The Medtronic Minimed split

Diabetes Technology
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Continuing the discussion from Passports? this is about the Medtronic split of their diabetes division into MiniMed, 25 years after buying them, currently expected in 2026:

It hasn’t happened yet. Medtronic are saying “mid to late 2026”, here’s the original announcement:

The new company will be MiniMed (again :slight_smile: That isn’t in the May announcement, here’s where I found it:

https://cardiovascularbusiness.com/topics/clinical/heart-health/medtronics-diabetes-spin-gets-name-kicking-new-and-exciting-chapter#:~:text=Search-,Medtronic’s%20diabetes%20spin-off%20gets%20a%20name%2C%20kicking%20off%20’,have%20our%20strongest%20core%20competencies.”

My take on this, and please correct me if I am wrong, IANAB (I Am Not A Banker), is that Medtronic are saying that while they make a lot of money from diabetes it amounts to rather more of their costs. So by splitting into two they offer the stock market two more attractive, but very different, companies; attractive to different people.

This seems a fairly common thing to do in the modern stock market.

I would expect MiniMed to be more focused on dealing with the challenging, often FOSS, innovation in the diabetes AIDS market and less on making short term profits while Medtronic goes back to their core Covidien competence of making cheap medtech at great profit. Something like (IMO) MiniMed makes the Teslas and Covidien/Medtronic make the BYDs.

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I believe that their intention is to manage risk preemptively. People are aiming a shotgun at healthcare and lot of large players have taken big falls, or stand to in the near future. They know that there is a lot of dissatisfaction from their customers. There’s been a lot of industry collusion. I’ve, personally, been writing about them to the DOJ. Here’s what one diabetic friend of mine wrote,

“The worst thing to happen to MiniMed was Medtronic buying them. Innovation lagged, FDA approval timelines got longer, and customer service went down the tubes. This was before their diversification buying a medical supply compalny. The system still work for me, so I stuck with them. I am looking forward to the diabetes unit spinning back out on it’s own to Minimed.”

There are a lot of people in this community who have trolled MDT in their free time for over a decade. We have, as a community, cost them a tremendous amount of market share…for fun…and possibly for revenge. I dunno. It’s complicated.

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I couldn’t find anything about the structure of the deal beyond the basic its going to be an IPO then the split. Spinning off your diabetes business is popular these days, see the weird Bayer/Panasonic deal creating Ascensia or the more straightforward BD spinning off Embecta.

But! Check out the MDT investor presentation PDF on the split https://mma.prnewswire.com/media/2692738/2025_Diabetes_Separation_Investor_Presentation_FINAL.pdf?p=original Page 14 has two new pumps, the Minimed Flex and Fit. Flex looks like the 780G replacement, no screen so small. Fit looks just like the Omnipod but isn’t disposable. @Laura_S another option to keep an eye on.

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It’s usually terrible for the smaller company that is spun off and quite good for the larger company.

That’s generally why they do it.

At least they didn’t so what Johnson nd Johnson did with Animas and just close it down one day.

But there is more and more competition in the pump and sensor space.

Since Medtronic took over Minimed we saw omnipod , Tandem and Bionic and now twist pump by Sequel.

So there is a ton more competition.

Medtronic pumps are used to deliver more than just insulin including chemo, so I wonder if that business will also be moving to Minimed

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Here’s MorningStar’s take from 2023, yeah 2.5 years ago but it seems to explain the thinking quite well:

https://global.morningstar.com/en-gb/economy/spinoffs-are-the-new-ipos

What I don’t understand is the IPO part. Spin-offs are relatively easy to understand although they have to be structured carefully to avoid US tax consequences (a big deal for long-term US investors). A share offering after the spin-off seems to establish a price, maybe that’s the point.

Here’s a fairly complete analysis of an “equity carve-out” which seems to match what MDT are considering:

Macabus also has explanations of spin-offs; there are links in the above article.

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I saw it in a focus group I did recently. Guess the sensors are Libre?

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Not if MDT is the only pump allowed on a formulary. That’s stops competition dead because you are the only pump with access to the market.

MDT also likes to overrule the FDA by working hand in hand with UHG to declare their pumps to be the only ‘safe’ pumps on the market as an excuse for market fixing.

When you see collusion by large players, and the government doesn’t handle it, who does? Patients.

