Dive Brief:

• LifeScan's OneTouch Ultra was the most widely used non-mail order diabetes test strip among Medicare beneficiaries from April to June 2018, according to an analysis by the HHS Office of Inspector General.

• OIG recently began analyzing the non-mail order market to comply with legislation covering CMS bidding contracts for diabetes test strips.

• The first OIG analysis shows LifeScan dominated the market for a period of last year, holding more than twice as much of the market as its nearest rival.

Dive Insight:

Legislation bars CMS from giving a competitive bidding program contract to a supplier of diabetes test strips whose bid covers less than half the market for Medicare beneficiaries by volume. To ensure it complies with the law, CMS has long worked with OIG to analyze the composition of the market before each round of competitive bidding.

These analyses relied solely on mail order claims. That changed at the start of the year when the Bipartisan Budget Act of 2018 tasked CMS with factoring the non-mail order market into its analysis.

The result is a list of the top 10 providers of non-mail order diabetes test strips to Medicare patients. LifeScan held 29% of the market over the analyzed period, trailed by Panasonic's Contour Next and Abbott's FreeStyle Lite on 13% and 11%, respectively.

LifeScan has a second product on the list, bringing its total share of the market up to 37%, and Roche occupies three spots on the leaderboard. Roche's three Accu-Chek diabetes test strips collectively held around 16% of the market.

The list is vastly different from the top 10 providers of mail order diabetes test strips. The current mail order list, which OIG has compiled since 2010, features just three of the products found on the non-mail order leaderboard.

The products that are on both lists have vastly different shares of the two markets. Prodigy Diabetes Care, for example, has 33% of the mail order market but less than 2% of the non-mail order sector. In general, the non-mail order market is dominated by larger medtech companies, such as Abbott and Roche, while smaller, more specialized businesses are prominent in the mail order space.

Both lists are lacking test strips for the diabetes devices that have dominated news in the niche in recent months. Broadly speaking, the test strips in the top 10 rankings are for older, simpler devices. While fast-selling continuous glucose monitors such as Abbott's FreeStyle Libre can take glucose readings using test strips, they are primarily designed to gather data from noninvasive sensors, reducing the need for test strips.

For now though, devices that use test strips to assess blood glucose levels remain the go-to option for many diabetics. CMS next expects to offer competitive bidding contracts for diabetes test strips around the end of 2020 at the earliest.