USPSTF Decision Could Benefit CEMI
Brian Marckx, CFA
CHEMBIO DIAGNOS (CEMI): Free Stock Analysis
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A Reuters article yesterday (8/19/2012) notes that health officials
with apparent inside knowledge and speaking on condition of
anonymity expect that the U.S. Preventative Services Task Force
(USPSTF) will issue a draft recommendation by year-end in favor of
widespread HIV screening for all adolescents and adults.
Assuming that happens and the recommendation is finalized (the
final decision would follow a public comment period), it could
directly benefit demand for
rapid HIV tests as a USPSTF "A" rating means insurers would be
required to reimburse for the recommended preventative service (in
this case HIV testing for all adolescents and adults).
The current USPSTF recommendations relative to HIV screening have
an "A" rating for all adolescents and adults at increased risk of
HIV infection but a "C" rating for those not at increased
risk. A "C" rating is tantamount to leaving the decision up
to the physician but also likely means that insurers will not pay
for the cost of the test. The supposed upcoming decision to
recommending HIV screening to all individuals would essentially
change the "C" rating to an "A" rating, requiring insurers to
reimburse and likely increase demand for HIV tests.
The CDC had already voiced its opinion in favor of widespread HIV
screening, although their recommendations carry significantly less
weight, especially in regards to reimbursement.
Demand for CEMI's already FDA-approved lateral flow rapid HIV
tests, which has been very strong through the first half of 2012
(+39% revenue), could be an initial beneficiary of a USPSTF action
which would also likely catalyze the launch of the company's DPP
HIV test, which could happen by mid-2013.
Is HCV Screening Next?....
USPSTF currently has a "D" rating on routine screening for
hepatitis C (HCV) in asymptomatic adults not at increased
risk. "D" rating means USPSTF recommends against it and has
found evidence that it may be ineffective or that harms outweigh
By contrast the CDC last week finalized an earlier draft
recommendation recommending that all Americans ages 45 - 65 be
tested for the virus. The CDC recommends that all baby
boomers get a one-time HCV test which "will help avert a major
increase in liver disease and deaths in the U.S."
If USPSTF eventually follows CDC's lead on HCV screening (which
they seem to have done on HIV), that could also benefit CEMI, which
has an HCV test using its proprietary DPP platform currently under
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