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Technically Medtronic makes its own sensors:

They (Medtronic) seem to be attempting a lock-in with their AIDS’s; lock the pump and sensor together and sell both. Whether MiniMed will continue this when/if the split occurs remains to be seen. The fact that Elliott investments apparently just got two new directors on the board might indicate things may change.

The lock-in is particularly important for Medicare where pumps (apart from Omnipod) are on Part B so the choice is Federally controlled and, at present, pumps, along apparently with CGMs, have a 5-year lock-in. Lock in both and you get all the money. It’s a lot of money.

The lock-in may disappear next year; there are proposals to make pumps and CGMs rental items on Part B and the Omnipod, on Part D, is already as-required. This makes a mess of the US business model of Medtronic, Tandem, everyone except Omnipod; at present they only need to sell something once every 5 years then they have 5 years guaranteed revenue so long as the patient fails to die.

My perception is that it’s a massive business shake-up for US medtech if it goes through (much money is flying around trying to make it not go through!)

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The “formulary” only applies to prescription items, so in this case only Omnipods. Pumps (typically including Omnipod with non-Federal insurance) have always required “prior approval”. So the insurance companies could always choose.

On Federal insurance (Medicare and Medicaid) the CMS approves all the FDA approved tubed pumps, so far as I can see. That’s not likely to change so they sort-of compete directly, with the 5-year tie in (see my previous post) as a major anti-competitive item.

The JDRF piece doesn’t explore the actual effects of private insurance cooperative agreements like this on healthcare costs in the US. Medtronic produce a lot more than pumps; pacemakers are their origin. They have a complete portfolio to sell; all the Medtech you have to deliver at a reduced price!

The fact that Medtronic stepped back from that model to some extent at least in May suggests that most likely it wasn’t working. Perhaps they underestimated the power of UNH in the market place; UNH had a market cap of $268.72bn on Feb 1 2019 while MDT came in at $88.31bn. MDT might have thought that made them peers and the ratio has been maintained (approximately) but maybe MDT lost the ball?

It’s all very weird.

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The majority of our lives, for the majority of people, are not lived on Medicare and Medicaid. The majority of our lives are lived on private insurance policies - that means having a prescription for an insulin pump and obtaining it thru an insurance policy.

I want to state this explicitly because ALL diabetic lobbying is Medicare ALL the time.

It’s always as if, “If we just get insulin pumps covered by Medicare,” or “if we just get Medicare fixed in this ONE final way, we will come back for private insurance later,” or “Medicare sets precedence, so if we fix the problems there, it will be easier to fix it on private insurance later.”

But, the day where we fix things on private insurance never comes.

Sure, life is great if you are a Boomer on Medicare, but I have been told my entire life that Medicare would not exist for me. I’m so tired of always having to talk about Medicare. There’s no space in the room EVER to talk about anything else (this is not a criticism of what you are writing, John, and it’s not directed at you specifically - this is just ALWAYS how discussions end up at a federal level & It drives me crazy.)

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I understand. Until April this year I was on a private, self financed, plan. That has been the case since 2001. I care, deeply, about being able to afford my own health insurance and have since I stopped being employed by the man and became self employed (2001). Prior to that it didn’t matter much.

The inherent instability of the US approach to healthcare has been a concern to me since I moved to Oregon. This was prior to the ACA (March 23, 2010) and, back then, things were so much worse. In those days if you didn’t have employee health insurance and weren’t covered by Medicare, Medicaid, CHIPS or the VA you were SOL.

By 2010 Medicard had imploded. To get Medicaid in Oregon you had to win the lottery. That is not sarcastic, not even ironic; it is deadly serious. Oregon had a lottery prior to the ACA for Medicaid. That taught me more about US healthcare than all the medical treatment I have ever had here. So many of the people where I live didn’t win the lottery. The CMS handles Medicaid and CHIPS as well as Medicare.

At the end of the day the Federal Government provides about 1/3 of the payments for the healthcare that is available in the US and those of us who receive it provide another quarter. The man provides one fifth and those states who care to contribute provide one sixth.

End of the day we live in the US and we pay for all the healthcare we receive in the US. All we are ever arguing about is who gets the most.

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So I had a thing happen this week and I’ve wanted to post about it but couldn’t find a way to make it help anyone including myself but I think it fits in here. Why do we put up with the pharmacy channel only contracts? What do the companies get out of it?

