What’s Medtronic’s Strategy to Drive Growth in Diabetes Group?



Multi-pronged strategy

Medtronic’s (MDT) Diabetes Group strategy involves four major priorities:

  • Drive continuous product innovation.
  • Lead in analytics and insights.
  • Provide and enable integrated patient care.
  • Expand and accelerate global access.

As a part of this strategy, the company aims to develop differentiated diabetes management products that will deliver outcomes. The company is also focused on developing an ecosystem of connected devices that will interact with patients and help generate actionable insights. This data and insights have to then be integrated in the overall patient care continuum to improve overall quality of care. Finally, the company aims to create awareness so that it can be satisfactorily reimbursed by payers for improvement in health outcomes.

If the company’s Diabetes Group manages to successfully implement this multi-pronged strategy, it could have a positive impact on Medtronic’s stock prices as well as those of the Vanguard Total Stock Market ETF (VTI). Medtronic makes up about 0.43% of VTI’s total portfolio holdings.

The above diagram shows how Medtronic has implemented its Diabetes Group strategy from 2015 to 2017. The company also plans to work in accordance with this strategy until 2022.

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Strategy execution

Since 2015, Medtronic has managed to launch multiple innovative products targeted at diabetes patients such as the Minimed 630G, the Minimed 640G, and the Guardian Connect system in international markets, and Minimed 670G. The company has also made significant advances in the analytics and insights field. Medtronic has developed decision support tools such as Pattern Snapshot to help general physicians treat type two diabetes patients and has entered into a partnership with IBM to deploy cognitive computing for diabetes management.

Medtronic also aims to move closer to its ultimate goal of offering integrated care to diabetes patients in the next two years. The acquisition of Diabeter, a diabetes clinic and research center, has helped Medtronic enter partnerships with institutions like Canary Health for diabetes management and prevention programs. The company is also implementing a pilot version of value-based healthcare programs in collaboration with Methodist and other hospitals.

In the US, Medtronic has entered into outcomes-based contracts with UnitedHealth Group and Aetna. Further, the company has been striving to expand access to its diabetes products in other international markets such as China, Germany, Australia, and Chile.

The targeted diabetes strategy is thus expected to enable Medtronic to compete effectively with other diabetes device players such as Insulet (PODD), Johnson & Johnson (JNJ), and Roche Holdings (RHHBY).

In the next article, we’ll discuss the long-term growth strategy for Medtronic’s diabetes business in greater detail.


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