Company: INSP
Filing Date: 2025-05-05
Form Type: 10-Q
Source: 0001609550-25-000020
Chunk: 86

Company: Inspire Medical Systems, Inc.
Filing Date: 2025-05-05
Form: 10-Q
Item: Part I, Item 8
Chunk 86
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 payment by various third-party payors, such as commercial payors and government healthcare programs. Our Inspire system is currently covered on a per-patient basis for patients insured by commercial payors, under Local Coverage Determinations for patients insured by Medicare and Medicare Advantage, and under U.S. government contract for patients who are treated by the Veterans Health Administration. As of May 5, 2025, we have secured positive coverage policies with many U.S. commercial payors, including all large national commercial insurers, covering more than 300 million lives in the U.S. In addition, all seven Medicare Administrative Contractors provide coverage of Inspire therapy when certain coverage criteria are met. 

Reimbursement in other countries can often be established through a combination of private (commercial insurance) and public funding sources, or at the hospital level through innovation budgets. 

For the three months ended March 31, 2025, 96.2% of our revenue was derived in the U.S. and 3.8% was derived outside of the U.S. No single customer accounted for more than 10% of our revenue during the three months ended March 31, 2025.

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We rely on third-party suppliers to manufacture our Inspire system and its components. Many of these suppliers are currently single source suppliers. Currently, all of our manufacturing is done in the U.S. and most components for our Inspire system are sourced in the U.S. We have experienced supply disruptions in the past. During the third quarter of 2023, we experienced an inventory supply issue related to our polyurethane-based stimulation leads, one component of the Inspire system used only in the European market at that time. In 2022, the FDA approved our silicone-based stimulation and sensing leads in the U.S., which replaced the polyurethane versions of the leads, and we stopped manufacturing polyurethane leads. We obtained certification under the EU MDR in July 2024, and silicone leads may now be marketed throughout the EU. During the fourth quarter of 2023 and extending into early 2024, a delay in EU MDR certification and the shortage of polyurethane-based stimulation leads caused delays to implant procedures which adversely affected our business in Europe, including a reduction in our European revenue, and thereby our consolidated revenue.

We typically seek to maintain higher levels of inventory to protect ourselves from supply interruptions, and, as a result, we are subject to the risk of inventory obsolescence and expiration, which