible way in American Diabetes Association guidelines as standard of care. There are 2.5 million people who live with insulin-intensive type 2 diabetes in the U.S., and about 5% of them benefit from AID, despite it now being recommended for consideration in standards of care. In just the global markets that we serve, there are almost 4 million people who live with type 1 diabetes, and only about 25% of them have the benefit of AID, again, despite strengthening guidelines.
Lee, despite all the progress of the last five, 10 years, the markets that we are in remain large, under-penetrated, and there is just enormous unmet need. Those things have not changed. But a few things have, and we are a much larger, much more sophisticated organization than we were when I joined. We now serve 26 countries around the world, 20 with Omnipod 5. We have built manufacturing scale that we can invest in ahead of demand to be ready to deliver growth. This year, we are on track to add more customers this year than we had when I joined the company, and that requires scaled, sophisticated manufacturing capabilities. We have the most exciting innovation pipeline we have ever had with Omnipod 6 and type 2 fully closed loop and more to come.
Lee, when we look at our drive to improve lives, the large under-penetrated markets, and the sophisticated capabilities we have to drive impact at scale, our next decade is the best one.
Awesome. Excellent. Lots to dig in on there. Thank you for that. Starting with, you reported a really strong Q2. 23% organic growth, solid new customer starts, 20% U.S. Omnipod growth, 33% international Omnipod growth, and 140 basis points of operating margin expansion. Investor focus, of course, has been on the revised U.S. outlook and the evolving views on the type 2 opportunity. Let us start there. It has been almost two months now since the Q2 call. Could you maybe share a little bit your latest thinking on the type 2 opportunity and any early feedback on the corrective actions that you outlined on the Q2 call?
Yeah. Lee, maybe two things. One, before I jump into type 2, as you said, we delivered a very strong second quarter, and the fundamentals of the business and the growth that we're driving are significant. You called out more than 30% revenue growth international and more than 20% customer base growth globally. We're proud of the fundamentals of growth that we're executing. We remain really excited about the long-term type 2 opportunity. As I said a few minutes ago, there's more than 2.5 million people who live with insulin intensive or basal bolus requiring type 2 diabetes here in the U.S., and only about 5% of them have the benefit of automated insulin delivery technology today.
What I see out in the real world when I'm out with customers and our team, is just the incredible diversity of people who live with type 2 diabetes whose lives are being transformed by AID. I heard about a 100-year-old woman in Maine who was using Omnipod 5. I've heard about folks who live in nursing homes, who are benefiting from Omnipod 5. Lee, that unmet need is enormous, and the diversity of people whose lives we're changing is tremendous. We look at that opportunity and the proven clinical impact and the fact that we drove 40% of our new customer starts in Q2 from type 2, and what we see is large unmet need, large opportunity, and a proven market that we can go drive growth in. So our enthusiasm's really high for the type 2 opportunity.
Great. Excellent. Okay. So let's maybe dig in on some of these kind of corrective actions that you outlined on the Q2 call. First of all, you framed the type 2 churn issue as being kind of concentrated in that first 90 days, after which retention stabilizes. You highlighted tweaks to the sampling program as kind of the key leverage point. Maybe can you talk a little bit more about just how you're changing the sampling program and any sort of early signals from that?
Yeah, Lee, as I just described, about 40% of our new customer starts were coming from type 2 in the second quarter. As we called out, we had more customers attriting during the first 90 days than we were happy with. So we are taking four actions in order to ensure that customers who start on Omnipod stay durably and continue to have their lives improved by the technology. Those four things include changes to the sampling program, some changes to field incentives to ensure that they're rewarded for durable growth, and Podders who are continuing to have a good experience, ramping our service teams, and accelerating the launch of Omnipod Discover, our digital health platform that also provides insights and education directly back to people's diabetes.
We are confident that those four actions that we are taking together will help us address the higher attrition that we saw in type 2 in the second quarter. Zooming in on sampling for just a second, what we are really doing is we are improving the workflow associated with deploying samples. We know that, having looked at territories across the country and looked at where sampling is being done well and where we have opportunities, we see that when there is a clear protocol for assuring that we get the script written, if there is a prior auth, that that gets done, that we have the right kind of conversation about coverage, and that the customer knows how to get support from Insulet, that that will be a durable start.
What we are just pulling through is that playbook all through our commercial footprint to make sure that our sampling goes as well as we know it can.
Yeah. Got it. There is about like adjudicating the script, either before or during the sampling episode, so that when the patient is done with the sample, they are ready to get the additional pumps.
You got it. It is just making sure that the customer is ready and supported as they are getting started on a sample to become a long-term customer, and that is what we are pulling through across the country.
Okay. Great. Let's hit all four of those actions that you just outlined. You also mentioned that you tweaked salesforce incentives to place greater emphasis on durable starts and early customer success. Those incentive changes can be really powerful drivers of change. Sometimes you get unintended consequences. What specific behaviors are you trying to motivate? Maybe talk a little bit more about how you've tweaked those incentives.
Yeah. Lee, we are very mindful of wanting to make sure that our field knows exactly what is required of them and that their actions drive the growth and success of Insulet. We have incredible people in our field teams, and they want that. They show up every day in order to improve the lives of people with diabetes. What we're really doing as we adjust these incentives, we're making sure that those early actions are executed well. We're arming them with the best practices of how do you start a type 2 customer, how do you make sure that they know what needs to happen during that early stage of the journey, so that if they need support along the way, they know how to get it.
We're pulling through, we're arming them with those best practices and adjusting their incentives so that they're focused on continuing to drive growth and the durability of that growth. We have confidence in those changes that we're making.
Yeah. Okay, great. I think the next one you mentioned was changes to customer service teams. I think both customer service teams and clinical retention specialists. Maybe can you talk just a little bit about those two roles and what you expect from people in those roles?
Yeah. Lee, the simple way to think about it is we know that in the first 90 days, a little bit of extra support can go a long way. We are making sure that as folks confront their first Pod change, their first sensor change, their first vacation, whatever it is, that we are ready to provide a little bit of education about what diabetes is like during those moments and how to get the best from Omnipod during those moments. These are teams that we have actually tested at pilot scale, and now that we are scaling. We have high confidence in the impact that we will be able to drive by scaling these and making these available to customers during that first 90-day journey.
Yeah. Got it. These are kind of office-based, reaching out by phone to patients kind of thing?
Correct.
Yeah. Got it. Okay. Great. Omnipod Discover was the last one you mentioned. It is going to go into full market release next month, October. You have said that Discover can help create a more complete view of each customer and enable personalized two-way engagement. In practice, how is that data going to change a patient's first 90 days or help clinicians manage patients more effectively?
Yeah. Lee, maybe if we just take a quick step back. Omnipod Discover is a two-part digital health platform. One part is a platform for physicians that provides the information required for a physician to care for a person with diabetes in the most efficient possible way. We have done a lot of testing with healthcare providers, seeking to give them back even just a couple of minutes per visit and help them really focus on how can they best help the patient sitting across the desk from them, and we have gotten tremendous feedback from clinicians on that.
The second part is different than a lot of these platforms that are in the market today. We designed Omnipod Discover to have a person with diabetes facing interface. What that does is, there is two parts to that. Every week, folks who are enrolled get an SMS from us with some insights.
In the same way if somebody has a fitness tracker or a sleep tracker or something like that that provides insights. Every week, we send an SMS with some insights. And those insights look back on the experience that that customer had during that week and just offer suggestions, reinforcement, support, congratulations, and ultimately, just a little bit of knowledge. And funny enough, yesterday, I got an email from somebody. It's been in limited market release. There's more than 10,000 people in the U.S. enrolled now. And got an email from somebody who said, "Look, that little bit of education, knowledge is power." And they had a more than 20-point improvement in time and range just from learning about their own diabetes from Omnipod Discover and credited Omnipod Discover with the improvement. There was nothing changed from their clinician, nothing changed from their technology, no settings changes, just their learning.
A little bit, three minutes a week from Omnipod Discover. So what we've seen in the limited market release is both significant clinical impact and retention impact, positive retention impact that as folks learn and get support and education, that they stay on Omnipod. So between now and the end of the year, we are accelerating the full market release so that all of our new customers get enrolled in Omnipod Discover and can get the benefits like the gentleman that I just mentioned.
