Operator: This question comes from Gregory Renza of RBC Capital Markets. Gregory, your line is open.
Gregory Renza: Congrats on the progress. Maybe just a few for me. Maybe building on the prior theme as well. Dave, I know you touched on this a little, but could you just comment about your approach to the organic price increases with respect to EXPAREL? How are you strategizing about that, especially with maybe more patients coming online? Do we kind of think about it as in line with historicals? Or are there other considerations that you and the team are considering?
Dave Stack: Yes. Thanks, Greg. Well, I think we can go back to — just to January, and I’ll use that as the basis of an answer to your question. So, their 20 ml is the effective dose for many of the procedures that we’ve historically treated. And the trials that Roy outlined for lower extremity nerve block, where we expect to be launching that in late this year and early next year, both the 96-hour reduction in pain and opioid consumption for both of those trials was achieved at the 10 ml dose. One of our fastest-growing areas, frankly, in our current business is in oral maxillofacial surgery. And largely, that is 5 mls per tube and you end up with a lot of these extractions also being a 10 ml dose. And in many of the pediatric procedures that are being done, not these very large abdominal and orthopedic procedures, but many of the more soft tissue kinds of procedures, we also see a 10 ml dose.
So, we see a basket of surgical procedures where 10 ml is the procedural dose. And we are getting several days of pain control and reduced opioids with 10 mls. And so, the first line of strategy here was to close the gap between the 20 ml and the 10 ml because, in different surgical procedures, you can achieve the same results with half the dose, right? So that was the broad strategy, if you will. Your question is a very interesting one as we go forward from here. As we achieve TRICARE, and as we achieve NOPAIN, our outlook is that something like 75% of our total addressable market will be reimbursed by 2025. And so, we’ve made the statement that we expect to be consistent with CPI targeted kinds of price increases. We don’t intend to raise the price by 40%.
There are some other models in this space that suggest that things don’t go well. We should take that approach. And so we expect that we would have a CPI type of increase as we go forward. That’s for EXPAREL. For ioveraº, Greg, even more importantly, I think, is we are working hard to improve gross margin, which gives us more strategic runway as we try to help more patients. And our ability to lower the price on — or lower the COGS on ioveraº as we go into stellate ganglion blockade in spasticity and some of these things, the competitive opportunities are priced in the thousands of dollars. Our intention is to continue to price ioveraº around $500, so that we can help all of these patients who are in really desperate straits, given the poor choices that they have for any kind of pain control in any kind of treatment of their afflictions.
So I hope that answers your question. But I don’t expect that we’re going to go crazy when we have reimbursement. I think we’ll use CPI directed and trying to be fair to our shareholders by offsetting any increases in our annual merit increases to our employees. But I don’t think you’re going to see us take advantage of this in an inappropriate way. I think we’d rather sell more and lower the COGS and improve the gross margin by selling every vial we can make when we have two 200-liter facilities online. And when we believe that we can sell, we can make. As we go into 2024, our forecast suggests that we can make over $2 billion worth of EXPAREL. And so, if we can get margins into the mid-80s, I would much rather sell every vial we can make than raise the price in any kind of a way that might be inappropriate, given our mission.
