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Medtronic (MDT) to Gain From New Reimbursement Program for CGM
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Medtronic plc’s (MDT - Free Report) subsidiary, Medtronic Canada ULC, recently welcomed the Ontario government's introduction of a comprehensive reimbursement program for continuous glucose monitoring (CGM) for eligible residents with type 1 diabetes (T1D). This latest announcement will enhance access to innovative diabetes management technology in Ontario, allowing T1D patients better manage this extremely challenging chronic disease.
The new public coverage program in Ontario will enable eligible individuals with T1D to get reimbursement for the integrated CGM, which is part of the Medtronic MiniMed 770G insulin pump system. This is the only system currently approved by Health Canada to offer adaptive insulin delivery to patients as young as two years. In addition, patients can access the Medtronic Guardian Connect stand-alone CGM system, which provides predictive alerts for up to 60 minutes regarding low or high glucose levels.
The new comprehensive reimbursement program for CGM by the Ontario government is likely to bolster Medtronic Canada’s Diabetes business.
Benefits of the Reimbursement Program
Per company-provided data, more than 300,000 people in Ontario live with T1D. Their yearly out-of-pocket expenses for supplies, prescribed medication, and devices range from $1,000 to $5,000, averaging 3% of their annual income (without private insurance). Many patients do not adhere to their diabetes management plan due to the high costs, putting them at risk of developing severe, life-threatening conditions.
Image Source: Zacks Investment Research
Management at Medtronic believes the new reimbursement program for CGM will allow patients to choose the glucose measuring device that best suits their clinical and lifestyle requirements, paving the way for better-automated technologies in the future. Accordingly, this new reimbursement program is expected to broaden Medtronic’s CGM user base in Canada, driving the company’s Diabetes business revenues.
Industry Prospects
Per a report published in Grand View Research, the global continuous glucose monitoring device market is expected to see a CAGR of 10.1% during 2021-2028. Factors fuelling market growth include the rising incidence of diabetes, a surge in the geriatric population susceptible to diabetes, growing awareness about diabetes preventive care, product launches and supportive government initiatives.
Given the substantial market prospects, the new public coverage program for CGM in Ontario seems well-timed.
Other Notable Developments
Medtronic engaged in a number of significant developments in January 2022.
The company announced that the first clinical procedure in Europe with the Hugo robotic-assisted surgery (RAS) system has been performed at the OLV Hospital in Aalst, Belgium. The Hugo RAS system is a modular, multi-quadrant platform developed for a broad range of soft-tissue procedures. Medtronic's solution to historical cost and utilization obstacles kept surgical robotics out of reach for many hospitals.
The company’s Micra AV Transcatheter Pacing System (TPS) was approved for sale and reimbursement by Japan's Ministry of Health, Labor and Welfare. The Micra AV is used to treat patients with an atrioventricular block. It delivers the benefits of leadless pacing to a greater number of patients.
Share Price Performance
The stock has outperformed its industry over the year. It has declined 7.2% compared with the industry’s 12.7% fall.
Zacks Rank and Key Picks
Currently, Medtronic carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader medical space are Henry Schein, Inc. (HSIC - Free Report) , Owens & Minor, Inc. (OMI - Free Report) and AmerisourceBergen Corporation .
Henry Schein has an estimated long-term growth rate of 11.8%. Henry Schein’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.5%. It carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Henry Schein has outperformed the industry over the past year. HSIC has gained 34.2% compared with the industry’s 12.2% rise over the past year.
Owens & Minor has a long-term earnings growth rate of 23.6%. Owens & Minor’s earnings surpassed estimates in the trailing four quarters, delivering a surprise of 29.5%, on average. It carries a Zacks Rank #2 (Buy).
Owens & Minor has outperformed the industry over the past year. OMI has gained 27.7% against an 12.7% industry decline in the said period.
AmerisourceBergen has a long-term earnings growth rate of 8.2%. In the trailing four quarters, AmerisourceBergen’s earnings surpassed estimates in three and missed in one, delivering an average surprise of 2.3%. The stock currently sports a Zacks Rank #2.
AmerisourceBergen has outperformed its industry in the past year, gaining 37% versus the industry’s 12.2% rise.