That's great. You said three minutes a week. Is that sort of the average that people engage with the-
That was that particular gentleman.
Oh, yeah.
I mean, look, it's a link that you can just click, and you'll get a page of insights that says, "Look, here are the days you went well, here are some patterns that we see, and here are some suggestions if you want more information for where you can learn more about your own care.
That's great. Just that engagement clearly could lead to better retention, you would imagine. You said you've already noticed that a bit in the limited market release. Is that fair to say?
That's correct. Yep.
Yeah.
In the limited market release, we've seen both clinical outcome improvement and retention improvement. We're really excited to scale that to full market release between now and the end of the year.
That's great. Excellent. On the Q2 call, you also talked just a little bit about real-time data to track KPIs. I wonder if you could give us some examples of some of those leading indicators that you're tracking now.
Yeah, Lee, we have the benefit of a cloud-connected system that we get data from every five minutes that a Pod is connected to a controller. We're evolving how we look at that data and use it to understand what's really happening. We know, as an example, that customers will take Pod breaks, and they are still our customers even if they've taken a break. We know from looking at this that they will come back. There's business reasons that we may actually want to just look at how many people are activating Pods every week, even if that's different than how we think about our customer base.
We're now sort of reimagining how we use this more real-time data that we have to pay even more attention to trends that we see in the business and to be able to respond faster when we see things changing.
Yeah. Okay, excellent. Anything you can share in terms of recent trends coming out of those? Maybe not yet. I don't want to front-run Q3, but
Yeah, I was going to say, we're not providing an intra-quarter update. As we look at those indicators and our existing KPIs, and we are tracking carefully the four interventions that we spoke about, changes to the sampling program, field incentives, scaling support, and Omnipod Discover. Look, metrics are aligned with our expectations.
Yeah.
We have confidence in the plan that we're executing, and we're watching closely so we can keep driving execution quality on that plan.
Okay, excellent. From a modeling perspective, as we all think about how to consider this over time, we know that type 2 annual attrition rate has trended somewhere between 20% and 40%. What do you need to see in the field to give you confidence that attrition could be at the lower end of that range, or maybe even lower than the lower end of that range over the longer term?
Yeah. I think maybe two things that I'd call out, Lee. The first is we pay a lot of attention to retention after 90 days, because if you think about what is the structural indicator of the health of the business, it's once somebody is a customer, once they're part of the customer base, how long is that relationship going to be? Part of what gives us confidence and why, when you asked about the type 2 opportunity, I said we're really excited about it, is that that retention after 90 days is high.
It has stayed high for type 1. It has stayed high for type 2. When I hear your question, we have confidence in the health and durability of the business because that post-90-day retention is already in a place that it's very healthy for both type 1 and type 2. What we're focused on with the four actions that we've been talking about is improving that conversion from start to durable Podder.
We're really focused on how do we get more people from the day they start Omnipod to that 90 days when we know they're going to be long-time customers. Those are the more real-time measures that we're just talking about watching, and we got to execute those four things over the next couple of quarters. We've said we're going to provide an update on our Q4 call in February, and for now, we're confidently executing that plan.
Okay. Excellent. Just thinking about all the scenarios, is there a scenario where type 2 attrition ends up being kind of structurally worse than you thought it would be, maybe the higher end of that 20%-40% range, particularly as we get past these early adopters and get into the broader population of people with type 2?
Short answer, we don't see that. We don't see that there's a risk that type 2 attrition is structurally much worse than we've understood it to be for two reasons. The first I just mentioned, which is that the post-90-day retention is strong for type 2, and that tells us once we get folks there, it's a durable business model. The second thing is, as we've dug into the data, we see that there are opportunities in our execution, with the four levers that we just talked about, to improve that conversion from first start to the 90 days. I think from what we see, Lee, we're confident we can address the from start to 90 days, and we already know that beyond 90 days, the retention's strong.
