ConvaTec Group PLC (LSE:CTEC) shares were the biggest fallers on the FTSE 100 on Monday, after the US Centers for Medicare & Medicaid Services (CMS) published its final ruling on skin substitutes pricing late on Friday.
The CMS ruling dictates how the US Medicare federal health insurance program sets reimbursement rates for wound-healing products that replace or mimic human skin in medical treatments.
A reimbursement rate of $127.28 per square centimetre was confirmed, around 1.5% higher than initially proposed, but still far below the current $500-$1,000 range at which ConvaTec’s InnovaMatrix product is reimbursed.
Analysts said the decision will weigh modestly on group earnings from FY26 onwards, something that was already being priced in by markets since June saw first widespread concerns over looming US reimbursement changes.
UBS analyst Graham Doyle said he believes this rate, which implies a 75% price cut to ConvaTec's Innovamatrix product, which makes up around 3% of group revenues, is already reflected in sell-side and buy-side consensus forecasts. He reiterated his 375p price target.
Panmure Liberum’s Seb Jantet said the final rate removes some uncertainty but is "unlikely to be material". He reiterated his 'buy' rating and 310p target price. He expects a 1-2% hit to revenue and EBIT, with forecasts unchanged.
Peel Hunt’s Miles Dixon estimated the change could reduce 2026 group revenue by about 1.5% (around $37.5 million) and EBIT by roughly 4%, though increased volumes may soften the blow.
ConvaTec will issue its next trading update next week, offering further clarity on the impact.