BTG’s (BTG) varicose veins treatment Varithena has finally been assigned a permanent insurance code in the US. Doctors who implement the procedure will be entitled to up to $1,697 (£1,292) reimbursement via the US government’s Medicare and Medicaid insurance programmes, meaning prescription is now expected to pick up.
Varithena insurance has been the thorn in BTG’s side since 2015 when the treatment was first launched in the US. Originally, its temporary code meant doctors could only expect up to $1,129 back from the insurers, short of the $3,000 it costs for use on multiple veins. Without guaranteed reimbursement, doctors have been reluctant to prescribe Varithena and sales have fallen far short of expectations during the past two years.
But even with these new codes, broker Panmure Gordon remains cautious about forecasting an uptick in sales due to competition in the market. And even chief executive Louise Makin is still reluctant to get excited, warning that the impact on physician adoption and insurer practice might not become clear before the end of 2018.
Investor enthusiasm for the announcement was also dampened by news that BTG will have to take a £53.5m provision in its upcoming first-half results due to problems surrounding another product. A Delaware court has found the group guilty of breaching the terms of its distribution agreement with peer WellStat, regarding chemotherapy toxicology treatment Vistogard. WellStat claimed the UK group had failed to invest in a large enough sales force in the US. BTG has been forced to pay damages and will lose the US rights to the treatment. BTG is considering its appeal options. Considering Vistogard only contributed £3.5m of sales in the year to March 2017, this news won’t have muddied the outlook too much. However, the one-off provision is sure to impact half-year results, due on 14 November.
