Shares of Edwards Lifesciences (NYSE:EW) lost nearly 7 percent today, after a Centers for Medicare & Medicaid decision to review its coverage policy for a type of replacement heart valve.
CMS said it plans to go over "evidence pertaining to the health outcomes attributable to the use of [transcatheter aortic valve replacement], including evidence on the experience and qualifications of physicians and facilities that affect these outcomes."
"Within the US, TAVR has historically been performed only by physician investigators in centers of excellence within clinical trials, not by other practitioners or in facilities with limited experience with TAVR," according to the agency. "This limited experience in the US raises the question of generalizability of the existing evidence base to more ‘real world’ settings."
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Edwards and Medtronic (NYSE:MDT) have the only TAVR devices on the market. Both Edwards’ Sapien and Medtronic’s CoreValve are sold in Europe; Edwards is expecting to get the green light from the FDA for the U.S. market this fall. The federal health insurance agency said it’s aware of a study of the Sapien device showing relatively high rates of stroke and death (6.7 percent and 5 percent, respectively, at 30 days and 10.6 percent and 30.7 percent, respectively, after a year).
"CMS is also concerned that these adverse events may be more frequent when TAVR is furnished in settings where the physician and or the facility have limited experience or procedure volume to establish and maintain adequate expertise," the agency said.
Edwards is about two years ahead of Medtronic in the race to the U.S. market. In July, an FDA advisory panel recommended that the federal watchdog agency approve the Sapien device after reviewing Edwards’ pre-market approval application.
Edwards has set its sights on an October release, sinking about $40 million into a launch that chairman & CEO Michael Mussallem said will allow the company to compete in 200 to 400 medical centers in the U.S. Wall Street’s reaction to the CMS review prompted the firm to release a statement expressing its confidence that the agency will approve coverage of the device.
“The company believes a well-written National Coverage Determination that ensures adequate patient access to this important and rapidly evolving therapy would be a positive for patients and physicians," according to the release. "The NCD draft is just entering the public comment period, and we expect it to evolve as the societies, regulators and other stakeholders provide their input on the important details."
EW shares, which ended yesterday at $75.87, closed down 6.6 percent at $70.88 today.