Boston Scientific Corporation (BSX - Free Report) recently announced the receipt of a New Technology Add-on Payment (NTAP) for its Eluvia Drug-Eluting Vascular Stent System from the U.S. Centers for Medicare and Medicaid Services (“CMS”). Notably, the NTAP designation is part of the 2021 Inpatient Prospective Payment System (IPPS) and will be effective on Oct 1, 2020.
For investors’ note, the NTAP designation is awarded to those new medical devices, which have been determined to significantly improve the diagnosis or treatment of the Medicare beneficiaries. The cost of the device also plays a role in obtaining the designation.
With the latest reimbursement, Boston Scientific aims to strengthen its Peripheral Interventions business, which is a part of its broader Cardiovascular arm.
Few Words About Eluvia
The Eluvia Drug-Eluting Vascular Stent System was approved by the FDA in 2018 based on the positive outcomes of the IMPERIAL trial.
The Eluvia stent system was developed for the treatment of peripheral artery disease (PAD), which is the narrowing of the arteries of the legs due to plaque build-up. The condition affects approximately 8.5 million people in the United States and millions more globally.
The Eluvia stent reopens the blocked artery and restores blood flow. It also prevents tissue regrowth within the stented artery via a drug-polymer combination, which releases a sustained low-dose drug.
Significance of the Additional Reimbursement
Per management, the receipt of the additional reimbursement is significant for patients suffering from PAD as the Eluvia stent system has been established to provide better treatment. Management also noted that, given the level of consideration and evaluation related to the role of paclitaxel in the peripheral vasculature, the NTAP reflects the uniqueness of Eluvia.
The NTAP for the Eluvia Drug-Eluting Vascular Stent System, once effective, will provide eligible hospitals with incremental reimbursement for the stent system for up to three years. The designation will allow access to the Eluvia stent for Medicare beneficiaries in the hospital inpatient setting. This will enable the eligible hospitals to receive NTAP in addition to the standard Medicare Severity Diagnosis Related Group payment.
Per a report by Fortune Business Insights, the global drug eluting stent (DES) market was valued at $5.71 billion in 2018 and is projected to reach $9.58 billion by 2026 at a CAGR of 6.6%. Factors like the growing prevalence of cardiovascular diseases and PAD cases and rising healthcare costs are likely to drive the market for DES.
Given the market potential, the additional NTAP reimbursement is expected to significantly boost Boston Scientific’s business.
Recent Developments in the Cardiovascular Arm
Of late, Boston Scientific has been witnessing a slew of developments in its Cardiovascular business.
The company, in July, received the FDA’s clearance for its WATCHMAN FLX Left Atrial Appendage Closure (LAAC) Device.
The same month, during the second-quarter earnings call, Boston Scientific announced the receipt of approval for multiple product launches across its major markets, including SYNERGY XD and a 48-millimeter version of the device along with two enhancements to its ROTABLATOR atherectomy platform and enhancements in percutaneous coronary interventions guidance.
In May, the company announced late-breaking positive results from the PINNACLE FLX clinical trial, which evaluated the safety and efficacy of the next-generation WATCHMAN FLX LAAC Device for patients with non-valvular atrial fibrillation.
Shares of the company have lost 2.6% in the past year compared with the industry’s 3.4% decline and against the S&P 500’s 11.8% growth.
Zacks Rank & Key Picks
Currently, Boston Scientific carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are QIAGEN N.V. (QGEN - Free Report) , Thermo Fisher Scientific Inc. (TMO - Free Report) and Hologic, Inc. (HOLX - Free Report) .
QIAGEN’s long-term earnings growth rate is estimated at 22.3%. It currently flaunts a Zacks Rank #1. (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Thermo Fisher’s long-term earnings growth rate is estimated at 15%. It currently carries a Zacks Rank #2 (Buy).
Hologic’s long-term earnings growth rate is estimated at 15.5%. The company presently sports a Zacks Rank #1.
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