Medicare May Pump Big Dollars to Thoratec


January 4, 2007

AP reports that a Dec. 27 Medicare proposal may could double the number of hospitals authorized to implant the HeartMate mechanical heart device made by Thoratec, the only company with a U.S.-approved device to treat heart failure patients who are not eligible for heart transplant because they have a life expectancy under two years.

Sixty-nine hospitals are currently reimbursed for implanting the battery-powered device, which is surgically implanted in the chest to help the heart pump blood throughout the body. The $65,000 device is also used as a temporary treatment for patients awaiting a heart transplant and patients recovering from open-heart surgery.

Even more significant for Thoratec, analysts predict the resulting expansion of their present market will also familiarize many more physicians with the company’s next-generation product, HeartMate II, a smaller, quieter and more durable device that could be used as an "off-label" treatment in thousands of heart failure patients who aren't eligible for highly expensive transplant operations, but are expected to live several years.

A research note from First Albany analyst Jason Mills says the Medicare change could significantly widen the market for HeartMate II, which is slated for Food and Drug Administration approval this summer.

Comments on the proposed policy are being accepted through Jan. 26, and the government will issue a final decision in April. Hospitals can then apply to become Medicare-certified to implant Heartmate under the new criteria.