Summary
The Trump administration is aiming to change that with a new program within Medicaid, the federal-state insurer for low-income people that covers about half of the 100,000 people in the U.S. with sickle cell disease. The program, launched this year, helps states negotiate payments for the treatments based on patient outcomes and whether the therapies deliver the promised cure. If the treatments fail, the 33 states that have signed up will receive discounts and rebates from the drug manufacturers.
The first-of-its-kind model — “a historic step in the fight against sickle cell disease,” in the words of Centers for Medicare and Medicaid Services Administrator Mehmet Oz — was first spearheaded by the Biden administration and launched through CMS’s Innovation Center this year.
Doctors and policy experts say it’s a promising attempt at making it easier for state Medicaid programs to pay for costly sickle cell treatments. But they also worry the model’s potential is limited given existing barriers to delivering these types of new-age, innovative treatments to the people who need them the most — namely a lack of health care facilities across the U.S. that have the financial, administrative and structural capacity to provide such complex care.
The therapies must be provided at authorized treatment centers — specialized and highly regulated facilities that are specifically chosen and trained by the drugmakers to ensure they can administer the treatments safely. People living in metropolitan areas, like Boston and Los Angeles, might have multiple treatment centers to choose from; but in rural areas, access to the facilities is sparse.
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About a quarter of people living in rural areas are enrolled in Medicaid. For Medicaid programs, approving care for a patient in another state can be a long and complex process that can lead to lengthy delays, doctors said.
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The treatments, Casgevy, from Boston’s Vertex Pharmaceuticals and Switzerland’s CRISPR Therapeutics, and Lyfgenia, from Boston’s Genetix Biotherapeutics of Boston, cost $2.2 million and $3.1 million, respectively, and have not been routinely covered in Medicaid since their approval two years ago.
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State Medicaid officials say they want to make the lifesaving treatments more accessible, but cost is a major barrier, even with the promising new federal payment model.
Many states have faced massive budget deficits this year, and pharmacy spend has been a key year-over-year driver of Medicaid costs. Looking at the pipeline of hundreds of cell and gene therapies being developed — which treat a range of diseases beyond sickle cell, including rare cancers and blood disorders — state officials and economists say that new, innovative approaches to paying for the treatments will be necessary to manage the cost burden.
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The rapid development and approval of the treatments for a range of diseases threatens to cripple state budgets at a time when federal funding for the health insurance program is in flux — Trump signed off on a megabill over the summer that will result in nearly $1 trillion in health care cuts, most of which will come from Medicaid.
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The new payment model offers help from the federal government to negotiate contracts for sickle cell treatment with drugmakers, which could ease some of the burden on participating states.
“The fact that 35 states decided to join the model after reviewing the agreements CMS negotiated with each of the drug manufacturers indicates that these agreements, in their totality, were preferable to states than what they were able to negotiate on their own,” said a CMS spokesperson in a statement. Thirty-three states have signed up for the model, in addition to Washington, D.C., and Puerto Rico. More than 80 percent of Medicaid enrollees with sickle cell disease live in the participating states, according to CMS.
Still, such outcomes-based models are new, and it’s not clear whether they actually save payers money in the long run, even if they ease the burden on states in negotiating individual payment agreements, said David Ridley, a health economist at Duke University’s Fuqua School of Business.
“I can see [the model] being appealing to the public. From an economic perspective, it doesn’t make that much difference,” said Ridley, who suspects the model will lead to states paying the same amount for the treatments in the long-term.