Europe and the United States account for more than two-thirds of the global CGM market share, and the average selling price of CGM products is significantly higher compared to domestic prices. If domestic companies can expand into overseas markets, they will unlock greater demand and higher price space.
Jiangsu Yuyue Medical Equipment & Supply has learned that Sinolink Securities has released research reports, predicting that the penetration rate of CGM system products in global blood glucose monitoring will continue to rise in the future. CGM will also become the mainstream way of blood glucose monitoring, replacing BGM and other products in the future is just a matter of time. The product price space in Europe and the United States is large, and the medical reimbursement policy for CGM is highly favorable. It is expected that a good payment environment will rapidly increase patient acceptance, leading to significant market opportunities for CGM products in overseas markets. Currently, domestic companies are still in the early stages of product layout. In recent years, they have made significant progress in obtaining the EU MDR certification. In the future, there may be a gradual gap in medical insurance access and the US market. It is recommended to focus on companies with strong CGM product innovation and iteration capabilities, as well as leading overseas channel layout.
Sinolink Securities' main points are as follows:
Diabetes management market has large single products, opening up higher price space in overseas markets.
As CGM products can provide real-time blood sugar information to diabetes patients, they have significant advantages over traditional BGM fingertip blood sampling in clinical settings. In recent years, their share in the global diabetes device market has increased rapidly, from 9.5% in 2015 to 30.4% in 2023. The CGM device market has reached $5 billion and is still growing rapidly, making it the core growth product in the diabetes management market.
Europe and the United States account for more than two-thirds of the global CGM market share, and the average selling price of CGM products is significantly higher compared to domestic prices. If domestic companies can expand into overseas markets, they will unlock greater demand and higher price space. Continuous product updates and iterations, broader coverage of target patient needs, and close collaboration with product manufacturers in the industry chain will become important competitive strengths for business development.
Analyzing overseas markets from the payment end: Medical insurance access policies play a key role in the volume of CGM products.
Currently, CGM products are more expensive compared to traditional BGM blood glucose monitoring, and the payment ability for CGM products and medical insurance coverage in the treatment process of diabetic patients has become a core factor for product volume. At present, the medical insurance reimbursement policies for CGM products in the European and American markets are relatively mature.
In the USA market, the representative government medical insurance Medicare currently covers a very wide range of diabetic patients. Medicare Part B reimburses CGM at a rate of 80%, with patients only needing to pay 20%, greatly reducing the burden on older diabetic patients. Medicaid policies vary greatly among states, but currently, over 45 states in the USA support CGM medical insurance reimbursement. However, FDA requirements for iCGM approval are also high, forming high entry barriers in the USA market. Obtaining EU MDR certification in the European market is relatively simpler and faster, but gaining medical insurance access in individual countries still requires a long period.
The primary terminal usage scenario is outdoors, with scarce high-quality sales channels.
In the promotion process of medical devices mainly sold outside the hospital, it will rely on the control of channel resources. Due to the chronic nature of diabetes, from the perspective of end use, blood glucose monitoring in daily home environments is the main scenario for CGM use, accounting for 46.7% of the total market share.
Patients who have already been diagnosed by doctors are more inclined to directly purchase CGM products from pharmacies near their living environment, while some patients can also buy them through online platforms. For products mainly used outside hospitals, a strong offline sales channel and online promotion capabilities are essential. In the USA market, the sales of in-hospital medical devices are also mainly through direct sales. Some companies, such as Sinocare Inc., have already strategically positioned themselves in overseas high-quality brands and channel resources through acquisitions.
Review of overseas leader Dexcom - exploring new customer demands through product iteration and updates.
Dexcom has been a leading enterprise in the global blood glucose sensing field for over 25 years. From the FDA approval of the company's first CGM product in 2006 to the latest G7 product sales, the company's CGM products have undergone 7 generations of updates. In Q2 2024, the company achieved sales revenue of 1.002 billion USD, a +15.26% year-on-year increase. In the second half of 2024, the company launched the first over-the-counter CGM new product, stelo, mainly targeting the demand from some non-insulin using population, which is expected to increase the demand for CGM use among new customer groups in the future.
Key symbols: Sinocare Inc. (300298.SZ), Jiangsu Yuyue Medical Equipment & Supply (002223.SZ), Lepu Medical Technology (300003.SZ), etc.
Risk Warning: Exchange rate risk; domestic and foreign policy risks; innovation risks and continuously rising costs; risks of industry relocation due to rising domestic costs; risks of merger integration falling short of expectations.