Blue Cross Blue Shield Association Includes PhotoMedex XTRAC(R) Laser System in National Reference Policy.

MONTGOMERYVILLE, Pa. -- PhotoMedex (Nasdaq: PHMD) today announced that the Blue Cross Blue Shield Association (BCBSA) has revised the portion of its National Reference Policy that includes the PhotoMedex([R]) XTRAC([R]) Laser System's treatment of psoriasis. The Policy now states that the XTRAC Laser may be considered medically necessary for the treatment of mild to moderate psoriasis that is unresponsive to conservative treatment, and further states that the XTRAC laser may be considered medically necessary for the treatment of moderate to severe psoriasis comprising less than 20% body area.

BCBSA is the trade association for the 39 independently owned and operated Blue Cross and Blue Shield Plans and their subsidiaries. While each of the Plans is a separate company that makes its own coverage decisions, the national reference policies are made available to these Plans as an aid to assist in their medical policy development.

Jeff O'Donnell, PhotoMedex' CEO, commented, "This is a very significant development for the XTRAC Laser System. As a result of the issuance of this national reference policy, we expect that the remaining Blue Cross and Blue Shield Plans will be reassessing their policies over the next several weeks and months. We have already learned that Blue Cross Blue Shield of Kansas City has issued a revised favorable policy and we have been informed that other Plans including those covering Illinois, Texas, New Mexico and Oklahoma, will be reviewing their policies within the next 60 days."

Continuing, O'Donnell added, "The XTRAC provides clinically efficacious results for a disease that afflicts millions around the world. In the United States it is critical that insurance companies weigh the benefits of the therapies they cover before establishing a coverage policy. The BCBSA conducts a rigorous clinical review before adopting a national reference policy. PhotoMedex invested heavily in both time and cost, ensuring that it met and documented the high standards that establish the XTRAC as a medically necessary therapy for the treatment of psoriasis. We also have a large investment in the quality of the XTRAC, which is reviewed annually under ISO 13485: 2003 by our third-party auditor. We believe these investments are well made and are excited about the additional opportunities that will become available as a result of policies issued, based on the revised national reference policy. Our expanded sales and clinical organizations are anxious to see these new territories added to our broadening XTRAC base and revenues."

About PhotoMedex:

PhotoMedex provides contract medical procedures to hospitals, surgi-centers and doctors' offices, offering a wide range of products and services across multiple specialty areas, including dermatology, urology, gynecology, orthopedics, and other surgical specialties. The Company is a leader in the development, manufacturing and marketing of medical laser products and services.

Some portions of this release, particularly those describing PhotoMedex' strategies contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1993, as amended and Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. While PhotoMedex is working to achieve those goals, actual results could differ materially from those projected in the forward-looking statements as a result of a number of factors, including difficulties in marketing its products and services, need for capital, competition from other companies and other factors, any of which could have an adverse effect on the business plans of PhotoMedex, its reputation in the industry or its results. In light of significant uncertainties inherent in forward-looking statements included herein, the inclusion of such statements should not be regarded as a representation by PhotoMedex or its subsidiaries that the forward-looking statements will be achieved.