Convatec warns of revenue hit from U.S. payment proposal

Convatec Group PLC warned that a draft payment proposal from the U.S. government for skin substitutes could hurt its revenue in 2026.

The medical products company said if the proposal from the Centers for Medicare & Medicaid Services is implemented in its current form, it could create a potential year-on-year headwind to fiscal 2026 revenue of approximately 1% to 2% of group revenue.

The proposal affects reimbursement rates for Convatec's InnovaMatrix® wound-care product.

InnovaMatrix® represented about 3% of group revenue in the four months to April 2025, and the company has guided for revenue of at least $75 million from the product in fiscal 2025.

The warning comes after Convatec in April raised its 2025 sales outlook for InnovaMatrix® after CMS postponed separate local coverage determinations that had created market uncertainty.

Convatec said it supports the agency's goal of removing excess costs but believes the new proposed rate is too low.

"However, the proposed reimbursement rate risks limiting patient choice, product quality and availability in the segment," the company said.

The company said it will engage in the public comment process, which closes on Sept. 12, and does not expect any changes before 2026 at the earliest.