By Victor Pikov, contributing editor
June 30, 2026 | The neuromodulation market for treating obstructive sleep apnea is currently experiencing a transitional rough patch, though its long-term market potential remains robust. Nominally represented by Inspire Medical, Nyxoah, and LivaNova, the market has seen staggered timelines of adoption. Inspire has been commercializing its devices in the U.S. since 2014, whereas Nyxoah entered in 2025, and LivaNova is targeting a full market launch in the second half of 2027. Despite the entry of new competitors, Inspire remains the largest player in the U.S. OSA market. The company generated a 1.6% growth in its first-quarter 2026 revenue compared to the same quarter last year and expects its full-year 2026 revenue to reach approximately $850 million. However, despite these steady baseline numbers, Inspire’s stock price unexpectedly plummeted by 70% from a year ago.
This market downturn is primarily driven by temporary disruptions in CPT coding. The complications arose as Inspire transitioned from its dual-lead implantation procedure for Inspire IV—which was covered by CPT code 64582—to a single-lead implantation procedure for Inspire V that integrates the respiratory sensor directly into the stimulation lead. To secure reimbursement for this new single-lead procedure, Inspire formulated two strategic approaches. Plan A focused on creating a brand-new, specific CPT code for the single-lead hypoglossal nerve stimulation procedure. This strategy suffered a setback when the American Medical Association rejected the initial code proposal at its May 2026 meeting, leaving the upcoming September 2026 meeting as the final opportunity for the code to be implemented by 2028.
Inspire’s Plan B relied on using the recently approved CPT code 64568, which offers a lucrative reimbursement level of $45,000 and theoretically covers all cranial nerves, including the vagal and hypoglossal nerves. However, CMS upended this fallback plan in January 2026 by explicitly removing OSA device implantation procedures from code 64568, restricting the code exclusively to the implantation of vagal nerve stimulation devices. These reimbursement headwinds prompted Inspire CFO Matthew Osberg to forecast a 9% to 11% year-over-year revenue decline in the second quarter of 2026.
Meanwhile, Nyxoah operates as the second player in the U.S. OSA market, projecting a global 2026 revenue of €36-40 million. Nyxoah CEO Olivier Taelman (soon to be replaced with a new CEO) estimated the company’s market share to sit between 12% and 14%, noting that commercial payers represented roughly 90% of their cases in the first quarter of 2026. Nyxoah’s revenue grew to €6.4 million in Q1 2026, marking a 13% increase compared to Q4 2025. Still, the company’s cash flow remains negative at $85 million due to the high costs associated with supporting U.S. commercial launch activities—such as sales, marketing, and market access—alongside ongoing R&D for an IPG upgrade and a low-cost disposable patch slated for early 2027. Amid these financial strains, Nyxoah’s stock price dropped by 80% over the past year, eclipsing the steep losses seen by Inspire.
The likely catalyst for Nyxoah’s severe stock drop is the shared difficulty of navigating CPT codes 64582 and 64568, given that Nyxoah’s Genio device utilizes a single-lead implantation procedure similar to Inspire V. According to Taelman, Genio claims continue to be processed under CPT code 64568; for instance, UnitedHealthcare recently added CPT 64568 back to its existing policy, allowing Nyxoah to maintain a 100% approval rate on reviewed prior authorization submissions.
For Medicare patients, claims for Genio implantations are being submitted under a temporary C code C8011, which is used exclusively for the Genio device. Beyond coding friction, Nyxoah’s valuation is also pressured by ongoing bidirectional patent infringement lawsuits with Inspire regarding implant design and lead placement. While intellectual property experts predict a 60-70% chance of a settlement because both companies hold defensible patent claims, a failure to reach an agreement would push the trial into 2027–2028, with potential appeals stretching into 2029. In the meantime, Inspire continues to push for a preliminary injunction to halt Nyxoah’s sales within the US.
Beyond company-specific hurdles, the broader U.S. OSA market faces systemic challenges, notably the confusion surrounding implementation of the CMS AI-reviewed WISeR (Wasteful and Inappropriate Service Reduction) program. The program has induced significant prior authorization delays for surgical procedures across six pilot U.S. states, including Texas, which has a population of 32 million. The impact of this program has been felt unevenly; while Inspire shifted its guidance due to reimbursement hurdles, Nyxoah has managed to avoid the friction. Taelman stated that the WISeR program has not hindered Nyxoah’s Q1 launch momentum, reporting a 100% approval rate for submitted Medicare patients due to the strategic expertise of their market access team, targeted collaborations, and active participation in the FDA Early Payer Feedback Program. The WISeR program recently lost its funding for 2027, an important step toward its termination. Additionally, the market is adjusting to the rise of weight-loss medications. GLP-1 drugs are creating short-term delays for device implantations as some patients choose to lose weight before committing to surgery, a trend that Inspire’s CFO noted is currently hurting short-term revenue due to the drugs’ increasing prevalence and adoption.
Despite these temporary issues regarding reimbursement coding and weight-loss drugs, the long-term growth trajectory of the U.S. OSA market is highly likely to persist and potentially accelerate. The underlying driver for this enduring optimism is that the market remains vastly underpenetrated. With an estimated 23 million people currently suffering from obstructive sleep apnea and 2 million continuous positive airway pressure prescriptions written annually, the clinical need represents a massive runway for growth after clearing immediate reimbursement hurdles.
