(Story updated Friday, November 13 at 12:55 p.m. ET.)
One day last week, Bryn Mawr Hospital in Pennsylvania released a case study praising the performance of a stroke-preventing device in an 81-year-old male who couldn't use warfarin because of frequent falls, some of which resulted in head trauma and intracerebral bleeding.
It's notable, because just one day prior, the U.S. Food and Drug Administration said the devicemaker had issued a field correction in August to prevent blood leakage during implantation. One day prior to that announcement, the CMS proposed limiting coverage of the device not only to people in a clinical trial, but for people who can't take warfarin.
It was a one-two punch for Boston Scientific Corp.'s surgical device called the Watchman.
But even with those obstacles, many believe that for use of the Watchman, it's business as usual - at least in the short term.
An estimated 2.7 million Americans have atrial fibrillation, a condition that causes irregular and rapid heart rate. Many are prescribed warfarin to ward off stroke. But some patients who take the blood thinner suffer severe bleeding as a side effect.
Watchman and other innovative devices like it have been touted by cardiologists as game changers in managing atrial fibrillation. In fact, the Watchman has often been the subject of hospital press releases and demonstration videos. Experts, analysts and hospital department heads say the devices continue to be top-shelf tools in hospital catheterization labs, multimillion-dollar specialty service lines used by hospitals to recruit physicians and attract new patients.
The proposed limited Medicare reimbursement shouldn't impact current use of the device, in the near term, said Dr. William O'Neill, director of the structural heart disease program at Henry Ford Hospital in Detroit. He added that the hospital now sees some Medicare reimbursement through a local coverage determination. Until national coverage is finalized, that local coverage stands.
The CMS is soliciting comments on its proposed coverage decision through Dec. 10 and is expected to announce its final decision by February next year. That's plenty of time for providers to bend ears.
Also limiting near-term impact of provider user of the device is that Boston Scientific has sold Watchman to only the 50 hospitals involved in its clinical trials before it got FDA approval, CEO Mike Mahoney announced in April during an earnings call.
The company wanted physicians to get up to speed on the implant procedure. Sales would grow to other sites only once Boston Scientific felt the initial sites had mastered implantation.
And while those sites might be incrementally gaining experience with the procedure, “it's a really minor one right now,” said Michael Weinstein, a JPMorgan Analyst who specializes in cardiovascular medical technology. Weinstein says most AF patients can take warfarin or other blood thinners to ward off strokes.
Still, JPMorgan had predicted the Watchman would garner $455 million in U.S. sales between 2016 and 2020. In what it now calls the worst-case scenario, it reduced the potential earnings to $170 million over the same period.
Analysts noted that Boston Scientific's 2015 earnings estimate for its structural heart unit which includes Watchman and its Transcatheter Aortic Valve Implantation (TAVI) device will likely remain unchanged since it was based on the current limited coverage of Watchman now receives around the county. The company estimated the unit would bring in $75 million to$100 million by year's end.
“Given that Boston Scientific was already seeing issues with Watchman coverage -- which is what prompted the company to seek an National Coverage Determination in the first place, we expect little incremental impact to the company's current 2015 [earning's] guidance,” Leerink equity analyst Danielle Antalffy said in a research note.
But that doesn't mean the Watchman is out of the woods in the long term. For instance, how will the CMS define the clinical trials it wants to see conducted to get additional data on the product's efficacy?
“This proposal raises several questions…the most important one, in our view, is whether participation in the national registry satisfies the “clinical trial” requirement,” Weinstein said in a note.
With a registry, treatment decisions are at the discretion of doctors, who simply report on patients as they present for care. If that's the case, Weinstein said, then the CMS's decision is a “non-issue.” “However, a stricter interpretation of CMS's language would imply that only implants done as part of a sanctioned clinical trial will be covered, i.e., no commercial use,” he said.
In contrast, clinical trials are controlled experiments designed to test a focused clinical hypothesis. Treatment decisions are generally dictated by the protocol and randomized rather than directed by the practitioner.
Another long-term issue where the ultimate impact on providers is unclear, is the decision to limit Watchman to people who cannot take warfarin, which “is the precise opposite of both the FDA label and the patient population studied in clinical trials—all of whom were warfarin-eligible, Antalffy says.
The FDA, which delayed approving the Watchman three times over six years, estimates nearly 30,000 units have been implanted around the world.
In his note, Weinstein cited a study that found that just 30% of atrial fibrillation patients had a documented contraindication for warfarin. And some doctors have said the surgery required to implant Watchman should only be a last resort for people who can't take warfarin.
“I agree with the suggestion that this shouldn't be given to afib patients across the board,” Dr. Samir Dabbous, the medical director for heart and vascular services at Beaumont Health in Michigan.
After reviewing the initial data, Dr. Rita Redberg, a cardiologist and professor at the University of California at San Francisco, said she remains skeptical that Watchman will stave off stroke in the long term for atrial fibrillation patients. For instance, she noted, one of the trials did not prove Watchman was more effective than warfarin in reducing stroke, blood clots and deaths after 18 months.
“I'm anxiously awaiting more data on this,” said Dr. Rita Redberg, a cardiologist and professor at the University of California at San Francisco.
And there's yet another wrench to throw in the mix. New blood thinners hitting the market don't produce the same side effects as warfarin.
“The newer oral anticoagulants (have) made the Watchman-type devices almost obsolete,” said Damian Carlson, an analyst at the ECRI Institute, a not-for-profit organization that researches patient safety, quality and cost-effectiveness of care. “The other (left atrial appendage) device developers have essentially pulled out of the U.S. market race.”
But providers note there will always be people who can't handle blood thinners, which is why Watchman and devices like it need to be on the market.
“We believe the Watchman device can be used to safely close the left atrial appendage in high-risk patients,” Bryn Mawr Hospital said in its case study.