I was trying to get a MDT InPen. My plan says “Equipment and supplies used for the treatment of diabetes… Pen delivery systems for insulin administration (non-disposable)… See Medical Equipment copay” DME is no charge. So I call ADS, an in network provider who sells the inpen, a couple of times, they keep trying to say they need my pharmacy plan info. I know InPen isn’t on the written formulary nor the formulary search. I dig through the MDT website and realize all the docs talk about getting the InPen from a pharmacy. I conclude MDT has locked the InPen into pharmacy only contracts and go through the 7 stages of being screwed by the US healthcare system. At some point I realize this is just like the Omnipod and the Twiist. I get my G6 from ADS and they bill my health plan. ADS sells Omnipods. Why can’t they bill my health plan for an InPen or an Omnipod?

I believe a disgusting amount of the healthcare spend from the feds, the states, individual companies, etc. is being funneled into a relatively tiny number of pockets thanks to a handful of megacorps and the institutional investors demanding returns on their money regardless of the harm. Nothing in the MDT investor presentation says the split will be better for patients other than some fluff.

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Just to try and lift your spirits, I’ll mention a couple of positive notes.
It’s super depressing to dwell on a lack of free markets in your own head.

Civica is making insulin (as you know). No Lispro yet, but perhaps soon. That’s gonna act as a market disruptor because that is a nontraditional channel for supply.

Word on the street is that DOJ plans to hire a bunch of doctors and nurses in an effort to wrap their hands around the problem and understand better how to enforce the law in healthcare. They have identified this as a real problem. That strategy may take some time. As we know, it’s all very complicated.

We will have a Federal antitrust ruling soon.

I think MDT is nervous about getting pulled in. It’s very easy to find evidence of market fixing surrounding MDT. They will run a gubernatorial candidate in MN. There’s no way that this issue doesn’t pop up once the partisans start trying to sink their teeth into one another. It’s sitting there, like a mouse trap, just waiting for someone to step on it. They know it.

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I’ve been trying to fill an lispro script for a month.

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Walgreens?

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It seems to be entirely at the whim of the insurance company how a non-single-use item is treated. The original Omnipod was sometimes treated as “medical equipment” and sometimes as “prescription”; this was the repeated issue a few years back. Some people had to go through the dreaded EdgePark gates of money and others could go to far friendlier Wal* and get reamed that way. I suffered both.

ATM reusable insulin pens seem to be out of favour but I did find that the Novopen Echo (approved by the FDA since 2013 and requires a prescription unlike normal reusable insulin pens) can be treated either way too. At least according to the Artificial Idiot.

I suspect the same thing applies to the Medtronic inPen, which is pretty much the same as the Novopen Echo Plus (not yet approved in the US.) Neither is “durable” in any reasonable sense because neither lasts more than a year, both are equipment but then so is a fingerstick meter and I think every fingerstick meter I have is 10 years old or more and still works, correctly.

Do we? They aren’t ACA compliant and they shouldn’t be; splitting out healthcare into different pieces that have to be paid for independently (even if part of the same “plan” as in pre-ACA coverage) is fundamentally broken; for example Medicare is fundamentally broken and it isn’t ACA compliant and, yep, it got a carve-out in the ACA and has pharmacy only contracts (“Part D”).

For ACA compliant plans there is one “deductible” and one maximum per-year out-of-pocket payment. If we choose our own plan we can swap every year; remember, remember the first of November. If our employers chose we end up with whatever our employers choose.

The ACA compliant plans slice and dice their way of paying for what is pretty much always the same healthcare in an attempt to minimise the total costs they pay. It doesn’t matter if they are a non-profit or a for-profit they must first minimise the costs given that they can no longer control the requirements. (No pre-existing condition exclusions, no age exclusions, no wealth exclusions, no credit-worthiness exclusions. Think about your car insurance. No race exclusions either and no sex please, we’re American.)

The actual cost, without insurance, of a Novopen Echo on Amazon (prescription required) is $55.28. The echo lasts 8 months I think. I can’t get the price of the echo plus because it isn’t approved in the US and Amazon won’t even admit it exists unless I do squirrely things with amazon.co.uk. diabeteswise suggests it is $78/pen. Both of these are pretty much trivial compared to the cost of the insulin (which is always a prescription benefit, except on the very non-conformant Medicare.)

