UnitedHealth to start covering Tandem insulin pump, says Oppenheimer

Effective July 1, UnitedHealth (UNH) and Medtronic (MDT) will enter into a new four-year agreement whereby Medtronic will no longer be the preferred provider of insulin pumps for United members and United will start covering Tandem Diabetes’ (TNDM) t:slim X2 pump on an in-network basis, Oppenheimer analyst Steven Lichtman tells investors in a research note. The news is a “nice incremental positive” for Tandem as the company has been essentially shut out of UnitedHealth for about four years, says the analyst. Lichtman believes the approval of Tandem’s Control-IQ and the publication of the data were drivers of the UnitedHealth’s move to add the device. He believes the news offers potential upside to estimates and keeps an Outperform rating on Tandem Diabetes. The stock in afternoon trading is up 7% to $94.33.