The Centers for Medicare & Medicaid Services issued new proposed rules for left ventricular assist devices, the heart pump implants designed to help patients with end-stage heart disease either make the bridge to transplant or to assist their hearts until the end of life – so-called “destination therapy.”
The new Medicare rules change how potential LVAD patients must be registered, requiring bridge-to-transplant patients to be registered as potential heart transplant recipients with their own hospitals, as before, but also requires them to be placed on the national organ transplant list.
The new proposed rules would also tighten the restrictions on so-called "bridge-to-decision" patients who use the pumps until a decision is made regarding a heart transplant. They also eliminate restrictions on the amount of time BTT patients can spend on the devices while they await a heart transplant.
The news had opposing effects today on the stock of the 2 largest rival LVAD makers, Thoratec (NSDQ:THOR) and HeartWare International (NSDQ:HTWR). THOR shares were up slightly to $36.00 apiece as of about 12:15 today, for a 0.4% gain; HTWR shares were down 1.7% to $94.10 apiece.
That’s because HeartWare isn’t expected to win a destination therapy indication from the FDA until 2015 (its HVAD device won FDA approval as a BTT device in November 2012). With more and more hospitals taking their cues from Medicare, that means incrementally fewer will opt to allow the HeartWare device as a BTD device, according to Leerink Swann analyst Danielle Antalffy.
"CMS does seem to be making a move to further restrict BTD use by adding the requirement that a patient not only be listed at the hospital but also be active on an organ transplant list. The nuance here is that while most BTT patients are private pay vs. Medicare, if centers increasingly follow Medicare criteria even for private pay patients – a trend that HTWR has publicly stated is already occurring "more than expected" – it could limit HTWR to strictly BTT only until potential DT approval in 2015 or later," Antalffy wrote in a note to investors this morning.
A final Medicare ruling on the new proposals is due by October 30.