3rd Nov 2025 13:07
(Alliance News) - Convatec Group PLC on Monday confirmed that a pricing decision in the US will represent a modest headwind to revenue in 2026.
The London-based medical products and technologies company said the Centers for Medicare & Medicaid Services decision published on Friday outlined their revised payment rate of USD127.28 per square centimetre for skin substitutes in wound care, with effect from January 1, 2026.
This is around 1.5% ahead of the initially proposed rate.
In July, the CMS announced proposals aimed at reducing Medicare spending on skin substitutes.
The CMS currently treats skin substitutes as biologicals for the purposes of Medicare payments. It said it intended to reclassify skin substitutes as incident-to supplies, to reduce spending on the products by almost 90%.
The CMS noted that spending on skin substitutes has had "unprecedented growth", but claimed this was largely attributed to "abusive" pricing practices in the sector, including the use of products with limited evidence of clinical value.
At the time, Convatec said the proposed reimbursement rate "risks limiting patient choice, product quality and availability in the segment".
In a statement on its website on Monday, the FTSE 100 listing said the decision by the CMS represents an estimated headwind in 2026 of 1% to 2% of group revenue, unchanged from the guidance given at the time of first half results.
In 2024, Convatec reported revenue of USD2.28 billion.
The company said its wound treatment product, InnovaMatrix, is "highly effective" with significant health benefits, "strong user feedback and clinical evidence."
Convatec said it submitted further real-world evidence to CMS in October, in addition to RWE published in December last year.
The firm said randomised controlled trials continue to progress towards target publication in 2026.
"We are confident of delivering long term profitable growth from InnovaMatrix, including developing sales and securing coverage across a range of indications, both within and outside the US," it added.
The product is cleared by the US Food & Drug Administration in 15 separate medical indications, based on an established predicate product, under a 510k medical device licence.
Convatec noted InnovaMatrix represented around 3% of sales in the first half of 2025.
Shares in Convatec were down 2.8% at 237.40 pence each in London on Monday.
By Jeremy Cutler, Alliance News reporter
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