And then I'm trying to get my head around how Omnipod 5 ramps next year? I show our next question comes from the line of David Lewis from Morgan Stanley. But at a high level, I'll say that it's something that I think we as a company are very proud of and that we were out front and able to offer this assistance to our users. They choose it over Omnipod when they do, because it has DexCom integration. Wayde will discuss our financial results and outlook for the rest of this year, and then we'll open the call to your questions. And you're right. Just wondering, thus far in 2020, have you seen any evidence of pump penetration increasing among that Type 2 patient population or do you believe the increase in your Type 2 mix is being more driven by share gains of new patients? Turning to fourth quarter 2020 guidance. Our long-term financial strategy and capital deployment plans remain unchanged. This has been eagerly awaited by those who use Omnipod, as an update to the handheld device has not happened in several years. Okay. That's really helpful color, guys. And that really sets us up for the 67% to 70% next year. So there a few open question, Dave, that we'll look to clarify when we get to our earnings -- pardon me, our guidance in our Q4 call. And on an absolute basis, OUS maybe down marginally 5% or 10% year-over-year, but not dramatically down. And what -- let's start with COVID because this is one of the ones that's harder to predict for us. Now turning to our revised outlook for 2020. Omnipod ranks number one within this demographic, and we are delighted to have kicked off our pivotal study to make Omnipod 5 available down to age two. Joanne K. Wuensch -- Citi Research -- Analyst. So I can start on the sequential growth that you mentioned, David. Thank you. We simply share the news when we're cleared. I think you mentioned COBRA, but there has been many other options for people including Medicaid in the states or alternative insurance in the household. Our highest -- our long-term growth will be supported by the manufacturing expertise required to produce the highest quality products, while increasing gross margins. 65% of new U.S. as to the pharmacies sort of long-term outlook remains clear. But we are in a unique position in terms of our channel and in terms of our form factor and Omnipod's discretion and ease-of-use to be able to win in that market. Approximately 80% of our new customers in the third quarter were multiple daily injection users attracted to Omnipod's ease-of-use and unique form factor. These measures aligned with what management uses as supplemental measures in assessing our operating performance and we believe that they are helpful to investors, analysts and other interested parties as a measure of our comparative operating performance from period to period. And I'll just highlight again. Channel inventory growth in the quarter of an estimated 4 million to 5 million was primarily driven by stocking shipments of Omnipod DASH and with similar to the amount of estimated increased distributor orders we experienced in Q3 2019. Our next question comes from the line of Jeff Johnson from Baird. And is that shift in automated manufacturing in the U.S. the key driver to the high end of your long-term gross margin target of 70% or are there other things going into that 70%? Expanded commercialization will continue on a market by market basis throughout 2020 and beyond. And so that -- it's really math and it's our new customer starts over a few quarters, they compound. Thanks. We are uniquely positioned to drive rapid growth by serving a large and underpenetrated market, and our strong cash position provides us with capital to further strengthen our foundation for long-term sustainable growth. Thank you. And over that time, we've brought advanced innovation to the diabetes community and helped people spend more time living their best life and less time managing their chronic condition. ET, Good afternoon, ladies and gentlemen, and welcome to the Insulet Corporation Third Quarter of 2020 Earnings Call. Are there any major conferences to present the pivotal data now that ATTD has been postponed or should we expect it in the label? What we know for sure is that MDI users are going to be very, very attracted to Omnipod 5. Thanks, Larry. Our automated insulin delivery platform is transformative technology with potential applications in a variety of segments. And just a reminder, Q4 in the prior year was our all-time highest new customer starts. Thanks, guys. We delivered 20% revenue growth ahead of our expectations and $9 million above our guidance range. The timing of launch of the Horizon AP on the slide shows late 2019, however, in the presentation late 2018 was also mentioned. So yeah, that one's still a jump off for us. Omnipod 5 Type 2 feasibility study. And so we want to get it right, and a limited market release is part of doing that. It's still a question for us, Jeff. And so I'm trying to just -- if you could walk us through any milestones or milepost we should think about? The Omnipod Horizon System is anticipated for commercial release in the second half of 2020 and will expand upon the current Omnipod DASH System platform. I would now like to turn the conference over to your host, Deborah Gordon, Vice President, Investor Relations. We are excited about the impact it will make in the market and on the lives of people with diabetes. And so this is really an enhancement to that program, and we haven't met the number of people that we had on our original program yet. I mean, that was a quarter where we had significantly lower new customer starts. Robert Marcus -- J.P. Morgan Securities -- Analyst. And so that's -- so far, we feel comfortable we'll be in the range that we've provided for Q4 for international. Maybe just starting with the pharmacy channel transitions, you noted greater than 30% of U.S. volume is going to the pharmacy, which is similar to last quarter. We didn't give the five markets, so we'll lay those out for you as we enter into them. When we check that box, we should get a much larger -- already today, we get a very large percent of MDI conversions. A unique feature of the device is that it uses custom-built glucose control, modifiable based on the time of day; it can also prevent the patient from experiencing a hypoglycemia episode. Strong results show potential for Horizon to improve clinical outcomes in pediatric and adolescent age groups with type 1 diabetes. And then we have a ton of work going on in medical affairs, etc. And really, our goal here is to come out of the other side of the pandemic with as much momentum as we can around our new product innovations, around our business model strategies with Type 2 and the pharmacy as well as the investments we've made in the sales force, in the commercial business including virtual training as well as, Shacey mentioned, the end-to-end customer process. And it sounds like, Jeff, you're close. Yeah. While positive foreign