Insulet likes the Neighborhood
WOBURN, Mass. - Talk about a sweet deal. Insulin pump manufacturer Insulet in June acquired Neighborhood Diabetes for $63 million.
There are a lot of synergies between the two companies, said Tom Cronin, CEO of Neighborhood. Insulet, which makes the tubeless OmniPod, has 25,000 customers for its pumps; Neighborhood provides testing supplies, insulin and other items to 60,000 customers.
"This is a good opportunity for Insulet to increase their sales by adding that on," he said. "And for us, it's like growing 50% overnight in terms of being able to offer them the add-on products."
Neighborhood, which offers a high-touch service model that includes education and support, is no stranger to insulin pumps. In addition to the OmniPod, the provider also offers pumps from Medtronic, Animas and Roche, and it will continue to do so.
Neighborhood has seen its pump business grow substantially over the last three years, and has gotten really good at processing insurance paperwork for insulin pumps, said Cronin.
"We are good at maximizing the yield in terms of the number of people who successfully get through the paperwork process and actually get a pump and minimizing the cycle time," he said.
With a new pump currently awaiting FDA approval, Insulet will be able to take advantage of Neighborhood's billing expertise to meet what it expects to be a dramatic increase in demand, while ensuring that patients have access to high-quality care.
"(With us) they are getting a really cool model that was improving patient outcomes," said Cronin. "And a tight relationship with healthcare providers and payers that will really help Insulet as they try to spread what they do across the healthcare continuum."
For Neighborhood, which will continue to operate as a standalone business under its own name, the deal is also a further step away from Medicare.
"We have definitely been moving away from reliance on Medicare and we will continue that," he said. "I still think over time, Medicare is a great business. I just don't know where the dust is going to settle."