Since August 2022, Pacific Edge has been awaiting an outcome on a decision on whether its Cxbladder tests would be covered by Medicare in the United States and has acknowledged the outcome could have a significant impact on its revenue.
Cxbladder is a non-invasive test used for the detection of bladder cancer from a urine sample.
This week, Medicare administrative contractor Novitas, which has jurisdiction for Pacific Edge’s US laboratory, dealt a blow to the company by ruling the cost of the test would not be covered.
Its final determination said the line of Cxbladder tests all suffered from “insufficient test validation”, demonstrated “several population biases” and most of the primary literature on the test’s development and performance was funded, “if not directly written by”, its parent company.
“As a result, Cxbladder tests are not reasonable and necessary to support positive outcomes in the management of bladder cancer, and are, therefore, not payable.”
It also said Cxbladder tests generally had a high number of false positives and the majority of papers avoided disclosing the number of false positives of their tests.
Four tests in the Cxbladder line — Detect, Enhanced Detect, Monitor and Triage — would be affected.
Pacific Edge announced in a statement to the New Zealand stock exchange yesterday it had placed a trading halt on its shares after becoming aware of the decision.
“Pacific Edge is currently reviewing the [decision] and the associated documentation and needs time to assess the implications of the announcement, consult with US legal advisers and industry partners and prepare an announcement that provides context to investors.”
Chief executive Dr Peter Meintjes declined to comment yesterday.
But in May last year, he said the decision on Medicare coverage remained the biggest determinant of its prospects for the immediate future.
In the event of a non-coverage determination, strategies included a possible legal challenge, Medicare patients assuming responsibility for the payment of Cxbladder tests and the continued advancement of Pacific Edge’s clinical evidence programme, which would give it “multiple opportunities” to seek a coverage reconsideration.
Pacific Edge is expected to provide an update to the market on Monday.
The final decision comes into effect on February 23.
Pacific Edge was founded in Dunedin in 2001 and specialises in the development and commercialisation of bladder cancer diagnostic and prognostic tests for better detection and management.
tim.scott@odt.co.nz
