Under the agreement, participating states will receive "discounts and rebates" from the drugmakers if the treatments don't work as promised, according to the Centers for Medicare & Medicaid Services, or CMS.
That's a stark difference from how Medicaid and other health plans typically pay for drugs and therapies — the bill usually gets paid regardless of the treatments' benefits for patients. But CMS has not disclosed the full terms of the contract, including how much the drug companies will repay if the therapy doesn't work.
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The treatment Cole received offers a potential cure for many of the 100,000 primarily Black Americans with sickle cell disease, which is estimated to shorten lifespans by more than two decades. But the treatment's cost presents a steep financial challenge for Medicaid, the joint state-federal government insurer for people with low incomes or disabilities. Medicaid covers roughly half of Americans with the condition.
There are two gene therapies approved by the Food and Drug Administration on the market, one costing $2.2 million per patient and the other $3.1 million, with neither cost including the expense of the required long hospital stay.
The CMS program is one of the rare health initiatives started under former President Joe Biden and continued during the Trump administration. The Biden administration signed the deal with the two manufacturers, Vertex Pharmaceuticals and Bluebird Bio, in December 2024, opening the door for states to join voluntarily.
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The gene therapies, approved in December 2023 for people 12 or older with sickle cell disease, offer a chance to live without pain and complications, which can include strokes and organ damage, and avoid hospitalizations, emergency room visits, and other costly care. The Biden administration estimated that sickle cell care already costs the health system almost $3 billion a year.
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Clinical trials for the gene therapies included fewer than 100 patients and followed them for only two years, leaving some state Medicaid officials eager for reassurance they were getting a good deal.
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"What we care about is whether services actually improve health," said Djinge Lindsay, chief medical officer for the Maryland Department of Health, which runs the state's Medicaid program. Maryland is expected to begin accepting patients for the new sickle cell program this month.
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Before gene therapy, the only potential cure for sickle cell patients was a bone marrow transplant — an option available only to those who could find a suitable donor, about 25% of patients, Ivy said. For others, lifelong management includes medications to reduce the disease's effects and manage pain, as well as blood transfusions.