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Medtronic (MDT) to Gain From New Reimbursement Program for CGM
Medtronic plc’s (MDT - Free Report) subsidiary, Medtronic Canada ULC, recently welcomed the Ontario government's introduction of a comprehensive reimbursement program for continuous glucose monitoring (CGM) for eligible residents with type 1 diabetes (T1D). This latest announcement will enhance access to innovative diabetes management technology in Ontario, allowing T1D patients better manage this extremely challenging chronic disease.
The new public coverage program in Ontario will enable eligible individuals with T1D to get reimbursement for the integrated CGM, which is part of the Medtronic MiniMed 770G insulin pump system. This is the only system currently approved by Health Canada to offer adaptive insulin delivery to patients as young as two years. In addition, patients can access the Medtronic Guardian Connect stand-alone CGM system, which provides predictive alerts for up to 60 minutes regarding low or high glucose levels.
The new comprehensive reimbursement program for CGM by the Ontario government is likely to bolster Medtronic Canada’s Diabetes business.
Benefits of the Reimbursement Program
Per company-provided data, more than 300,000 people in Ontario live with T1D. Their yearly out-of-pocket expenses for supplies, prescribed medication, and devices range from $1,000 to $5,000, averaging 3% of their annual income (without private insurance). Many patients do not adhere to their diabetes management plan due to the high costs, putting them at risk of developing severe, life-threatening conditions.
Image Source: Zacks Investment Research
Management at Medtronic believes the new reimbursement program for CGM will allow patients to choose the glucose measuring device that best suits their clinical and lifestyle requirements, paving the way for better-automated technologies in the future. Accordingly, this new reimbursement program is expected to broaden Medtronic’s CGM user base in Canada, driving the company’s Diabetes business revenues.
Industry Prospects
Per a report published in Grand View Research, the global continuous glucose monitoring device market is expected to see a CAGR of 10.1% during 2021-2028. Factors fuelling market growth include the rising incidence of diabetes, a surge in the geriatric population susceptible to diabetes, growing awareness about diabetes preventive care, product launches and supportive government initiatives.
Given the substantial market prospects, the new public coverage program for CGM in Ontario seems well-timed.
Other Notable Developments
Medtronic engaged in a number of significant developments in January 2022.
The company announced that the first clinical procedure in Europe with the Hugo robotic-assisted surgery (RAS) system has been performed at the OLV Hospital in Aalst, Belgium. The Hugo RAS system is a modular, multi-quadrant platform developed for a broad range of soft-tissue procedures. Medtronic's solution to historical cost and utilization obstacles kept surgical robotics out of reach for many hospitals.
The company’s Micra AV Transcatheter Pacing System (TPS) was approved for sale and reimbursement by Japan's Ministry of Health, Labor and Welfare. The Micra AV is used to treat patients with an atrioventricular block. It delivers the benefits of leadless pacing to a greater number of patients.
Share Price Performance
The stock has outperformed its industry over the year. It has declined 7.2% compared with the industry’s 12.7% fall.
Zacks Rank and Key Picks
Currently, Medtronic carries a Zacks Rank #3 (Hold).
A few better-ranked stocks in the broader medical space are Henry Schein, Inc. (HSIC - Free Report) , Owens & Minor, Inc. (OMI - Free Report) and AmerisourceBergen Corporation .
Henry Schein has an estimated long-term growth rate of 11.8%. Henry Schein’s earnings surpassed estimates in the trailing four quarters, the average surprise being 25.5%. It carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Henry Schein has outperformed the industry over the past year. HSIC has gained 34.2% compared with the industry’s 12.2% rise over the past year.
Owens & Minor has a long-term earnings growth rate of 23.6%. Owens & Minor’s earnings surpassed estimates in the trailing four quarters, delivering a surprise of 29.5%, on average. It carries a Zacks Rank #2 (Buy).
Owens & Minor has outperformed the industry over the past year. OMI has gained 27.7% against an 12.7% industry decline in the said period.
AmerisourceBergen has a long-term earnings growth rate of 8.2%. In the trailing four quarters, AmerisourceBergen’s earnings surpassed estimates in three and missed in one, delivering an average surprise of 2.3%. The stock currently sports a Zacks Rank #2.
AmerisourceBergen has outperformed its industry in the past year, gaining 37% versus the industry’s 12.2% rise.