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Dexcom’s G7 Crisis: How a Life-Saving Device Became a Liability
Dexcom (NASDAQ: DXCM) was once the darling of diabetes care — the Silicon Valley-style innovator that turned finger-prick blood sugar checks into a relic of the past. Its flagship G6 and now G7 continuous glucose monitors (CGMs) revolutionized life for millions of diabetics, allowing real-time monitoring and automated insulin delivery.
But according to a blockbuster investigation from Hunterbrook Media, the company’s latest G7 device may be its biggest crisis yet.
The Alarming Findings
Hunterbrook’s reporting paints a picture far darker than Wall Street has priced in:
- Unauthorized Design Change: Dexcom quietly switched a critical G7 sensor coating in December 2023. Its internal data showed the new material was inferior on every accuracy metric — but it sold the device anyway without FDA clearance.
- FDA Warning & Adulterated Product: In March 2025, the FDA sent Dexcom a warning letter declaring the G7 “adulterated.” Inspectors said Dexcom’s risk analysis was “inadequate and incomplete” for devices that directly control insulin dosing.
- Real-World Harm: At least 60 people claim hospitalization, and multiple deaths have been linked to G7 failures. Facebook support groups for G7 issues have ballooned to over 58,000 members in just a year.
- Executive Exodus: CEO Kevin Sayer, the VP of global operations, chief commercial officer, and head of engineering have all left within a year. No insiders have bought shares since 2020.
- Accounting Red Flags: Dexcom appears to be pulling forward revenue, inflating work-in-process inventory, and booking sales far ahead of cash collection. Days sales outstanding are above 100 — flashing warning signs for investors.
This is more than a product recall — it’s a credibility crisis that threatens Dexcom’s market share, financials, and relationship with doctors and patients.
How Dexcom Lost Its Edge
Dexcom’s story is one of a great innovator under pressure. Abbott’s FreeStyle Libre 3 was cleared months before the G7, threatening Dexcom’s dominance. To defend share and keep up with Wall Street’s growth expectations, Dexcom appears to have rushed the G7 to market, prioritized margins, and cut corners on safety.
“Dexcom definitely dropped the ball — the arrogance of Dexcom is really what needed to be reset.”
— Edward Carr, former senior director of manufacturing at Dexcom
Former employees told Hunterbrook that manufacturing decisions were made with poor technical oversight, and that leadership valued speed over rigorous validation. The result: a flagship product that performs worse than its predecessor and worse than competitors, by Dexcom’s own testing.
The Human Cost
The most damning part of this story isn’t the accounting red flags — it’s the patients.
- Billy Sosbe, 53, died in June with a G7 still attached to his arm. His device had shown “severe signal loss” for weeks prior.
- Bob Hawkinson passed out behind the wheel when his G7 failed to warn of a hypoglycemic crash.
- A six-year-old girl was rushed to the ER after her G7 misread her blood sugar by hundreds of points.
Endocrinologists interviewed by Hunterbrook report stopping new prescriptions for the G7 entirely. Some describe Dexcom’s response to concerns as “gaslighting,” with reps claiming no knowledge of accuracy problems even as complaints mount.
FDA Data: Accuracy Complaints Are Soaring
Hunterbrook’s analysis of FDA adverse event reports shows that Dexcom devices generate 22% more accuracy complaints than expected based on market share, while Abbott logs 68% fewer.
Complaints about the G7 specifically more than doubled after the December 2023 material change. Many report sensors failing days early, readings off by hundreds of points, or dangerous false highs that trigger insulin overdosing.
And despite its multimillion-dollar Super Bowl ad claiming the G7 is the “most accurate CGM,” Dexcom has since removed that commercial from YouTube.
Financial Smoke Signals
Dexcom barely beat earnings last quarter — and Hunterbrook’s forensic accounting team suggests it did so with aggressive tactics:
- Days Sales Outstanding: Surged past 100 days, well above normal ranges — suggesting revenue recognition games or channel stuffing.
- Inventory Composition: Work-in-process inventory has doubled, creating opportunities to hide rising costs.
- Margins Falling: Gross margins have dropped for 15 straight quarters, hitting 59.5%. Analysts still model >60%, setting up risk of future misses.
The last time Dexcom’s accounting was called into question, its stock fell 40% after earnings.
Competitive and Regulatory Threats
This crisis comes as Abbott prepares a next-generation Libre with ketone monitoring, GLP-1 drugs potentially slow diabetes incidence, and proposed Medicare changes threaten to cut CGM reimbursement rates.
Even if Dexcom fixes the G7’s issues, its moat is under attack. Abbott has already claimed it will “100%” take market share — and doctors are starting to agree.
The Big Question: Can Dexcom Rebuild Trust?
For a company that helped revolutionize diabetes care, this is an existential moment. Patients and doctors are switching back to the G6 or to Abbott’s Libre 3. Investors are questioning management’s credibility. And regulators are circling.
Rebuilding trust will require:
- Full transparency about the G7’s problems and fixes
- Stronger oversight of manufacturing and design validation
- Less focus on margins, more on patient safety
Anything less risks cementing the narrative that Dexcom is no longer the gold standard in CGMs — just another medtech company cutting corners to meet Wall Street’s demands.
Bottom Line
Dexcom’s G7 was supposed to be its crown jewel. Instead, it has become a cautionary tale about what happens when innovation collides with growth-at-all-costs culture.
For diabetics, the stakes aren’t just financial — they are life and death. For investors, the question is simple: if Dexcom can’t restore trust in the G7, will it ever earn back its premium valuation?
DISCLAIMER: This analysis of the aforementioned stock security is in no way to be construed, understood, or seen as formal, professional, or any other form of investment advice. We are simply expressing our opinions regarding a publicly traded entity.
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