Hit to Pacific Edge revenue

A decision by the US national health insurance programme is expected to cause a significant revenue drop for a New Zealand diagnostics company.

Pacific Edge said Medicare coverage of its Cxbladder tests in the US market was expected to cease from July 17. It follows a local coverage determination (LCD) by Novitas, the medicare administrative contractor with jurisdiction for Pacific Edge’s laboratory in Hershey, Pennsylvania.

It specifically notes the Cxbladder tests Triage, Detect, Monitor, Resolve and Detect as ‘‘not considered medically reasonable and necessary’’, the threshold required for coverage under the US Social Security Act.

Pacific Edge said it would explore its legal options and consult stakeholders, as well as other affected companies. It said its revenue was expected to reduce substantially from current levels until Cxbladder tests regained coverage.

Chief executive Peter Meintjes said the company was surprised and disappointed with the finalised LCD.

He said it seemed to materially misunderstand the role biomarkers could play in ‘‘first line’’ diagnostics for risk stratifying patients with hematuria into those who would benefit from further potentially more invasive medical attention and those that would not.

‘‘While Novitas appears to have reviewed all available evidence for Cxbladder, we believe that Novitas’ analysis has sought to predominantly emphasise negative comments in Cxbladder publications. We believe that focusing predominantly on only negative comments likely mischaracterises issues or confounding factors with our evidence that were addressed in subsequent publications and routine commercial testing, while also dismissing the support Cxbladder receives from key opinion leading urologists, and the US patient advocacy group Bladder Cancer Advocacy Network.’’