by Rick Mendosa
So you developed the A.R.M. as a hobby without any support? That would be too harsh. Because I had a good financial backing. If I hadn’t had the development budget that I had we would not have been able to put together the Reflectance Meter and other products. So there was at the corporate level considerable support, no question about it, but it was an uphill battle for the first several products to get timely approval to go ahead.
Did you ever imagine that blood glucose meters would be so big as they are now? No, not in the dimension that it turned out. However, it was clear to me right from the beginning that this is a niche that will blossom. But I didn’t worry about the magnitude at the time.
What was your title there? I was director of instruments in the R&D department and at that time associate director of reagent development.
Someone told me that, “Even Ames was reluctant to promote a self-test for glucose, because they had an attractive reagent franchise in laboratory testing.” Is that correct? No. They had an attractive franchise, however their franchise was in the urine testing. Ernie Adams, after he had developed the Dextrostix, Dextrostix sales never took off, because in order to get the value of a blood test it has to be quantitative… The Dextrostix had the potential of being quantitative, but the way it was read did not allow it to be read quantitatively.
This actually was how I got into it. That was one of the reasons I got into it. The Dextrostix had to be read against a color block, a chart that was printed on the label on the bottom. Depending on the light intensity, daylight, incandescent light, fluorescent light, the same color block could look totally different. So therefore it was at the very best semi-quantitative. But if you wanted to control blood sugar ideally close to the normal level, it doesn’t do you any good if you have a +/-50% readout.
Another problem was in manufacturing. Because in order to produce those Dextrostix reproducibly they had to be tested. And in order to test them they had a group of women who were using batches of Dextrostix and then had light boxes and then did visual readouts against a color block and so one of the first things that became apparent then was that there was no standardization in the color intensity and the characteristics of the light source. And then even thereafter the precision was too poor to make it a good product and then since I was the new kid on the block within the Miles technical community, the manufacturing at that time, and also quality control, was done by the so-called Operating Services Division, which had nothing to do with Ames. The Operating Services Division was in charge of all manufacturing within the Miles organization and one of those section managers of the Dextrostix quality control came and asked me for help how they automate the readout of those Dextrostix. They were using a tristimulous colorometer.
The problem that they had was that the light intensity was so high that the light intensity was driving the reaction and not just the chemistry, because if you have an enzyme test, which the Dextrostix is, if you heat up the process the reaction goes much faster. So they couldn’t operate the shutter fast enough to reduce the impact of the light intensity. Then I realized that to have a chance to get a device that would read out the Dextrostix, we would have to reduce the light intensity. And then I found out that the light intensity of a flashlight was plenty to do it.
This led to the idea of making a battery-operated device. I had made the first breadboard, a working model of the Ames Reflectance Meter on my desk. That was, and I remember when, because I know where the first desks were standing, without even a lab, and that was operated by some batteries and a flashlight lamp. Actually it fit into a shoebox. It wasn’t a prototype, which requires industrial design. This was a feasibility model. That must have been 1966.
There are two kinds of reflectance….
Charlie says the original A.R.M. was very expensive, around $495. Yes, but that was unfair. That was one of the big issues. Miles had taken people who were producing for other areas and the overhead was just killing everybody. Since that was also used as a negative, “we can’t sell it; it is much too expensive,” but instead of doing some mea culpa, finding out why it was so expensive, they could have gone outside to get the cost down. We were negotiating with Zenith in Chicago at the time and the industrial designer they had at the time, had connections at Zenith. He was part of my department; I hired him out of Chicago; he had connections to Zenith. They came up with a quote, if I recall correctly, it was $80 for the complete unit, but that was obviously rejected out of hand…. It was expensive because it was not manufactured under normal manufacturing conditions.
Charlie says that it was never originally intended for home use. But you had that in mind… We on the development side were proposing it to be marketed for home use. The marketing people took the attitude that they did not want to have the responsibility for a layman to perform a medical test. And for strategic reasons they wanted to engage the medical profession in the mission selling, and that was probably a good move. They did not want to have their customers, that it the physicians take opposition to Ames trying to circumvent them.
Charlie says that it was heavy and bulky… That is not true. Heavy and bulky was the Eyetone. The Eyetone was probably 3 or 4 times heavier than the original. I still have one.
You still have an Eyetone? No I still have a Reflectance Meter.
Do you have a photograph of it? Yes, I’ll dig through my files and get some stuff ready for you.
Did you know something personally about diabetes? No, not at the time. The true born engineer has the ability to think in totally abstract terms, very analytical….
The clinical research performed with the Biostator system provided, amongst others, the rationale and the data to perform glucose measurements at fasting, pre-prandially and post prandially (before and one hour after each meal). Therefore, the Biostator system, in a very significant way, contributed to the merits and value of home glucose
But you developed the first blood glucose meter! I can promote both, because I was doing both of them.
