Dexcom Paid for the CGM Trial. Abbott Is Readying Its Sales Force for the Coverage.

Dexcom paid for CONNECT, a trial of its glucose sensors in people with Type 2 diabetes who don’t take insulin. It hopes the results will persuade Medicare to cover that group. A Leerink Partners analyst says the decision would double the people covered for Dexcom’s sensors, from about 15 million to 30 million. Abbott, the main rival, told investors in July that it’s readying its sales force and distribution for the same decision, and called it a possible multibillion-dollar opportunity. Paying for a trial feels like buying an asset. I think a coverage trial buys a market, and a market has other sellers in it.

The New England Journal of Medicine published CONNECT on October 14. Adults in the study wore Dexcom’s G7 for 26 weeks, and their A1C, the standard measure of long-term blood sugar, fell on average from 8.8% to 7.2%. People in the control group, on routine care, went from 8.7% to 8%. Medicare now covers these sensors only for people who take insulin or have a history of problematic low blood sugar. Dexcom CEO Jake Leach has put the paper in front of the medical directors reviewing the request and expects an answer by year-end, with coverage starting in mid-2027.

The control arm decides who shares the result

CONNECT measured a G7 against routine care, in which the control group did a median of about three finger sticks a week. That comparison tells a reviewer whether a person in this group does better wearing a sensor, which is what Medicare has to decide. A head-to-head against Abbott’s sensor would have answered a different question. Leach’s statement called the publication “a significant moment for the CGM category,” CGM being the continuous glucose monitor. Category is the accurate word: as reported, Medicare’s current limits describe the patient and name no brand, and an expansion written the same way would admit Abbott too.

I can’t see what else is in Medicare’s file, and Abbott may have data of its own in there. Either way, Abbott CEO Robert Ford expects about 10 million more Medicare recipients to become eligible, with wider commercial coverage on top, and the company plans to sell to them.

For Dexcom, paying anyway makes sense. Its CFO says its sensors are taking share, so a bigger market pays back even with Abbott selling into it. A startup funding the same kind of trial may spend most of its evidence money on that one study, then meet a rival with a larger sales force on the day coverage starts.

What the evidence can’t buy

Medicare’s decision settles who can be covered. A payer choosing a brand is a separate decision, and a trial against routine care has nothing to say in it. A pharmacy benefit manager’s formulary is where that choice gets made. For some customers under CVS Caremark and Aetna commercial plans, the covered sensor switches in 2027 from Dexcom alone to Abbott alone, a change Ford described as having “flipped in our favor.” The reporting doesn’t say why the change was made, and I won’t guess.

Dexcom can absorb losing those customers. CFO Jereme Sylvain said the benefit manager behind the change accounts for less than 4% of Dexcom’s revenue. Leach said some patients who lose coverage can still get its sensors through their durable medical equipment benefit. Symbotic, which took 90.5% of its revenue from Walmart in one recent quarter, couldn’t say the same of its largest customer.

Leach also argued the sensors aren’t always interchangeable: a child with Type 1 diabetes might not be able to use a competitor’s sensor with their insulin pump. That protects a patient who uses insulin. The people this expansion would add don’t take insulin, so they have no pump to pair with, and the reporting names nothing else that would separate one sensor from the other for them.

In a Fractional CPO seat, I’d put two questions ahead of the protocol: if this trial works, who else can sell to the newly covered patients, and what will we have built by then that they haven’t? If the second answer is nothing, the trial is a donation to whoever has the largest sales force. If it’s an integration, a second reimbursement channel or a training program, that work goes in the budget next to the study.

The spending plan also needs room for the decision to slip. Abbott just cut its sales growth forecast, partly over slower diabetes growth that Ford tied to the lack of recent reimbursement expansions and to pricing pressure abroad. Ford told investors in July, “I just can’t forecast” exactly when the decision will come.

Dave Saunders is the founder of Base Reality Group and a Fractional CPO for product companies. He was a founder and operator at Galen Robotics, where the surgical-robotics platform earned FDA De Novo authorization in 2023, and he managed a 35-patent portfolio licensed from Johns Hopkins. He wrote Founders Who Finish and publishes The Build. More about Dave →