In June 2011, a major international study was released which took on the task of collating and analyzing worldwide data on diabetes gathered since 1980. The key finding of the study was that the number of adults worldwide with diabetes reached 347 million in 2008, more than double the number in 1980. The study found that is now present in 9.8 per cent of men and 9.2 per cent of women. The study was published in Lancet and was carried out by an international collaboration of researchers, led by Professor Majid Ezzati from Imperial College London and co-led by Dr. Goodarz Danaei from the Harvard School of Public Health, in collaboration with The World Health Organization and a number of other institutions. Note that the most common type of diabetes, Type 2, is strongly associated with obesity and a sedentary lifestyle and is entirely avoidable.
It is worth noting that, of the 347 million people with diabetes, 138 million live in China and India. These two countries may be the next economic superpowers on the rise, but if they continue at that rate it won’t last long. Diabetes is one of the greatest enemies of economic well being in the world, costing many times more than what it takes to provide medical care to someone without diabetes. According to a study done by UnitedHealth Group, the total estimated annual cost of treating a diabetic is greater than $22,000 a year, which is 13-times higher than the average cost of a “healthy” person (defined as an individual with no chronic disease). Multiply that times 138 million and any healthcare economist can tell you that is a prescription for a round trip to joining the ranks of the Third World.
In a Science Daily article about the above-noted study, one of the lead researchers was quoted as saying, “Diabetes is one of the biggest causes of morbidity and mortality worldwide. Our study has shown that diabetes is becoming more common almost everywhere in the world. This is in contrast to blood pressure and cholesterol, which have both fallen in many regions. Diabetes is much harder to prevent and treat than these other conditions.” His co-researcher in the study, Dr. Goodarz Danaei from the Harvard School of Public Health, added “Unless we develop better programmes for detecting people with elevated blood sugar and helping them to improve their diet and physical activity and control their weight, diabetes will inevitably continue to impose a major burden on health systems around the world.”
As Dr. Danaei points out, it is critical to find better ways of detecting people who are at risk of becoming diabetic before it is too late to prevent. By failing to detect diabetes before its onset, we miss the opportunity to avoid the unbelievable costs of treating the disease. For example, the current U.S. estimate is that diabetes costs will rise to $336 billion in 2034 — almost triple the amount researchers estimate was spent in 2009. If we could save even a portion of that by preventing the onset of Type II diabetes, we might be able to stay afloat as a country.
Today, in the U.S. alone, there are an estimated 79 undiagnosed pre-diabetics. In other words, look left and look right: there are 79 million people who are just one or two Denny’s Mac n’ Cheese Big Daddy Patty Melts away from a life of serious illness. If you think that isn’t contributing to our own economic malaise, you are wrong.
According to the American Diabetes Association, 1 out of every 5 health care dollars is spent caring for someone with diagnosed diabetes, while 1 in 10 health care dollars is attributed directly to diabetes. If you are not shocked, you should be. I see people picketing Washington about lowering taxes. They would get a lot more bang for their buck if they picketed Denny’s and Burger King. Tea Party? We need a Broccoli Party.
I was watching our very own Postmaster General testify before Congress (actually watching it on the Daily Show, which is much more entertaining) and one of his key points was that it is the cost of their healthcare benefit program that is leading to their imminent bankruptcy. While I don’t have the details, I can guarantee you that the direct and indirect cost of diabetes is way up there on the hit parade of reasons they can no longer afford to offer the country’s richest health benefits.
Because of the huge opportunity to save money through diabetes prevention, governments and insurance companies everywhere have gone on a mission to find pre-diabetics and offer ways to get them off the too-much-gravy train. Whole countries, such as India and the United Arab Emirates, have begun mass screening programs with an aim to screen their entire citizenry for diabetes on a regular basis. In the U.S., the Diabetes Prevention and Control Alliance, administered by UnitedHealth Group with the cooperation of the YMCA, Walgreens and the U.S. Centers for Disease Control (CDC), among others, is out there performing mass diabetes screening far and wide. UnitedHealth believes that this program could save the country up to $250 billion over the next 10 years, if programs to prevent and control diabetes are adopted broadly and scaled nationally.
But as with all things virtuous, there is a catch. There has been no highly practical way to conduct mass screenings for diabetes and thus the methods in use are, while well intended, unable to effectively serve the purpose. Fasting requirements, blood-handling challenges, lab waiting time and lack of enough moderately trained healthcare professionals to perform the tests are the biggest challenges to making these programs a success.
The primary method of detecting diabetes today is a blood glucose test, which is a blood test taken after a person has fasted about 10 hours. Generally these tests must be performed first thing in the morning (because of the fasting) and in a lab or other controlled location (e.g., physician’s office) where the blood can be properly handled as it is transported for testing (heat, extreme cold, sloppy handling can all affect the results, not to mention lack of fasting which is a chronic challenge). While the blood test methodology is fine for some, it is an impractical way to engage in the screening of mass populations. If you need everyone being screened to fast for 10 hours prior to testing, for instance, it is pretty difficult to conduct a blood test after 9 am in the morning because people are just damned hungry. If you have to screen all 1.2 billion Indian citizens before 9 am, it is going to take you until long after Armageddon to get the job done. If you need to wait 24 hours to get the results from a lab, you are going to have to have one hell of a big waiting room and more than your share of old Highlight Magazines to keep these people around to get their results and a treatment recommendation.
Oh, and by the way, those blood glucose tests are notoriously inaccurate. So after all that, you have not much better than a 50-50 chance of getting the correct result. If I were a betting woman (and you know I am), I would not like my odds.
In my time in venture capital, I have seen many companies focused on better treating those with diabetes through the use of drugs and devices. What I have not seen much of, however, are companies and products focused in better ways of finding people who are on their way to becoming diabetic so we can have more useful tools to avoid the looming disaster, both clinical and financial, that comes from letting all of the pre-diabetics acquire full-blown diabetes. One company I have seen, Tethys, is a blood test that helps those who have been identified as pre-diabetic get a better prediction as to the likelihood that pre-diabetic condition will become diabetes within 5 years. That’s a good start, but it still begs the question about appropriately and accurately finding those at risk to begin with. Plus it’s expensive and it’s still a blood test that requires a lab review, so it is not a tool to screen the masses.
The only company we have seen that has tackled this issue head on is VeraLight, an Albuquerque, New Mexico company that has a product that non-invasively identifies those with pre-diabetes and diabetes. The company’s product, SCOUT DS, requires no blood, no fasting and effectively no waiting for a result, as the result is delivered on the spot in less than 4 minutes. Sounds just like In-and-Out Burger, except the goal instead is to cure people from overindulging in In-and-Out Burger. Psilos Group invested in VeraLight because we see it is an incredible opportunity to rapidly accelerate the identification of pre-diabetics in order to help prevent them from their otherwise costly and unhealthy destiny. Not only can this be a great investment, we believe, but will be a critical tool in the arsenal of improving public health and the U.S. economy. Sometimes if it is possible to make money and make a positive difference at the same time, (hear that Goldman Sachs?) and this has the feel of one of those opportunities.
So what is this SCOUT thing? SCOUT is a smallish device, about the size of two shoeboxes, which uses fluorescence spectroscopy to detect advanced glycation endproducts (AGEs) in the skin, which are used as biomarkers for diabetes and pre-diabetes. The advantage of this approach is that it does not require invasive blood tests or fasting and can produce a result in 4 minutes, allowing for much faster screening of patients. Everyone in the world accumulates AGEs in their skin, but people who are becoming diabetic do so at an exponentially faster rate. You just lay your forearm across the SCOUT device and the camera and electronics inside measure your AGEs and figure out how you look based on an age and gender-adjusted spectrum. It works on virtually every color of skin. The SCOUT is portable and can be used literally anywhere there is a forearm. Thus, it can be toted into shopping malls or government offices or company lunch rooms or Indian slums or gold-leaf ballrooms in the United Arab Emirates and used by a very wide range of healthcare professionals with minimal training. In other words, there are no blood handling issues and there are no limits to the time of day you can do mass screening since fasting is not required. Hell, you could drag this bad boy into a Denny’s and go table to table testing people for pre-diabetes if they would let you (I’m guessing no). You can watch a quick video about how the SCOUT works by clicking HERE.
The best part is this: in clinical studies SCOUT identified over 60% more people with abnormal glucose tolerance than the fasting plasma glucose test and 30% more than the other widely used alternative, the hemoglobin A1c test, at thresholds established by The World Health Organization. This means that the test is more effective in identifying pre-diabetics than the blood tests that are used today. It is also less expensive to provide SCOUT tests since there are no significant materials involved (e.g., no test tube, no reagent, no lab, etc.). Better, cheaper, faster. Now that’s what I’m talking about. Not a lot of medical devices can claim that, so you can see why we liked it so much.
VeraLight’s SCOUT is not yet available in the U.S., but it has recently launched in Canada, India and few other select worldwide markets. Hopefully it will be approved for use in the U.S. within the next 18-24 months as the FDA approval process proceeds. There has been a lot of buzz about this, as you can imagine. We at Psilos are very excited to see VeraLight’s promise becoming reality as the worldwide launch has begun. Hopefully you will soon be seeing SCOUT in a Denny’s near you.