Devices Wound Care Reimbursement

 News Release - November 12, 2007

Derma Sciences Receives Reimbursement Codes for their New MEDIHONEY(TM) Wound & Burn Dressings

Adequate Reimbursement Through Medicare Part-B Plays a Crucial Role in the Adoption of New Technologies

PRINCETON, N.J.--(HSMN NewsFeed)--Derma Sciences (OTCBB:DSCI ), a manufacturer and marketer of advanced wound care products, today announced that the Statistical Analysis Durable Medical Equipment Regional Carrier (SADMERC) – a contracted intermediary and carrier for the Centers for Medicare & Medicaid Services (CMS) – has notified the company of its decision regarding Healthcare Common Procedure Coding System (HCPCS) codes for billing purposes for MEDIHONEYTM Calcium Alginate dressings with Active Leptospermum Honey. The awarded codes are as follows:

• A6196 Alginate or other fiber gelling dressing, wound cover, pad size 16 square inches or less, each dressing (Item # 31022)
• A6197 Alginate or other fiber gelling dressing, wound cover, pad size more than 16 square inches but less than or equal to 48 square inches, each dressing (Item # 31045)
• A6199 Alginate or other fiber gelling dressing, wound filler, per 6 inches (Item # 310212)

This will allow applicable customers to bill for MEDIHONEY Dressings using these codes, including the Medicare’s Part B program, private insurance plans and the various Medicaid programs. Medicare Part B provides coverage for ‘Surgical Dressings’ for patients at home between clinic or physician visits and when not receiving home health nursing services. It also provides wound dressings for residents in Nursing Homes not under a Medicare Part A ‘skilled care’ benefit stay who have Part B coverage. The Medicaid programs (one for each state) provide ‘Surgical Dressings’ for at home use by the beneficiary. Insurance plans often provide payment for wound dressings in addition to the coverage of care in a Nursing Home and for dressings used at home by the patient and in some cases when home health services are provided. This greatly enhances Derma Sciences’ ability to penetrate the long term care and home health markets.

Speaking of the HCPCS code award, Derma Sciences’ CEO Edward J. Quilty said, “This is a significant milestone in the launch of our MEDIHONEY line of dressings, as it will allow for the products to receive reimbursement coverage in two of our key markets – long term care and home health. Given that such codes are not needed for the acute care environment, this means that Derma can work towards market penetration in all the main areas of wound care. We launched the line last month, and sales are tracking well ahead of what we did in our launch of ALGICELLTM Ag antimicrobial silver dressings. ALGICELL Ag sales have risen consistently quarter-over-quarter, and sales reached $100 thousand last month, so the ramp-up of this product has been very strong. As such, we fully expect the launch of MEDIHONEY dressings to be even stronger, contributing to our overall performance in 2008 and beyond.”

About Derma Sciences:

Derma Sciences is a manufacturer and marketer of advanced wound care products, with operations based in the US and Canada, and sales worldwide. The company sources Active Manuka (Leptospermum scoparium) Honey from Comvita New Zealand, Ltd. Comvita controls over 70% of the flow of manuka honey, and owns several patents around the use of honey in wound dressings. The Company has also obtained FDA clearance to market and sell its MOBILITY-1™ boot and compressor device for the treatment of venous ulcers, lymphedema, and other conditions that require compression therapy. For more information about Derma Sciences, Inc., visit its home page on the Internet at http://www.dermasciences.com.

Forward-looking Statements

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Source: Derma Sciences

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