It’s a problem and an irritant for sure.
At $100.00 per sensor (that’s what I pay — out of pocket— in Canada) they must be doing okay. But it’s really about growth in the market (and maybe market share).
The manufacturing costs can’t be very high, maybe a few bucks per sensor, to make. The quality of build is pretty flimsy, it seems to me, which is understandable: these are one-time use, disposable cheap junk.
So where’s the biggest cost? I think that they’ve paid it already: development. Now they just want the income stream. They want to keep us relatively happy and the way to accomplish that is replace any failures relatively painlessly.
They do manage that. Five minutes on their website, basically no questions asked, and another sensor is on its way.
I just had one that started giving erratic readings on day five, the replacement will be here by the end of the week.
Even with shipping and packaging costs, I’m sure their marginal cost per sensor isn’t more than $15.00.
Of course the G7 should be even better, cheaper to make, and more profitable. But Dexcom is doing okay financially and it wouldn’t make financial sense for them to pay a lot more $$ for a slightly better product.
Heck, I’ve invested in Dexcom. I see how much CGM has improved my life with diabetes.
Their market cap is $45 Billion. Price to earnings is quite high (about $250) but they’re growing and expecting to chop P/E in half in the next 12 months. That doesn’t mean that they’ll continue to grow at that pace (I can’t picture Dexcom as a $100 Billion company a year from now or share price doubling, or a lot of buybacks, although that could happen) but investors finding something worthwhile is how capitalism works, ideally!