Why Abbott Labs, Dexcom ended glucose monitor patent fight

Abbott Laboratories and Dexcom will concentrate on competing in the huge market of potential continuous glucose monitor technology and put any patent disputes behind them for 10 years.

North Chicago-based Abbott announced last month it reached a settlement agreement with Dexcom over all outstanding patent disputes relating to their glucose monitoring products, which estimate blood sugar levels.

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The technology is widely used by Type 1 diabetics who rely on taking insulin to regulate blood sugar. But in recent years, both companies have seen dramatic growth in the much larger consumer populations of Type 2 diabetics who use insulin, non-insulin-dependent diabetics and others, such as dieters and athletes.

The settlement agreement puts to bed all pending cases in courts and patent offices worldwide, Abbott said in a statement, and provides that the parties will not litigate patent, trade dress and design rights disputes with each other for the next 10 years.

Abbott said there were no financial payments associated with the settlement from either company, but said further details of the settlement were confidential.

"This isn't surprising," said Vijay Kumar, Abbott analyst at Evercore ISI. "In med tech, once these products are established" companies want to sell them, keep their customers happy and not cause controversy about the products.

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Litigation between the rival diabetes management operations has been going on since June 2021 with Dexcom and Abbott's diabetes division serving patent infringement complaints against each other around the world. In March 2024, an Abbott patent claim went to trial in U.S. District Court in Delaware. Before it reached trial, the court had already thrown out a number of Abbott's claims returned a mixed verdict, according to a Dexcom third-quarter of 2024 financial filing.

On March 22, the jury found that Dexcom infringed one patent, but did not infringe on a second and third patent, Dexcom said. The jury found infringement was not willful and no determination of damages was made or awarded, according to the filing.

Now that all litigation has been dropped, Abbott said "it allows the company to fully focus on supporting people with diabetes with its technologies and services."

"It makes sense," Kumar said. "The market has moved, the Medicare populations is looking at it, and among (Type 2) diabetics, some 85% are non-insulin-using."

The job for Abbott, and competitors like Dexcom and Medtronic, is now to build awareness and make a business case for payers to cover these products, he said.

Globally, that means CGM makers will need beef up their government relationships, with most countries outside the United States being single payers to convince of the need, and utility of continuous glucose monitoring, Kumar said.

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In announcing an expansion to its CGM manufacturing facility in Ireland in November, Abbott said that, right now, more than 6 million people in over 60 countries rely on Abbott’s technology, with global demand growing.

CEO Robert Ford said in an earnings call in October that the potential for Abbott's FreeStyle Libre CGMs is a “mass market opportunity.” There are about  about 10 million CGM users worldwide, but more than 500 million people with diabetes around the world, Ford said. He said he expected the company would exceed its our target of 15% compound annual growth in 2024.

The CGM business is among the top growth drivers in Abbott’s medical devices business, with Diabetes Care posting 19% organic sales growth for the first nine months of 2024, Abbott said in a press release. With diabetes care revenue for the first nine months of 2024 at $4.9 billion, Abbott said in the release it is on track to achieve a target of $10 billion in annual sales of FreeStyle Libre CGM systems by 2028.

Dexcom, in a November 2024 third-quarter financial presentation, said it is capitalizing no the momentum of sales into the Type 2 basal and non-insulin populations.

Dexcom noted that more than 25 million people in the U.S. with Type 2 diabetes have not yet progressed to insulin therapy, and the company sees "an opportunity to address this health crisis earlier to slow, or even reverse, the progression of diabetes."

This story first appeared in Crain's Chicago Business.