New York’s Medicaid program has taken glucose monitors and strips made by Roche Diagnostics Corp. off of its preferred manufacturing list, a move that could cost the company market share in the competitive diabetes market.
In its latest issue of the New York State Medicaid Update, regulators modified the state’s diabetic supply program to include only three manufacturers, Abbott Laboratories (NYSE:ABT), Bayer (ETR:BAYN) and LifeScan, a subsidiary of Johnson & Johnson (NYSE:JNJ). Glucose strips and monitors made by Roche were taken off the list, effective March 1.
“Preferred blood glucose monitors and corresponding test strips from the preferred manufacturers will be available without prior approval. Beneficiaries currently using non-preferred products will require a new fiscal order to obtain preferred monitors and strips,” regulators wrote.
While the ruling is limited to New York state, the decision could have an impact on Roche’s diabetes unit because more than 4.7 million of the state’s poorest residents receive health insurance through Medicaid, according to industry analyst David Klift, who runs the publication the Diabetic Investor.
“In the highly competitive glucose monitoring market where every share point counts and where volume gains or losses directly affect margins, no distribution channel can be overlooked,” Klift wrote in an email to subscribers. “The reality is that this unit is hemorrhaging market share.”