Chordate Medical has developed Kinetic Oscillation Stimulation (KOS), a nerve stimulation treatment technique for chronic migraine and chronic nasal congestion (rhinitis). The company's products are available in the Nordic countries, Germany, the UK, Italy, Israel and Saudi Arabia.
Established business model in Saudi Arabia
Saudi Arabia is one of the markets in which the company has been active the longest. Already at the end of 2020, the company received a reimbursement code that means that patients with private health insurance can have all or part of the costs paid for a treatment. About a year later, at the end of 2021, the first insurance-reimbursed KOS treatment for rhinitis was carried out.
Rhinitis – a pronounced health problem
Rhinitis, chronic nasal congestion, is a major health problem in Saudi Arabia due to air pollution in the major cities, high prevalence of mites and mold spores, combined with constantly changing outdoor temperatures and cooled indoor environments.
Furthermore, long-term use of nasal sprays is a common problem, which is why KOS treatment, which is drug-free, can be a valuable treatment option.
Chordate Medical estimates that patients should be treated 2-3 times more often with KOS in Saudi Arabia than in Northern Europe due to the poor air quality.
New distributor
At the end of 2022, Chordate Medical entered into an agreement with a new distributor in Saudi Arabia, Janin MedicalThe distribution agreement covers both rhinitis and migraine treatment, but so far Janin Medical only has permission to distribute the KOS treatment for rhinitis. The distributor is working to obtain market authorization for the migraine treatment and Chordate Medical estimates that the processing time will be at least two months.
First order – more are waiting
Janin has now received a first order for equipment and consumables for rhinitis treatment from the private healthcare company. Nahdi Care ClinicsThe order is worth SEK 120 and concerns one of the healthcare company's four hospitals in Saudi Arabia's second largest city, Jeddah.
Chordate expects two of the other hospitals to place orders for the company's system shortly. In addition, it expects orders from three publicly owned hospitals in Jeddah, Makkah and Dammam that have been evaluating KOS for a period of time.
If more orders for the rhinitis treatment continue to roll in, the path to market approval for the migraine indication may be both shorter and less complicated, according to Chordate Medical.
Favorable insurance system
Treatments via Nahdi Care Clinics are in most cases covered by insurance from the private health insurance company. BUPA Arabia, the leading health insurance provider in Saudi Arabia.
In the early 2000s, Saudi Arabia passed a new law requiring private employers to cover non-Saudi employees with health insurance. This has contributed to a shift in the way healthcare services are provided and paid for, with a sharp growth in the capacity of the private healthcare sector and in the number of health insurance companies.
The insurance code that KOS has in Saudi Arabia refers to private hospitals and clinics that belong to the VIP, Class A, and Class B categories.
Comment from CEO Anders Weilandt
To increase the chances of a successful establishment in Saudi Arabia, Chordate Medical has opened a representative office. In addition, the company sees potential to expand to more countries in the Gulf Cooperation Council, GCC, not least the United Arab Emirates and Qatar.
BioStock contacted Chordate Medical's CEO Anders Weilandt to learn more about the potential for KOS in the GCC area.
In your press release you mention that patients should be treated more frequently with KOS in Saudi Arabia due to poor air quality. How often does the treatment need to be performed for it to be effective?
– Most doctors recommend 4-5 treatments per year depending on the symptom picture. This is more often than what we have seen as normal in the Nordic countries, for example, but it is also a completely different air environment in the country.
You also write that a patient in Saudi Arabia generates an average annual revenue in the final sales stage of approximately SEK 10. Would you like to explain the calculation here?
– The price from distributor to end customer can vary, but is normally around SEK 2000-2500 per treatment. If a patient needs four to five treatments per year, the total will be around SEK 10.
»Getting insurance reimbursement in place is ultimately crucial for a sustainable business in most markets where we focus our work. We are working tactically to get so-called treatment codes in place«
Insurance reimbursement seems to be a winning concept. Are you working with similar reimbursement models in more markets?
– Getting insurance compensation in place is ultimately crucial for a sustainable business in most markets where we focus our work. We are working tactically to get so-called treatment codes in place, both on the private and public side. However, the structures and decision-making paths are radically different in different markets.