If MDXG wants to continue to sell its tissue as a wound healing product, they will have to do Real FDA approved trials to keep their products on the market before the end of 36 month grace period. The true efficacy of the product will now be exposed.
In the meantime, the company can longer make the claims of healing and superiority over other competing products. See below from the final guidance released yesterday:
amniotic membrane product is used for wound healing and/or to reduce scarring and inflammation. This is not homologous use because wound healing and reduction of scarring and inflammation are not basic functions of amniotic membrane.
Will commercial payers and Medicare continue to reimburse the usage of amniotic membrane as a “wound cover” in treating DFUs considering now they are nothing more than a glorified band aid? Coverage and pricing are material risks now in addition to the material volume risks associated with trying to continue to stuff a stuffed channel. For example, United Health uses the words “Foster Wound Healing” in its coverage decision from February. As of January, the government has used HCPCS (hixpics) code Q4131 for Epifix according to this website. This code is listed as a “type C” meaning “Carrier Judgement,” so the insurance providers can choose to cover or not. They are not mandated by CMS to cover the product.
In the face of this double threat to top-line, MDXG already has a cost structure so high it earns next to nothing on gross margins of nearly 90%. Now, in addition to these costs, MiMedx will now have to conduct Real clinical trials, and the company reminds us:
Additionally, there are significant costs associated with clinical trials that cannot be estimated until the IND is approved. Moreover, data obtained from clinical activities are not always conclusive and may be susceptible to varying interpretations, which could delay, limit or prevent regulatory approval. The FDA may not grant approval on a timely basis, or at all.
Please click the links below for MiMedx’s now defunct and/or illegal marketing materials: