What Happened?
Shares of medical technology company Inspire Medical Systems (NYSE: INSP) fell 7.5% in the afternoon session after the release of a key inflation report revealed prices paid to U.S. producers rose more than anticipated in January.
The Producer Price Index (PPI), which measures inflation before it reaches consumers, increased by 0.5% last month, surpassing economists' forecasts of a 0.3% rise. This report, indicating persistent inflationary pressures within the economy, sparked concerns among investors. The data suggests that the Federal Reserve might delay potential interest rate cuts that the market had been anticipating. The prospect of higher interest rates for a longer period can negatively affect corporate valuations and borrowing costs, leading to a broad market downturn that is impacting various sectors, including healthcare and medical devices.
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What Is The Market Telling Us
Inspire Medical Systems’s shares are extremely volatile and have had 31 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was about 23 hours ago when the stock gained 19.7% on the news that reports revealed that the Centers for Medicare & Medicaid Services (CMS) is preparing to assign specific C-codes for the Inspire V device in the April 2026 Integrated Outpatient Code Editor (IOCE) update. This news, highlighted by analysts at KeyBanc, provides a critical resolution to recent reimbursement uncertainties that had previously weighed on the company's stock. By introducing dedicated C-codes, CMS simplifies the billing process for hospitals and surgical centers, ensuring more predictable and potentially higher payments for the company's neurostimulation therapy used to treat obstructive sleep apnea. The market's reaction reflects a major recovery in investor confidence following a period of volatility. Earlier in 2026, Inspire Medical Systems had lowered its revenue guidance due to "coding headwinds." The move to add specific C-codes for the Inspire V system is seen as a "regulatory win" that removes these hurdles, clearing a path for accelerated adoption.
Inspire Medical Systems is down 31.1% since the beginning of the year, and at $63.60 per share, it is trading 65.7% below its 52-week high of $185.59 from February 2025. Investors who bought $1,000 worth of Inspire Medical Systems’s shares 5 years ago would now be looking at an investment worth $255.18.
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