The Telix Pharmaceuticals Ltd (ASX: TLX) share price is having a very strong session on Thursday.
In morning trade, the radiopharmaceuticals company's shares are up 15% to a new record high of $20.16.
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Why is the Telix Pharmaceuticals share price rocketing?
The catalyst for this strong gain has been the release of a very positive announcement this morning relating to its United States business.
According to the release, the company stands to benefit from proposed changes announced by the Centers for Medicare & Medicaid Services (CMS).
These proposed changes are for the Hospital Outpatient Prospective Payment System (OPPS) rule to improve payments for diagnostic radiopharmaceuticals for Medicare patients in the United States, facilitating continued patient access after transitional pass through payment status expires.
Management notes that under the proposed changes, diagnostic radiopharmaceuticals, including its Illuccix product, will continue to be paid separately by the CMS for traditional Medicare Fee for Service patients in the hospital outpatient setting following the expiry of transitional pass-through payment status.
Another positive is that this would also apply to new diagnostic products being developed by Telix, if and when they are approved.
Why is this important?
Currently, in the United States, the costs associated with diagnostic radiopharmaceuticals are included in the payment for nuclear medicine tests (scans).
The CMS is proposing refinements to this policy to improve the accuracy of overall payment amounts by paying separately for any diagnostic radiopharmaceutical with a per day cost greater than US$630.
The CEO of Telix Americas, Kevin Richardson, was pleased with the proposed changes and appears to believe it could be a boost to Illuccix demand. Richardson commented:
Telix welcomes the proposed rule, which will facilitate more equitable and reliable access to advanced imaging for all patients and support physicians to prescribe the most clinically appropriate solution.
We commend the vision of CMS and the coalition, along with patient groups, for raising awareness about the necessity to reform the payment system to enhance patient outcomes and access.
Telix is committed to continued innovation in the field of radiopharmaceutical diagnostics to provide new solutions to further patient access, especially for underserved patient populations and in areas of high unmet clinical need.
Following today's gain, the Telix Pharmaceuticals share price is now up a whopping 82% since this time last year. To put that into context, a $10,000 investment a year ago would have grown to become just over $18,000 today.
