Christopher Posner: All right Annabel, I think let me unpack. The first one is around extending our TDAPA period and the rationale why and why that is the same or different than Parsabiv. Let me give that to Scott, and I may have a couple of words after.
Scott Terrillion: Yes, sure. So with regard to Parsabiv, it’s — it’s not a great analog in one sense, because the Parsabiv, obviously, there was an oral generic that was used afterwards. But there is one similarity with regard to why it would make sense and be consistent. And with Parsabiv, CMS was looking to get accurate information to understand how much we might add to the bundle. And that’s the same argument we’re going to make. That at the end of the day, we don’t believe that the utilization and the uptake is going to be accurate in an environment where there would be new money added at the end of the TDAPA period. So we think the precedent there with that regard, which is get better data is consistent with Parsabiv.
Christopher Posner: Yes. And Annabel, I think on your second question, hopefully, I got it right. Basically, if I understood the question right, the proposed methodology from CMS could suggest a reverse incentive, meaning that some of the dialysis organizations would be incentivized just to pocket the additional money and not use KORSUVA. I’ll say a couple of things. I mean one is — it’s certainly — they could do that. Our belief is that that will not happen. Dialysis organizations are very much used to working in the capitated environment, meaning they’re going to lose some money in some patients and make some money on others. So we remain pretty confident that the appropriate patients will continue to have access to KORSUVA.
And listen, we all have the same North Star around patients being at the center. And our kind of what we could control here at Cara and what we’re really focused on is making sure that there is adequate and accurate funding so patients are going to have access to this drug. That’s what Scott alluded to in his earlier comments, and that’s really our focus.
Annabel Samimy: I guess also, just to be clear, the payment also is recalculated every year, correct? So if utilization is down, that’s going to go down.
Christopher Posner: Well, technically, based on their proposal, that could happen, correct. But it would be calculated on an annual basis.
Annabel Samimy: Okay. And then just to switch gears for a bit. Would you say that the reorder for DaVita, their independent dialysis provider is 70%. Is that about where you would expect reorder rates to be in a normalized environment for say, Fresenius when the [indiscernible] wash out?
Christopher Posner: Yes, I would. I mean we’ve seen it pretty consistent in that 70%. I mean, DaVita’s actually this month — or this quarter was — or second quarter, sorry, was 73%. It’s interesting if you look at USRC, which is the largest of the MDOs. They’re about an 80% reorder. But I think we feel pretty comfortable that they’re going to be in the range in that 70% reorder rate. We’ve seen that pretty consistently. Really since the launch. And I’ve been really pleased. And Annabel, we’ve talked before, I’ve been incredibly pleased with that reorder rate. We don’t get patient-level data. We do look at reorder rates as a proxy for, call it, a really good patient experience. And we see this consistent month-to-month reordering by clinics that have started dosing patients.
Annabel Samimy: Okay. Great. And if I could just squeeze in one more. I did notice that you expected Fresenius to be reordering by the end of the year. Is that a change from your expectation of seeing normalized inventories by midyear?
Christopher Posner: No. I would say we’ve always expected — I mean we’re looking at the growth trends on the quarter-to-quarter basis, and we saw a 48% increase in the number of clinics now exhausting their initial stock from Q3 and reordering. That’s roughly 720 clinics. If you see that growth continue, we would expect the majority of these clinics to have exhausted their inventory and reorder. And again, with the 70-plus percent reorder rate that we would fully expect from percentage once they kind of normalize with that. I mean it really forms a nice growth annuity as more and more patients kind of get this product. So we haven’t come off of that. We’re just kind of analyzing our growth rate and seeing if this continues, we feel pretty good about the majority of these clinics in the second half of the year exhausting their stock.
Operator: Our next question comes from the line of Joseph Stringer of Needham & Company.
Joseph Stringer: Now that you’re a couple of quarters into the launch, how are you thinking about potential monetization of the IV KORSUVA revenue stream? And what are some of the puts and takes that go into that decision?
Christopher Posner: Joey, so if you are referring to the ex-U.S. royalty revenue, I think we haven’t really been terribly specific about what we plan to do from a financing perspective on the nondilutive front. I mean, maybe, Ryan, do you want to say a couple of words on that?
