Will JAMA heart stent article start another Wall Street stampede?


A footnote in a study published in the Journal of the American Medical Assn. about percutaneous coronary interventions may have a ripple effect on Wall Street.

The study gathered data on more than 500,000 PCIs conducted at more than 1,000 U.S. hospitals between July 2009 and September 2010. The researchers determined the appropriateness of each procedure based on the 2009 coronary revascularization appropriate use criteria, a whitesheet generated and endorsed by medical professional societies in 2009 amid growing debate over proper use of PCIs.

While the study found that nearly 85 percent of all procedures were necessary and appropriate and only about 4 percent could be definitely determined inappropriate, that 4 percent figure could echo among the canyons of Wall Street. A similar JAMA article published in January, on the rate of appropriate cardiac rhythm management device implantations, is partially credited for driving a slump in procedure volumes for CRM devices.

The new study on PCIs considered 500,154 procedures, dividing them into acute indications and elective procedures. Among the acute category, which made up nearly 73 percent of the whole, nearly all cases fell within the guidelines. About 1 percent were designated inappropriate and less than half a percent were considered uncertain.

Within the elective category, about half were labeled appropriate, less than 12 percent were considered inappropriate and 38 percent were uncertain.

Across the entire study, less than 5 percent of stent and angioplasty balloon procedures were found to be inappropriate. The 11.2 percent that couldn’t be pegged as within or without the guidelines, however, could send a ripple effect along The Street among med-tech investors.

Witness a Bloomberg report out today: "Heart Procedure to Clear Arteries May Be Misused 12% of Time, Study Finds." Contrast that with the original JAMA news release for the study: "Most PCIs (such as balloon angioplasty) performed in US for acute indications appear warranted."

A CRM study published in January showed that more than one in five implantable cardioverter-defibrillators were placed outside the medical guidelines. That study and a U.S. Justice Dept. probe raised fears of federal prosecution among cardiologists; the pair also fueled sales slowdowns for large cardiac device makers such as Boston Scientific Corp. (NYSE:BSX) and St. Jude Medical Inc. (NYSE:STJ).

In April, St. Jude’s optimistic CEO Daniel Starks insisted that the JAMA study on CRM device usage had little effect on his company’s CRM sales. By early May, Boston Scientific’s cardiac rhythm management unit reported a significant slowdown for the first quarter, with outgoing CEO Ray Elliott conceding that the study and the DOJ probe may have been contributing factors. The slump shouldn’t last long, Elliott maintained, but still the company took a $697 million write-down during the first quarter to account for it.

By the end of May, Medtronic Inc.’s (NYSE:MDT) sluggish CRM sales made the CRM downturn all but official. MDT’s CRM sales dropped 5 percent during the 12 months ended April 29, to $5.01 billion. The drop was primarily attributed to a 6 percent dive for sales of MDT’s defibrillation systems, which went from $3.16 billion in 2010 to $2.96 billion in 2011.

Could something similar be in store for PCI sales?

If headlines are any indication, the panic may be imminent: "Study Finds Too Many Elective Stent Procedures," Medpage Today reported. "Angioplasty unnecessary in some cases, study finds," wrote CNN.

Shares of Boston Scientific, St. Jude and Medtronic stock were all down by the end of the day today. Boston Scientific closed at $7.14, down 1.24 percent on the day; St. Jude was down 1.73 percent to $47.74 and Medtronic dropped 2.97 percent to $37.96.

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