Zacks Equity Research today reported that Medtronic (NYSE:MDT) stands to gain from yesterday’s CMS coverage expansion for diabetes technology.
CMS’s expanded coverage, confirmed by Medtronic yesterday, covers all types of CGMs (continuous glucose monitors), including adjunctive and non-adjunctive CGMs. The coverage includes CGMs that integrate with Medtronic insulin pumps.
Zacks said the new rule will likely bolster Medtronic’s Diabetes Business as a result of the expanded access to its diabetes technologies.
“Given the substantial market prospects, Medtronic stands to gain from the recently expanded Medicare coverage to include CGMs that integrate with the company’s insulin pumps,” the equity research firm wrote.
The expanded coverage and potential gains made from the CMS rule will likely be welcome news to Medtronic, which recently had its stock downgraded by Wells Fargo amid issues within its diabetes arm.
Earlier this month, Medtronic announced that it received an FDA warning letter after an inspection of its Diabetes Business found inadequacies for specific medical device quality system requirements at the company’s Northridge, California, facility. The warning letter mentioned the areas of risk assessment, corrective and preventive action, complaint handling, device recalls and the reporting of adverse events.
As a result, the company’s stock dipped down more than 6% at one point, falling all the way to $101.28 on Dec. 16 in the aftermath of the FDA inspection news. The stock is currently up 1.1% at $102.46 per share in midday trading on Dec. 23.