by Brian Gormley

A plan to speed Medicare coverage for breakthrough medical devices would spur more venture capitalists to take risks on nascent but potentially game-changing disease treatments, industry watchers say.

Valencia, Calif.-based SetPoint Medical Corp., which said in October that it had secured breakthrough designation for a treatment that stimulates the vagus nerve to treat rheumatoid arthritis, recently held a first closing on its new round of venture financing. The prospect of starting out with four years of Medicare coverage aided its discussions with investors, CEO Murthy Simhambhatla said.

“I cannot overstate how important this proposed rule is to fostering innovation,” Dr. Simhambhatla said.