UPDATE 1-Roche decides against selling diabetes device unit -sources

Thu Sep 19, 2013 10:46am EDT

By Soyoung Kim and Jessica Toonkel

NEW YORK, Sept 19 (Reuters) – Swiss drugmaker Roche Holding
AG has decided against trying to sell its blood glucose
meter business, according to two people familiar with the

At least one other large drugmaker, Bayer AG,
also scrapped plans to sell a diabetes device unit this year.

In the past few months, Roche was looking to sell the
business as the industry faced increased competition and lower
reimbursement rates from U.S. government healthcare programs,
people familiar with the matter told Reuters in May.

However, the reimbursement pressure on diabetes test
supplies lessened the chances of a competitive sales process,
leaving Roche little choice but to hold on to the business,
according to one of the people who spoke to Reuters this week.

The people wished to remain anonymous because they are not
permitted to speak to the media.

A Roche spokesperson said in an email that the company
remains committed to its Diabetes Care division.

Bayer, Germany’s biggest drugmaker, had attempted to sell
its blood glucose meter business for about $1.5 billion, only to
pull the plug on the sale early this year after failing to
attract sufficient interest.

The diabetes device market came under pressure earlier this
year after the U.S. Centers for Medicare Medicaid Services
moved to cut the reimbursement for diabetes test supplies by up
to 72 percent.

The change, which took effect in July, makes it more
difficult for companies to be profitable in this business.