Yeah. Okay, great. Just summing up the type 2 opportunity, I think I hear the conviction that once you get past that first 90 days, these are durable customers, durable users. Where could type 2 IIT penetration go longer term, three years, five years? I mean, are you willing to talk about just what that range could look like?
Yeah. When we did our investor day last November, we talked about it getting to the 10%-15% range from about 5% by 2028. Notwithstanding this conversation about us having more attrition in the first 90 days than we're happy with, the raw number of customers that we're adding, so NCS less attrition, we're on track to drive that kind of penetration. We're pleased with how the type 2 market is developing. I think when we take a step back and we look beyond that, Lee, we see opportunity for it to go significantly beyond the 10%-15%. We look at where CGM is today, and that's always a source of inspiration and an analog we pay a lot of attention to, and they're about 55% today in the type 2 IIT.
That's part of what inspires our type 2 fully closed loop, which is a disruptively simpler system designed to bring AID much deeper into primary care. In order to do that, we have to take out a lot of the physician burden, which we've designed out of that system, and take out a lot of the technology interaction requirements for the person with diabetes, which we've designed out of that system. So I think we draw inspiration from where CGM is at 55%. It's part of why we're innovating with our type 2 fully closed loop, and we're excited to take it a long way beyond the 10%-15% that we see it getting to in the 2028 timeframe.
Great. Excellent. We'll circle back on that fully closed loop. Just a quick question on basal-only users. You've got some wood to chop on the type 2 IIT 90-day retention issue before you can start thinking about basal-only users. But you have an indication there, and you've got good clinical evidence that AID can improve outcomes versus basal insulin shots. What's your latest thinking on the longer-term opportunity there with basal only?
Lee, we remain optimistic about the long-term opportunity for basal only. As you probably know, we had about 20% of the people in our SECURE-T2D pivotal study that actually were on basal only and went straight to AID. As you might expect, we get a number of new customer starts today of customers who are coming straight from basal only. As you described, our commercial priority today is to penetrate the IIT market, the type 2 basal bolus market. But over time, we see real opportunity in the 3 million people who are taking basal insulin, too. Maybe just to characterize that, the people who are already coming on are people with very high A1C for whom AID is life-changing.
Back to kind of the core of who we are, we see an opportunity to change lives and continue to unlock another market segment to drive growth over time.
Yeah. It does make more sense kind of physiologically for those people, right? It's you're giving them insulin when they need it.
As they need it.
Yeah. Okay. Quality. One quick question on quality. Your ability to manufacture at scale is obviously key to your competitive moat. A couple of recent medical device corrections have put added focus on quality. What have you learned from those recent issues, and what changes have you made in response?
Lee, as we shared, we've fully addressed the handling challenges in our factories. What we learned, taking a step back, we learned that there were places in our factories where we were handling sensitive parts of the cannula, in ways that allowed damage to happen. That's unacceptable to our customers, and we've addressed it. We've examined our factories across manufacturing processes to make sure that there aren't other opportunities where similar damage could occur. We've implemented corrective actions to address that. More broadly, we have just a really strong commitment to quality. We've been on a long time journey on the belief that, look, we earn our customers every time they put on an Omnipod, and so that trust and the experience is paramount. Moments like this just redouble our commitment to continuously improving quality for our customers.
I think, Lee, the other big picture learning is we also plan our supply chain with enough resilience to be able to get through moments when there's disruption. This year, despite the disruption, we're proud of the fact that we didn't miss a single shipment to customers, and that's a testament to the supply chain resilience and global capability that we've built.
Yeah. Great. Okay. Excellent. Manufacturing these things at scale is not easy. You guys have been doing it for a long time. Okay. Let's hit the pipeline. You've highlighted Omnipod 5 algorithm enhancements plus Discover in 2026, Omnipod 6 next year, and the type 2 fully closed loop algorithm in 2028. Maybe can you just elaborate one by one on why you're excited about those three?
