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Health (CVS) has launched a clinical trial of a home dialysis
system that could give it a share of the $35 billion Medicare market. Investors see a legitimate threat from CVS to shake up the sector. Dialysis center operators Fresenius
Medical (FMS) and DaVita (DVA) both traded lower. But embattled CVS stock couldn't catch a break, falling along with Dow Jones
drugstore giant Walgreens Boots Alliance (WBA).XCVS stock slipped 2% and Walgreens stock 2.3% on the stock market today. The relative strength line for both stocks is moving sideways, near multiyear lows.Meanwhile, DaVita stock lost 1.8% and Fresenius Medical stock 3.6%.CVS Health Has Segway Of Home DialysisCVS has teamed with Segway inventor Dean Kamen on the HemoCare Hemodialysis System to perform dialysis at home, as medical professionals monitor the treatment remotely. Fresenius, DaVita and Baxter International (BAX) have rival technologies for home dialysis. Still, CVS could be a formidable competitor, with its network of in-store clinics and Aetna managed care division.Home dialysis is seen as not just less expensive but potentially more effective, facilitating longer treatments. Dialysis patients typically visit clinics three times a week to remove toxins from their blood. Medicare spends $114 billion a year on Americans with kidney disease, of which nearly one-third goes to dialysis treatments.President Trump last week signed an executive order directing Health and Human Services to advance kidney care. A new payment model is intended to improve incentives for disease prevention, home dialysis and transplants. Shares of DaVita and Fresenius initially sold off following Trump's order. But the stocks rebounded as analysts found the altered incentives relatively modest.CVS Health caught break last week, as the White House scrapped its proposed drug rebate rule. The rule would have nixed payments that drugmakers pay to prescription benefit managers, such as CVS Caremark. PBMs are the middlemen that use their market power to bargain down drug prices, but take a share of those rebates as profit. CVS stock jumped nearly 5% on the news, but has since given up more than half of those gains. CVS faces pressure on a number of fronts, including e-commerce competition for nonprescription items and potential disruption from Amazon (AMZN) via its PillPack subsidiary.YOU MIGHT ALSO LIKE:IBD Stock Of The Day: Profitable IPO Sets Up Again After TriplingQ2 Earnings Preview: These 16 Stocks Expect 50% To 550% GrowthBest Growth Stocks To Buy And Watch: See Updates To IBD Stock ListsIBD Digital: Unlock IBD's Premium Stock Lists, Tools And Analysis TodayThe post CVS Health Tests Home Dialysis System; DaVita, Fresenius Hit appeared first on Investor's Business Daily. Weiter zum vollständigen Artikel bei "Investors Business Daily"
Quelle: Investors Business Daily