The integration of Remote Patient Monitoring (RPM) has transformed the diabetic test strip market from a commodity sales model to a service-based economy. Driven by CMS reimbursement codes (specifically CPT 99454), providers receive monthly payments for monitoring patient data, incentivizing the distribution of cellular-connected glucose meters.

Key economic shifts include:

• The "Unlimited Strips" Model: Companies like Livongo and Dario bundle strips into employer-paid subscriptions, treating the strip as a Cost of Goods Sold (COGS) rather than a profit center. This incentivizes the use of low-cost, high-accuracy white-label strips.
• Hardware Costs: The industry has pivoted from Bluetooth meters to cellular-enabled (IoT) meters. Despite higher manufacturing costs, cellular meters reduce technical friction, ensuring the data consistency required for billing.
• Reimbursement Incentives: The requirement for 16 days of data transmission to bill Medicare creates a floor for test strip consumption, preventing the market from collapsing entirely despite the rise of CGMs.

Legacy manufacturers (Roche, Ascensia) have adapted by partnering with digital health platforms, positioning their strips as the reliable hardware layer within broader care management ecosystems.