Telephone Interview With Dr. Michael Miller
September 16, 1999
Dr. Miller begins: Let me give you a brief summary of the way it went. I met Mr. Doan at a cocktail party here in Midland. That’s where the first conversations came about. He is the former president of the Dow Chemical Company and subsequently chairman of the board of Dow Chemical but he had retired an formed a venture capital company. My wife was involved in some activities at the local center for the arts, the local cultural center, and we were attending a cocktail party for a ballet, where Ronald Reagan’s son was part of the ballet at that time. It was about 1980 or 1981.
We started talking about some medical things and they were interested in measuring ionized calcium. They had a company that had an instrument that would measure ionized calcium. So I answered some questions for them about that and gave them my opinions and then I told them that I had been reading about another venture that I think you might be interested in that I think has tremendous potential. And that is self-glucose monitoring for the reasons we all know it is of value. Actually, I can’t claim it as my idea in any way because I had read about it in Diabetes Care, I think, which had just started and they had had an issue about the Crock [spelling?] Symposium, where they discussed this issue and they talked about how it was being used in Europe. And where there was a little monitor called the Gluco-Chek [spelling?] and it was apparently built above a habberdashery store somewhere in London and sold on an unofficial basis not in large volumes and there was talk about how the meter might somehow end up in the United States and they were entirely unclear how it might show up in the United States. And there was some talk at that time about the Accu-Chek, not the Accu-Chek. Chemstrip bG. There might have been some talk about that already.
Anyway I told them that I thought this was an idea that might have tremendous value because of the problems of controlling diabetes, because of the problems of measuring glucose in the urine and I caught his ear. He then had another gentleman, a businessman. He and I and some of the people in this venture capital company we got together and we talked about this idea. The other gentleman was Ian Bund, he is an Australian, he still runs a venture capital company in Ann Arbor, Michigan, and you might want to talk to him about this whole thing as well.
The three of us, Mr. Bund, Mr. Doan and I got together. They already had the venture capital company and they worked with another gentleman, out in California, actually he is in one of the suburbs around Mountain View, where LifesScan, was actually set up, Mr. James Weersing, he is a very well know venture capitalist out there, not for computers but for other things. So first we had meetings here, then we got together in Chicago, they bought in Weersing and one or two other venture capitalists and we talked it over. And eventually they hired a young M.B.A. out of the University of Michigan, and he developed a business plan and that eventuated with the incorporation of a company here in Midland, Michigan. It was originally called Diabatech [he’s not sure]. We began first with plans to import this meter from England, called the GlucoChek [spelling?] and then began plans to develop our own meter and our own strips.
But it soon became obvious to people who were really well, who had good knowledge of the Silicon Valley and the development of electrical instruments, primarily Mr. Weersing, who ended up being one of the major business movers of the venture. He was eventually chairman of the board of LifeScan during its early phases. They all felt that the company needed to move to California, so it moved to Mountain View, California, where during they early years, until 1986 and somewhat thereafter, after the acquisition by Johnson & Johnson, LifeScan was in Mountain View.
Then it all evolved from their. People were hired. The company expanded. I was on the board of directors as well Mr. Bund. Mr. Doan made some occasional appearances at the board of directors meetings. Mr. Weersing was the chairman of the board and he became the prime mover. He made trips to England, to Japan, he integrated with the first development of one of the strips we had, with the early meters from the Japanese, we imported the strips from Japan, but eventually they were developed and manufactured at the Mountain View site, we integrated with some of the Silicon Valley companies, like Solectron and other companies regarding the things we needed to develop the blood glucose meter.
We gave the GlucoCheck that name. It was called something else in England.
The very first meter that we developed was a black one. It was called the GlucoScan [he can’t remember spelling or when].
You had the original idea for LifeScan? I had the original idea. I participated as a consultant and as a member of the board throughout the development of the company until its sale to Johnson & Johnson in 1986.
So you had a major ownership share in the company? I had a minor ownership.
I would have thought that you made more money from that than your whole medical practice. It did amount to that, but it was still a minor share of the company. At the sale to Johnson & Johnson I owned a little less than 2% of the company.
How much money was that? I don’t know if I want that published. It sold for $100 million to Johnson & Johnson.
I am now 56 going on 57 so I was in my late 30s and early 40s when all this was happening.
You had no idea of retiring with that money? It hasn’t proved to be enough to do that. So I have had to work and generate other retirement funds and I still want to be an active person, and I am still working harder than you would imagine….I have an active practice called Diabetes and Endocrinology with another associate here in mid-Michigan….I am in group practice here at the hospital, the Mid-Michigan Medical Center. I was in private practice until 3 years ago.