exchange was a 60 basis point tailwind, it was offset by a 60 basis point headwind from one-time COVID-related costs of $1.1 million. First-ever automated insulin delivery with the tubeless Omnipod Insulin Management System and personal smartphone control. I was hoping you could provide some detail on the mix of COGS running through the Acton plant versus sources from Flex in China? And as a result, we still got double-digit growth in our guide. Those are a little lower than we're experiencing from our estimates, and we do expect international to persist more into Q4. And that's the big one that we will annualize out of the business in Q1 next year and adding new customers starts from Q2 into Q3 and Q4. And virtual training is quick and effective. Expenses increased on a dollar basis, primarily due to the marketing costs as well as R&D and clinical spend for Omnipod 5. Not producing sellable product yet, but we do have them producing product. In just the markets we currently serve, there are approximately 10 million people living with insulin-dependent diabetes, who could benefit from improved quality of life and better outcomes with Omnipod. And maybe I'll let Wayde talk about the specific numbers in terms of the pharmacy channel. We are confident an Omnipod AID system will provide great value for the type 2 population, and we expect our early clinical work will result in important learnings. Thank you for that. I'll start with expanding access and awareness. It's a high stakes product for us. While COVID-19 has presented challenges, it also has pushed us to embrace virtual training, which is now preferred by users and providers. The high end of our guidance in Q4 would indicate that we're going to be at a record quarter in Q4. Turning to the third quarter financial results. Omnipod's form factor, our pay-as-you-go model in the pharmacy and our experience developing exceptionally simple products position us uniquely to grow pod use month Type 2 users. The Omnipod Horizon closed loop system , also developed in partnership with Dexcom, is being tested pre-release in the USA - it is not expected in Canada until late 2020. tidepool.org is working on getting the Loop app (see below) approved by the US FDA and using it … It will then map out for us how much clinical work do we have. In summary, the world remains challenged with the impact of the global pandemic. Lots of benefits, obviously, to pricing it at a premium, but there are just as many benefits and a very compelling one from a customer standpoint to get it into the hands of our current customers and new customers. So the question was around mix on COGS. Great. First of all, glad you brought guidance because we're very happy that we chose to issue guidance back in Q2 at the front end of this pandemic. Larry Biegelsen -- Wells Fargo -- Analyst. There is just incredible enthusiasm in the market and internally with all of us to get that product on to the market, and we're going to make that happen regardless of what's happening in the macro environment. That recovery is being driven, as it frankly always has been, off of Omnipod's form factor. Because remember, they can adopt Omnipod 5 without an upfront cost and without a four year lock-in period. Too early at this point to be able to give color on that. Plus, the latest in the pipeline, including concentrated insulin systems and the Horizon Automated Glucose Control SystemDuring its first-ever Investor Day, Insulet shared timing and new details on its key products in development. So every -- almost every individual function in the company is touching the Omnipod 5 launch in some way. Please go ahead. So we've always been strategically focused on the young pediatric population. I think those are great questions, and I think really highlight why we're so excited about Omnipod 5. I mean, one of the reasons why we wanted to do DTC this year before launching Omnipod 5 is that we really wanted to learn about the impact, learn about the messaging that's most effective, the channels that are most effective. We ended the third quarter with $897 million in cash and investments. It really just depends on how we want to approach the market. This creates a compounding impact on our revenue, which we began to see in the third quarter and we'll continue to see an impact into the fourth quarter and first half of 2021. So from a modeling standpoint, to your question, David, I would think about Omnipod 5 starting to ramp in the second half of the year. Obviously 4Q '19 was even stronger, but 3Q '19, it seems like your U.S. new patient starts almost at parity with last year. But at the end of the day, the anticipated headwinds to the extent we can, I mean, it's obviously very difficult to predict how much impact the pandemic will have, but we've built the assumption into the high end and low end of our guidance ranges. The Omnipod 5 Horizon System is a hybrid closed loop automated insulin delivery device. So those are the things that we're evaluating before we determine to what extent we increase our investment in DTC in 2021. Benefit checks are swift. Yeah. Our results were favorable in both the U.S. and international regions with the combined impact slightly less than 30%. Over time, we will be investing in clinical studies to first explore and then prove Omnipod 5's utility in more market segments. We've obviously seen a lot of resurgence of COVID globally. In terms of reimbursement, we're fortunate. And so that is the first step in terms of our clinical exploration for Type 2s on Omnipod 5. But that's why I wanted to just share and give perspective on all the momentum we have building inside the business because there is so much good things happening. Also contributing was favorable product line mix. We do have a lot of programs going. Thank you. And then you had also asked, Larry, about Omnipod 5 in international. And then internationally, a little higher again than the estimates you put out there. Please go ahead. I just wanted to follow-up just a little bit on the COVID environment. Just kind of curious how well prepared the doctors' offices and patients are now versus how they were earlier this year? So as the quarters go quarter-to-quarter, we're probably not going to see major step-ups just given that our overall business grows as well. And a lot of the cost is fixed on the automated manufacturing lines. Meanwhile, Omnipod is also hoping to integrate its system with a third-party looping algorithm, Tidepool Loop. This is very much about ensuring that while COVID is negatively impacting in an outsized fashion our partners that they can remain on product. And so there's just so many good things that this compounding new customer starts is offsetting for us. What was once a clunky pager looking device now resembles a sleek smartphone. Please go ahead. Got it. And so in speaking with our field teams there, they do anticipate it's going to be more challenging. 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