Medtronic's diabetes division grew by 26% in Q1'18 — the highest growth rate across any business unit. While the cardiac division is roughly 5X bigger, diabetes received the most mentions on the Q1'18 earnings call.
- Medtronic reported growth across nearly all segments in Q1’18 — but one stood out*. The highlight for the quarter (based on growth) was the diabetes division, specifically related to the company’s continuous glucose monitoring (CGM) business.
- Pumps & consumables drive up diabetes-based revenues. The growth in the diabetes group was largely driven by demand for its 640G insulin pump in markets outside the US and strong performance for its latest model, the 670G insulin pump, within the US. Another big driver of growth was the pull-through replaceable sensors that measure glucose levels.
- In the past two years, Medtronic has partnered with insurers United Healthcare and Aetna to launch value-based diabetes programs. Now, it’s expanding on this strategy with other partnerships. In February 2018, Medtronic announced a 5-year partnership with the Lehigh Valley Health Networks hospital system. The goal is to improve patient outcomes and cut costs for the hospital. In exchange, Medtronic gets access to patient insights, which are expected to aid in developing new value-based business models. On the earnings call, Medtronic executives indicated that it now has over 1,100 hospitals under such a contract.