The Centers for Medicare & Medicaid Services today published a final local coverage determination (LCD) expanding coverage for CGMs.
New, expanded coverage of continuous glucose monitors (CGMs) under Medicare go into effect in April.
CMS first published the LCD modifying coverage criteria for CGMs in October. The modification includes people with diabetes who receive insulin treatment or have a history of problematic hypoglycemia. The proposal eliminates the requirement for frequent adjustments of the patient’s insulin treatment regimen. This falls on the basis of glucose measurement testing.
The finalized version changed some language on the criteria. It amended the line saying “the beneficiary is insulin-treated with at least one daily administration of insulin” to, simply, “the beneficiary is insulin-treated.” According to BTIG analyst Marie Thibault, the decision increases access for approximately 1.5 million people using basal-only treatment in the U.S. covered by Medicare. That could expand to between 3 million and 4 million, she said, as U.S. commercial payors follow suit.
“In our view, this is a significant catalyst that will increase CGM adoption in this patient population, benefiting both Abbott and [Dexcom],” Thibault wrote.
Abbott and Dexcom both develop market-leading CGMs. The Dexcom G7 launched in the U.S. last month and recently received positive Medicare news. The FDA cleared Abbott’s next-generation FreeStyle Libre 3 last year. Chair and CEO Robert Ford said on the company’s most recent earnings call that the company expects growth for the platform this year.
Positive news for CGM makers
Since the LCD first published last autumn, leaders at CGM-developing companies haven’t been shy about voicing excitement over the news. The final LCD comes earlier than expected, too, as “mid-year” was the anticipated timeframe. Some even looked toward the second half of 2023.
There are potentially millions who could benefit from the decision, Ford said on Abbott’s earnings call.
“You’ve got about 4 million type 2 basal patients in the U.S.,” he explained. “About a third of them are Medicare. … I think this is a great growth opportunity.”
Dexcom CTO Jake Leach told Drug Delivery Business News recently that Dexcom is “really excited” by the potential expanded coverage.
“We see that as just another validation of how CGM can really benefit people with diabetes,” Leach said. “This is a whole new group of folks that haven’t had access to it before. I think we’re going to really see some great outcomes as that population starts to use CGM more regularly. We’re really excited about G7 servicing that population when it becomes available.”
He said at the time that he expected to see that coverage come through in the second half of 2023. However, Leach said “we’ll be ready,” if it should come earlier, which it now has.
Dexcom CEO Kevin Sayer also said on the company’s fourth-quarter earnings call that the population could nearly double Dexcom’s addressable reimbursement market in the U.S.
Both Abbott and Dexcom received boosts on the stock market in the immediate aftermath of the news. Shares of DXCM ticked up 6.7% at $118.20 apiece in midday trading. ABT shares rose 0.8% at $101.68 apiece.