PolyNovo set to benefit from proposed US medicare changes
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The news: Tissue regeneration business PolyNovo has confirmed to the exchange that it is “well positioned to benefit from changes to the US outpatient reimbursement landscape”, which seeks to lower the cost of outpatient wound care.
The numbers: PolyNovo shares rallied 11.8% to $1.47 at 10:37am AEST.
Shares entered a trading halt on Monday pending this announcement, made in response to a report in The Australian.
The context: The US Centers of Medicare & Medicaid Services have proposed the introduction of a flat reimbursement for outpatient skin substitutes.
This would replace the existing reimbursement model which disincentivises lower priced products from being used because “physicians are paid a percentage of the price for each skin substitute used in outpatient wound care”.
PolyNovo flagged that its NovoSorb BTM and MTX products would be profitable under the proposed flat rate and the removal of price-based incentives could boost the competitiveness of its products compared to higher-cost competitors.
The company also flagged that growth potential as “physicians’ decision-making will increasingly focus on proven clinical outcomes, where PolyNovo products compete strongly”.
What they said: “The majority of PolyNovo’s current business has to date been inpatient product application,” acting CEO Robyn Elliot said.
“Outpatient product application, the focus of the CMS proposed changes, is a significant potential growth area for PolyNovo’s products. We are currently assessing the optimal commercial model for accessing this market opportunity.”
Chair David Williams said the company is “well positioned to benefit from changes to the US outpatient reimbursement landscape”.
The source: ASX
