GI Dynamics hits Netherlands reimbursement milestone

GI Dynamics (ASX:GID) has secured preliminary reimbursement coverage in the Netherlands for its EndoBarrier Therapy treatment for obesity and type 2 diabetes.

Dutch healthcare authority NZa has agreed to allow a prespecified number of EndoBarrier procedures at the Rijnstate Hospital to be covered by a regional health insurance fund for the period between July 2013 and July 2016.

The ruling is designed to allow government authorities to collect clinical and economic data about EndoBarrier to then evaluate whether the therapy is eligible for permanent reimbursement on a national level.

GI Dynamics President Stuart A Randle said the ruling also presents an opportunity for other Netherlands hospitals to negotiate similar coverage for the treatment.

The Rijnstate Hospital had previously received reimbursement worth €9,000 ($13,000) per patient for a 50-patient trial of the treatment.

“We will continue to work collaboratively with [Dutch] physicians, payers and other constituents to make EndoBarrier Therapy a more accessible treatment option for people in the Netherlands who are battling type 2 diabetes and obesity,” he said.

In a research note, Bell Potter Securities said the firm considers the milestone “a major step towards [GI Dynamics] securing national level reimbursement in the Philippines”.

The research note points out that the Netherlands is one of the 10 biggest healthcare spenders in the world and one of only four nations who spend more than $5000 per capita on healthcare.

But Bell Potter also cautioned that the agreement only covers a preset number of procedures, and other hospitals wishing to take advantage of the ruling will have to negotiate individually with their regional insurance providers.

Bell Potter has maintained its buy recommendation for GID CDIs and its price target of $1.53.

EndoBarrier is an endoscopically delivered device designed to serve as a temporary barrier between food and a portion of the intestinal wall, to help treat obesity and type 2 diabetes.

GI Dynamics (ASX:GID) shares were trading 0.95% higher at $0.555 as of around 1.30 pm on Friday.