Yeah. As I mentioned earlier, we've got the most exciting innovation pipeline we've ever had, Lee. The launch earlier this year of our second generation algorithm, it gave people an option for a lower target glucose, which gives people an option for tighter glycemic control with no increase in hypoglycemia. Has been really well received by customers since launch a couple of months ago. In addition to that, we launched the FreeStyle Libre 3 Plus integration, helping Omnipod 5 connect with the 450,000 or so people with diabetes who use FreeStyle Libre 3 Plus here in the U.S. We talked a lot about Omnipod Discover and the impact that that will have on people with diabetes and streamlining office visits for healthcare providers. So 2026 has been a terrific year for innovation at Insulet. We're even more excited about next year with the launch of Omnipod 6, Lee.
Omnipod 6 brings a new automated insulin delivery algorithm that delivers more automated insulin with less bolus burden. So it's an opportunity for people to get even better clinical outcomes and interact less with the system. It also has new hardware that gives dramatically improved wear flexibility. We know that a true wearable experience, people want to wear it where they can take an injection of insulin. As sensors have gotten smaller, AID devices had to be closer and closer to sensors, somewhat limiting wear flexibility. We've made the investments in the technology and manufacturing to address that with Omnipod 6, offering people dramatic wear flexibility in the experience. Finally, it's a single SKU updatable pod.
It simplifies prescribing for healthcare providers, and it accelerates future innovation to customers, by allowing us to push updates directly to pods that are in customers' homes, rather than having to put new technology on pods in our factories and ship them through the channel.
We are incredibly excited about Omnipod 6. Finally, we spoke a little bit about our fully closed loop for type 2, already coming in 2028. That system is in pivotal study now. Enrollment is progressing well. That is a disruptively different technology. As I described, that is a technology where the physician does not need to put any information about insulin into the system. They write a script, and the customer goes to the pharmacy to pick it up, and the customer starts in a very CGM-like way. They self-start. We were just doing studies of this in people's homes in Oklahoma, having people self-start on an AID system with no manufacturer or healthcare provider intervention. They put on the system, wear it for three days, and live.
That sort of disruptive simplicity is what we know is required in order to break down the barriers to adoption, which are that today, we are proud of the fact that there is 30,000 writers of Omnipod, but there is more than 100,000 writers of CGM. If we want to get penetration in type 2 to where it is in CGM, we know we need to dramatically broaden who can write, and that is what we are doing with the type 2 fully closed loop system coming in 2028.
Okay. Excellent. Great. Omnipod 6, one clarification. The algorithm there is already cleared. You are just waiting on the full system clearance. Is that right? The plan is 2027, sorry.
Correct. Omnipod 6 will come in 2027. We have gotten the algorithm clearance, and we have the system submission coming up. We are working through regulatory and working through launch readiness.
Okay, great. Then clarification on fully closed loop. You talk about starting with type 2 here. Why start there, and is there a potential for type 1 fully closed loop?
We're starting with type 2 because of the opportunity that we just described. I think when we say fully closed loop, what we really mean is a disruptively simple system that does not require input from a physician or from a person with diabetes. That design profile is what unlocks the 70% of the type 2 TAM, the almost 2 million people who are cared for by primary care.
Those primary care providers, we are slowly penetrating them, but it's a few thousand at a time. If we want to unlock tens of thousands of those writers, we need a disruptively simple system. We're starting with type 2 because we can do it, and we see the opportunity and the unmet need to go bring AID technology to those people. We are also advancing what we think of as a hybrid closed loop system that some people will use as a fully closed loop system and choose not to engage and choose not to bolus. We're launching Omnipod 6 as the next step in that regard next year, and we've already said we'll be launching another algorithm update the year after that, with continued algorithm improvements to come as we push towards the system doing more and people doing less, forever.
Yeah, got it. It's a recognition that some type 1s want to have that flexibility to bolus when necessary, and I think that's one of the nuances in the conversation about type 1 fully closed loop.
Yeah, I think in our research, most type 1s actually want the flexibility to engage.
Yeah.
We view, as we keep building better and better hybrid closed loop systems, that'll be a system that most people with type 1 will choose, and some people with type 2 will choose to want that engagement, too. But having the portfolio of a system that requires much less of both healthcare provider and person with diabetes is what unlocks almost a 2-million-person type 2 TAM that just can't be served with a hybrid closed loop system where there's more to learn and more to manage.
Yeah, got it. Okay, let's talk about competition. One of your competitors got FDA clearance for their patch pump just 10 days ago. They're planning for U.S. launch in Q1 of 2027. They've got a two-piece architecture with some reusable electronics, which means they can do those over-the-air software updates. There's no need to repair the Bluetooth during patch changes, and there's less waste versus fully disposable options. So maybe just talk a little bit about how you think about those claims or how you respond to those claims. How does the world change with competition?
Yeah, Lee, maybe a couple of big-picture thoughts before we zoom in. I think first, just back to being a large and under-penetrated TAM, if you look at what's been happening in the market, patch has been the almost sole source of market growth. As we see the need to drive more penetration, having more players with products that customers want is a good thing to help get technology in the hands of people who need it. We think the patch category is going to expand significantly with there being more entrants, meaning that both AID will expand and patch as a fraction of total AID will expand. We see that as a good thing for getting technology in the hands of people with diabetes. I think, as we then look ahead, we have confidence in three things.
The first is that we will sustain technology leadership. There is only one fully disposable, automated cannula inserted, waterproof wearable AID system, and that's Omnipod. I met a guy at ADA last year who had climbed Mount Denali taking Omnipod with him, with the confidence that if he had a problem, he'd have a backup pod, and he could keep going right up Mount Denali. I think the reality is there is a huge amount of security and ease of use that comes with the fully disposable form factor that's a little bit underappreciated, until people have lived one way or the other with it. Additionally, we're continuing to innovate. We just talked about our pipeline, Lee, but Omnipod 6 is a tremendous product that we know will be a delight to customers.
We're going to keep innovating beyond that, too, with algorithm updates in 2029, and we're already hard at work on stuff beyond that. We have confidence that we're going to sustain technology leadership. The second thing, we talked a little bit about manufacturing and supply chain and readiness to execute at scale. Just to dimensionalize that, we will have added more than 100,000 incremental customers per year in 2025 and 2026. If you just look back on our disclosures, we added more than 100,000 in 2025. We've said we'll add more than that in 2026. At 120 Pods a year, that's more than 25 million pods worth of capacity that we had ready for incremental demand last year and this year, and we're ready to keep doing that in 2027 and 2028 to keep driving growth.
Lee, I think the second big thing that gives us confidence in continuing to sustain and extend market leadership is our operational readiness to keep driving the market and serving the growth that we are creating. The third piece is, we have a large, recently expanded, talented field team and a beloved brand that's beloved by 600,000 Podders and respected by healthcare providers around the world. We are using our leadership in the market to keep expanding our commercial footprint. We've recently invested in clinical and competitive selling training for our field because we've been used to selling on form factor. The reality is, Omnipod 5 delivers life-changing clinical benefits that we haven't been selling all of.
Between our confidence in sustaining technology leadership, operational readiness for continued growth at scale, and leading commercial footprint that is now even readier to sell clinically and competitively in a more crowded marketplace, we're confident in sustaining and extending leadership.
That's great. Thank you for that. Excellent. The market, of course, is getting a little bit more competitive. Two more competitors hoping to launch patch pumps in the U.S. by the middle of next year. Some additional new features there. Seven-day wear, a couple of well-liked algorithms. One offers flexibility to switch between tubed and tubeless. One of them has a 300-unit reservoir. Maybe one way to get at the question is, you've been really successful for a long time with one form factor, which limits complexity and helps your margins a lot. As the market gets more competitive, do you see Insulet offering a broader portfolio over time, or do you think the current approach is the winning approach?
There's a lot of success in simplicity, Lee, and I think we always work back from what our market needs. And what market needs are improve outcomes, reduce burden, and remove barriers to access. We just work back from those three things. And improving outcomes, we're focused on algorithm innovation to keep improving outcomes. In terms of reducing burden, the fully disposable, easy-to-use form factor and algorithms that require less of people, those are the best ways to reduce burden. And in terms of removing barriers, that's why disruptive innovation like our fully closed loop for type 2, removing barriers to technology by bringing it to tens of thousands of potential new prescribers, are so important.
I think, when we just take a step back and we look at what are the market needs and how do we best meet them, we have confidence that the technology and the portfolio that we are working toward are the right ones.