Medtronic (and this is why this is still relevant to this topic) appear on Amazon with a one-month supply at $850 but $48 “average [with] insurance”. I’m guessing that they are bundling the Guardian sensor in there because the pen itself, reusable or not, costs nothing in comparison. However it doesn’t matter; the pen is tied to the Medtronic only sensor and that’s a big deal for the insurance companies.

FWIW the Novopen Echo Plus (not permitted in this great country) has integration to some extent with various approaches to CGM; Glooko, Abbott and (Germany only) apparently direct to the G7.

Ah well, even Medtronic probably doesn’t work very well when Amazon goes down :slight_smile:

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It’s the doctor.
He just won’t write the Rx.
Yesterday I scheduled an e-visit. Maybe that works. I’m out of insulin when this pod expires.

I don’t like the idea of scheduling an appointment every time I need a refill on one of my ten prescriptions - those SHOULD be lasting a year anyway. I sense a scam at play. This endo has a very difficult time writing scripts.

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I think that this history of how pump/sensors were covered by my plan was as non-durable medical (NDM).

Both Omnipod pods and MDT infusion sets were classified this way - NDM. Why? That classification made them more $.

Sensors, for example, used to be approved to last longer. They specifically shortened the lifetime/period of time they were advised for use, so they could be reclassified as NDM. That made more $.

Non Durable Medical makes more money in the same way that Software sold as a monthly Service (SAS) makes more money than selling the product to you a single time.

When they recently reclassified it as “Pharmacy Benefit,” that change became a software bug that broke a bunch of pharmacy software used for billing. That led to me not being able to get a replacement pump for six months. However, once I did, it was a lot easier to purchase because I could get it thru the pharmacy as opposed to a medical equipment distributor.

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So, the situation raised by @spdif is more complicated than a pump or a sensor, right?

Pens are BOTH a device and a medication.

Have pens been pulled into the challenges by FTC and FDA on dishonest patents? They have challenged over 200 patent ‘mis-filings’ this year.

Lets ask chatGPT about pen patent status in FDA/FTC disputes…

"Yes, insulin pens have indeed been involved in patent disputes that intersect with the actions of both the Federal Trade Commission (FTC) and the Food and Drug Administration (FDA). Here’s a detailed overview of the situation:

Overview of Patent Disputes

FTC Scrutiny on Patent Listings

Recently, the FTC has been actively challenging the listing of patents, particularly in relation to insulin products such as Sanofi’s Lantus. The agency’s scrutiny centers on claims that pharmaceutical companies have improperly listed device patents in the FDA’s Orange Book, which may delay the entry of biosimilars and generics to the market. Such actions are seen as ways to maintain monopolistic practices and keep drug prices high.

  • Lantus Case: An antitrust lawsuit was filed by Mylan against Sanofi, claiming the latter engaged in monopolistic behaviors to protect its Lantus insulin product by listing invalid patents in the Orange Book. These listings allegedly create barriers against competition from biosimilars.

FDA Regulations

The FDA requires that only patents claiming the active ingredients or methods of use related to a drug be listed in the Orange Book. A recent court ruling asserted that device patents (e.g., for the insulin pen’s drive mechanism) that do not claim the actual drug substance could be deemed improperly listed.

  • Impact: The improper listings can enable brand-name drug manufacturers to delay generic competition and extend market monopolies through legal disputes, affecting overall drug pricing and availability.

Key Incidents

  • The FTC has sent letters to multiple pharmaceutical companies, warning them about potential legal actions for improper patent listings. Over 100 patents have been flagged, primarily related to asthma inhalers, EpiPens, and injectable diabetes medications.
  • Following a ruling in the Lantus case, the FTC has indicated that it will be more vigilant regarding companies’ patent practices, which can inherently affect the availability and pricing of insulin pens.

Conclusion

The involvement of the FTC and FDA in patent disputes regarding insulin pens aims to enhance competition and reduce drug costs, but it also raises critical questions about how patent systems can be manipulated in pharmaceutical markets. Legal battles surrounding these patents not only shape the future of diabetes management products but also set precedents for how similar cases will be handled in the healthcare sector."

Let’s ask chatGPT about IPens specifically…

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Source: Medtronic Data Privacy Lawsuit Spotlights Growing Concerns in Healthcare Tech - Telecom Review Middle East

The patent: US20160012205A1 - Medicine administering system including injection pen and companion device - Google Patents