Roseville-based EnteroMedics, which sells a novel nerve-stimulator that can cause weight loss in patients with obesity, is hoping that positive new results from a "real world" study will be strong enough to convince insurers to pay for the medical device.
The Food and Drug Administration approved EnteroMedics' implantable Maestro Rechargeable System in January 2015 for treatment of obesity. But as often happens with new therapies, commercial insurers are reluctant to provide coverage until they can see more data on patients outside of a controlled clinical trial.
So far no insurer has a policy to cover the device, though patients at Veterans Affairs hospitals can get it through a five-year sole-source deal that EnteroMedics announced in October with a VA supplier, Academy Medical LLC.
That means patients paid out of pocket for virtually all of the 59 units that were sold between January and October this year. The company has been using consumer advertising in places like Los Angeles to find its potential patients.
The pacemaker-like device carries a list price of $19,000, though cash-paying patients may be eligible of promotional price of $10,000, EnteroMedics CEO Dan Gladney said Friday. The patient usually also has to cover the hospital and physician fees, which can drive the total cost of the procedure to $20,000 or more, depending on the location.
The device delivers what EnteroMedics calls "vBloc Neurometabolic Therapy," in which electric pulses are transmitted to the body's vagus nerve to block the natural electric signals that cause feelings of hunger and tell the stomach to expand in preparation for a meal. One result, Gladney said, is that the device doesn't impose any new restrictions on patients' diets.
The device is implanted through minimally invasive laparoscopic surgery. Although its battery is contained by a hermetically sealed case inside the body, it is recharged several times a week using a small loop placed on the skin near where the device is implanted in the abdomen.
The device therapy is seen as an alternative to surgical treatments that alter the anatomy, such as gastric bypass and gastric band procedures.
The FDA approved the device as safe and effective for two groups of patients over age of 18: those who have a body mass index of 40 to 45 (roughly 280 to 315 pounds in a 5-foot-10 patient); and people with BMIs of 35 to 39.9 who also have a related health condition like type 2 diabetes, high blood pressure, high cholesterol levels or obstructive sleep apnea and who have not had success in losing weight under supervision in five years.
The randomized, controlled clinical trial that led to the device's FDA approval last year found that patients had an average percent total weight loss of 8 percent after using the device for two years, compared to a 1 percent average total weight loss in the sham-control arm of the study. (A "sham" control is where patients get a placebo surgical treatment, but the implanted device is turned off.)
But Gladney said insurers want to see more evidence than just improvement in patients who take part in a rigorously controlled experiment.
The ongoing "real world" study of early patients is confirming the clinical study, Gladney said, with average total weight loss of 10 percent after nine months, which was the same as the clinical trial at that phase of the study.
"The payers made it very clear to us," Gladney said. "You've got to prove that you get at least the same results on commercial patients where you don't have a lot of control, as opposed to a clinical environment."
The company has reported losses totaling $18.9 million for the nine months ended Sept. 30, compared with $18.7 million in losses for the same period in 2015. Revenue for the most recent period totaled $644,760, up from $143,000. Its stock trades around 6 cents a share with a 52-week high of $2.70.