Core Viewpoint - The proposed payment reform by CMS aims to transform the pricing strategy and market dynamics for diabetes devices, particularly insulin pumps and continuous glucose monitors, by introducing competitive bidding and a subscription-based payment model [2][5][6]. Policy Overview - The CMS plans to introduce two major changes in the Durable Medical Equipment (DME) payment sector: inclusion of insulin pumps in competitive bidding and a shift from one-time purchase to monthly rental payments [5][6]. Implementation Timeline - Key dates for the proposed rule include: - June 27, 2025: Proposed rule published for public comment - August 26, 2025: Deadline for comments - November 2025: Expected finalization of the rule - 2027: Start of competitive bidding with a three-year contract period [7]. Impact on Different Product Lines - Insulin Pump: Companies like Tandem Diabetes Care and Insulet expect limited short-term impact but are preparing for potential pricing pressures due to competitive bidding [8][10]. - CGM Manufacturers: Most CGM companies currently utilize Part D for monthly subscription reimbursements, facing minimal immediate impact but potential future pricing standardization pressures [9]. Industry Trends - Subscription Payment Model: The shift from one-time purchases to monthly rental payments is becoming a trend, enhancing accessibility and smoothing patient financial burdens [10]. - Business Model Differentiation: Companies like Tandem Diabetes Care are adapting to the new model, while others like Medtronic may face significant challenges due to reliance on DME channels [10][11]. Competitive Bidding Effects - Competitive bidding may lower Medicare expenditures but could also reduce patient choices if suppliers cut product offerings to lower costs [12]. Potential Spillover Effects - If successful in diabetes devices, the new payment model may extend to other high-value DME sectors such as respiratory devices and surgical robots, reshaping the medical device business model [13]. Insights for the Chinese Market - The article suggests that China's healthcare payment reforms may follow similar trends, particularly in high-value consumables and devices, emphasizing the need for companies to adapt their business models and service capabilities [14][15].