Yeah. Okay. Great. Excellent. Just one on pricing. You mentioned on the Q2 call that as new competitors have entered the pharmacy channel, both Insulet and other players have remained disciplined on price so far. Can you just elaborate a little bit on what you are seeing in the pharmacy channel lately?
Lee, as we shared on our Q2 call, the pricing environment is stable, and for us, that means flat to slightly up. At this point in the year, we are well into negotiations for 2027, and those are proceeding in accordance with our expectations.
Yeah. No change expected on that front. Okay, great. Let us hit international briefly. The international business has been a major source of growth for Insulet. 75% of the OUS DASH installed base has now converted over to Omnipod 5, but there is still plenty of opportunity outside the U.S. Maybe can you frame some of the big drivers OUS?
Yeah. As you mentioned, Lee, so far through Q2, our international business has been standout, growing more than 30% + YoY. As we look ahead to 2027, that, because we are 75% converted from DASH to Omnipod 5, we will get a bit less of the price mix realization that we get from that conversion in 2027. We will still get it, but it will be less. Most of our growth in 2027 will be volume. We are driving high levels of volume growth today, and we expect to continue doing that in 2027. A couple of catalysts for that. In July, we just entered Spain with Omnipod 5. That is a direct market for us, typically one of the top five med tech markets, and that is a great new entrant that we are excited about driving in 2027.
Second, we are launching our FreeStyle Libre 3 integration in both Germany and Canada between now and the end of the year. Those are both markets where sensor choice is important, and this will be the first time that we have a Libre integration in those markets, just because FreeStyle Libre 2 was actually not available. We are excited about being able to drive some incremental growth in both of those. Finally, we have high share and are focused on continuing to win share to drive new customer start growth YoY. Together, that is what gives us confidence in the high level of growth that we communicate as the framework for thinking about 2027. Taking a big step back, the market is only 25% penetrated, and we are continuing to work on the more systemic things that have to be done.
In the U.K., peds penetration is now pretty good. We are focused on helping get adult penetration up. In other markets, it is different in each one. We are working on both driving growth, winning share, launching technology, and breaking down the systemic barriers to help adoption rise.
Okay. Amazing. Last two here, just to close. First, we are expecting a LRP update on the Q4 call. Between now and then, what are the real operational metrics that you are monitoring most closely to give you confidence in that refreshed LRP?
Yeah. Lee, we are focused on delivering, is the short answer. We are always watching how we are doing on retention, how we are doing on new customer starts, and pricing ASP and utilization, which we have just talked about. These are the metrics by which we run the business, and in this moment, we are really focused on those. As I described, we are also watching some more real-time indicators, especially for retention, so that we know that our execution plan, four points that we spoke about earlier on retention, is having an impact.
Okay, great. Excellent. Just wrapping up. Over the next 12 months, you've got some work to do on several fronts. Improving the first 90-day type 2 experience, rolling out Discover, responding to these competitive launches, preparing Omnipod 6, maintaining that strong quality control. What are the couple of two, three milestones that would give you confidence that the company is on track to maintain market leadership?
Yeah. Lee, what has been true for my whole 10 years at Insulet is that success comes from seeing what needs to happen and then executing those things. In this case, on the how do we address type 2 retention, we see clearly what needs to happen, and those are the four things that we've talked about. That's changing the playbook for sampling, that's adjusting field incentives, it's adding the support during those first 90 days, and it's accelerating the launch of Omnipod Discover in the second half of the year. We see it, and we're focused on executing it. For Omnipod 6, we see the opportunity for a really impactful launch of Omnipod 6. As you mentioned, we've already got regulatory clearance for the algorithm, and we're focused on executing the regulatory clearance for the system and getting ready operationally for a really impactful launch.
We're also focused on getting the fully closed loop for type 2 pivotal study complete and getting that ready for submission in 2027. When we do those things and we deliver the operational metrics we're always focused on, that's what gives me confidence that the next decade's our best, Lee.
Excellent. All right, great. Well, thanks so much for being here, Eric. We really appreciate it.
Thanks, Lee.