Robert B. Ford
Chairman and Chief Executive Officer at Abbott Laboratories
Sure, Robbie. Obviously, this has been a hot topic over the last couple of months. And let me just start off by saying, with 20-plus years of experience in diabetes, I think every time, new therapies, new technologies come to address this disease and this population, I think it's all great. And these are great new medications that are going to have very positive effect on the treatment of diabetes. There's obviously a lot of investor angst here, Robbie, about the potential impact of these drugs and what's going to happen to different industries and different companies. I feel that the investor angst is probably driven more by those that have a little bit less domain knowledge in MedTech, I would say. It seemed to be moving a lot with like headlines or any new study or publishment there or publishing of any kind of study headlines, etc. So you've seen valuations in MedTech significantly be impacted by the fear, like you said, about the reduction in these market sizes, whether it's going to happen in the next few years or it's going to happen in decades from now. And I guess, my view there is that, I understand that new technologies will naturally cause us to think differently about the future. And I think early on, those initial thoughts about the future are generally impacted more by emotion than facts and data, and I think that's what you're seeing right now today as it relates to GLP-1 and MedTech markets.
I think there is a -- if you think about it long term here on the bigger picture, I think there is a fundamental mismatch here on revenue and revenue forecasts that we're seeing versus potential impact of patient and patient TAMs. I've looked at the consensus forecast for this class of drugs, and looking out four year to five years here, they seem to be in that $60 billion to $70 billion range, which is pretty significant as a category. It's probably one of the largest categories I think we've ever seen. But then, if you take the pricing, at least the public pricing that we've seen, whether it's the US pricing or the lower international pricing, and you convert that into user bases and back into the numbers, we're looking at 10 million to 15 million people in the next four to five years that will be on this drug. That's a real small fraction of the size of these medical device markets that we're talking about, right? There's about 0.5 billion people with diabetes, maybe another 0.5 billion people that's got cardiovascular disease, and maybe there's an overlap of people with diabetes and cardiovascular, but still you're talking tens of millions of people with -- maybe 1 billion or under 1 billion people. So, I think there's a little bit of a mismatch there in terms of how we're seeing this impact equating to revenue and the potential growth of the revenue with the patient pool TAM. So, that's one big area, I would say.
I think there's another question here of just about -- the question of coverage. And obviously, these drugs have great outcomes and great outcomes impact. And then, the question is, what's the appropriate cost to achieve that outcome. I've seen a lot of discussions and news stories about payers and what the payers are going to do, and insurance companies and PBMs and pharmacy chains. Those aren't payers. The real payers are the employee -- the employers and the companies that pay for these. And I think as you look at companies and higher medical expense costs, inflation, I think that's going to be a factor as we go into next year also. So, I think that's -- those are, I'd say, the bigger aspect here on the long term. On the short term though, as you mentioned on the diabetes, I actually see it as a positive impact on the diabetes business. As I mentioned in the opening remarks, we completed an analysis recently that showed a significant number of Libre users were on these drugs, and the data showed that those that are using both products are actually using more of those both products. When you compare them to other users, they tend to wear Libre sensors more often and they tend to take their GLP-1 medication more frequently. And I think that's a great thing because higher therapy compliance ultimately is going to improve health outcomes. And that's not different, Robbie. This complementary relationship -- you know MedTech very well -- it's not uncommon to see that. Medical device procedures -- you have patients that are taking medications either before and after their procedure, and you see it in diabetes. Like I said, I've seen this in my 20 years where it's very common to use multiple tools in combination, whether it's insulin and oral meds, whether it is fast-acting insulin and long-acting insulin. And so, I think more treatment options here is a good thing for patients. And I think these drugs are a real nice addition to the mix.
I think as you go forward, though, I think there are some -- but definitely some other areas of interest related to this topic that we're exploring. I think one thing that is clear to us as we've gone through this process is to really use the data a little bit more to our advantage. Since the launch of Libre, we've collected de-identified data from the user base. I'd probably go as far as to say that we probably have the most robust glucose dataset in the world. I think the last time I looked at it, we've got close to 50 billion hours of glucose monitoring data. So, I think Libre is a perfect platform here to actually evaluate the effectiveness outside of a more controlled trial. Look at it more in a real-world setting, and there's just so many different ways we can look at the data, look at how the drugs work overtime, does one drug work better than the other, what kind of jobs they do in terms of a profile, in terms of timing range? So again, I think we can do this on a population level. We can do this on an individual level. So, I think that's going to be, I'd say, an important thing going forward for us here is to use that dataset to be able to kind of explore that.
And then, I'd just finally say, with the portfolio -- with the diverse portfolio that Abbott has where we look at healthcare across the full spectrum from Nutrition to Diagnostics to then treatment, I think that this then provides the Company with an opportunity to further explore where we can bring value to patients that are using these drugs. And I think it's common knowledge here that there are side effects, as there are side effects with most drugs, and one of those being increased loss of muscle mass. I'd say we have experience here in the area of nutrition, and losing that amount of muscle mass as a ratio is -- it can be problematic. So we've got an opportunity here to be able to develop, whether it's a nutritional product or other products that can help address one of these side effects, which is muscle mass loss.
So there's good opportunities there for us also in the portfolio. So, bottom line, I think it's fantastic science. It's fantastic biology. This is great for public health. In the short term, I think the concerns are overblown. And I think in the long term, if we want to look out 15, 20 years, I think it's -- I think there's still a lot of question marks there, given some of the facts that I've raised.
