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Home » Report: Medicare proposal would broaden coverage for Boston Scientific’s Watchman

Report: Medicare proposal would broaden coverage for Boston Scientific’s Watchman

November 24, 2015 By Brad Perriello

Boston Scientific WatchmanThe Centers for Medicare & Medicaid Services are reportedly considering broadening the coverage for Boston Scientific‘s (NYSE:BSX) Watchman anti-stroke device, according to an unidentified official with the federal health insurer.

Leerink Partners analyst Danielle Antalffy, citing a Bloomberg report, wrote today that the CMS official “clarified that CMS is proposing to pay for Watchman for a subset of the patients who currently would be eligible for the device under the FDA-approved label,” or patients at high risk for stroke and bleeding and/or contraindicated to long-term warfarin use.

“While this report is unconfirmed by either CMS or the company, we’d note that this would fall in line with takeaways from our physician conversations that CMS ultimately would not restrict coverage to only those patients with an absolute contraindication to warfarin,” Antalffy wrote.

BSX shares took a hit earlier this month after CMS proposed to limit coverage for Watchman, a transcatheter implant designed to seal off the left atrial appendage to prevent the formation of blood clots that could cause stroke. The FDA approved Watchman in March.

The federal health insurer proposed to limit coverage for Watchman to patients in approved clinical trials who can’t take warfarin, an anti-coagulant drug. CMS also proposed a registry study with a 2nd arm of patients taking novel oral anticoagulants.

Barclays analyst Matt Taylor and Leerink Partners analyst Danielle Antalffy each said this week that it’s unlikely that CMS will go that route after a comment period ends Dec. 9 and the final decision issues as expected Feb. 8, 2016.

Taylor wrote that “it is more likely that the CMS final decision will cover Watchman more in-line with the spirit of the [investigational device exemption] trials than it is that CMS is asking for BSX to study a new population,” Taylor wrote, noting that a trial as described by CMS “would present some logistical challenges to enroll and also seems to be somewhat contrary to other language in the rule about patients that are contraindicated.”

Antalffy agreed, citing interviews with key opinion leaders in cardiology and electrophysiology. The calls “suggest that worst-case scenario is unlikely, with CMS likely to ease restrictions a bit to more in line with previously expected usage pre-proposal from both a physician and market perspective,” she wrote.

“Specifically, these physicians expect CMS to clarify a relative contraindication to warfarin vs. absolute and simplify the registry – both of which would drive a more moderate adoption ramp relative to our and Street thinking pre-proposal if left unchanged,” Antalffy wrote.

And even though some Medicare Administrative Contractors (notable the Midwest) deny coverage for Watchman, Taylor wrote, procedure volumes are in line with rates before the Nov. 11 CMS proposal.

“[W]e note in our physician meeting with two EPs in [Minneapolis Nov. 20], both doctors highlighted they are warehousing patients that would benefit from Watchman,” he wrote.

The potential market for the device could hit $500 million by 2019 and ramps to more than $1 billion if it wins a place as a 1st-line therapy – a reasonably possible outcome, according to Antalffy.

Before the CMS storm broke, Boston Scientific touted data from a real-world registry showing a 2.8% rate of serious adverse events at 7 days. The company reported that 92.7% of patients were free from serious adverse events at 1 month post procedure. A total of 61.8% of patients were deemed contraindicated for oral anticoagulants in the study, which is slated to follow patients for 2 years.

The pressure on BSX shares was augmented yesterday when the FDA issued a pair of Class II recalls for the Watchman device and a sheath dilator. The stock is off 4.5%, to $17.96 per share, since the CMS proposal.

Filed Under: Cardiac Implants, Cardiovascular, Wall Street Beat Tagged With: Boston Scientific, Centers for Medicare and Medicaid Services (CMS), Reimbursement

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