Questions Remain about CMS’s Plan for Gene Therapy Access in Medicaid

Over the last decade, industry-sponsored cell and gene therapy trials have more than tripled, according to a recent report for the IQVIA Institute for Human Data Science. These new therapies, however, come with a high cost, as much as $3.1 million for a recently approved gene therapy for sickle cell disease.

In response, the Center for Medicare and Medicaid Innovation — part of the Centers for Medicare and Medicaid Services that develops alternative payment models — has begun a new program to address state Medicaid programs’ access to gene therapies, beginning with the first two therapies approved to treat patients with sickle cell.

The Cell and Gene Therapy Access Model is a voluntary model for states and manufacturers where CMS will negotiate outcomes-based agreements with manufacturers. This process begins in the spring 2024, and states can choose to participate in the program beginning between January 2025 and January 2026.

CMS and pharmaceutical manufacturers will negotiate a set of key terms, which would include pricing, including rebates, and outcome measures that would form the basis for individual contracts. CMS will provide support through technical assistance and funding to participating states.

Kolton Gustafson

“The model sounds like they may be trying to negotiate a lower price for these products more generally,” Kolton Gustafson, associate principal, policy practice at Avalere, said in an interview. “Mentioned in the proposal is some level of rebates associated with the clinical outcomes of patients that are treated with the product. That element of the rebate is something that would be paid out over time, presumably, based on whichever measures they select for the model.”

Gustafson said CMS may also be looking for volume discounts. “It sounds like the outcomes-based agreement element is the primary objective but with a lower price overall as a starting point,” he said.

Related: FDA Approves Two Gene Therapies for Sickle Cell Disease

The CMS model initially focuses on access to the two sickle cell gene therapies approved in December — Vertex Pharmaceuticals’ Casgevy (exagamglogene autotemcel) at a cost of $2.2 million and Bluebird bio’s Lyfgenia (lovotibeglogene autotemcel) at a cost of $3.1 million. Sickle cell affects more than 100,000 people in the United States. CMS indicates that 50% to 60% of people with sickle cell disease are enrolled in Medicaid.

Gustafson said not a lot of specific details have been released to determine how successful CMS’ gene and cell therapy program could be. “We don’t have a clear indication yet of whether the manufacturers of those treatments intend to participate, but I foresee that they will at least enter the discussion.”

He also said that states that have a high Medicaid population may have just as much leverage in negotiations because of their volume advantage. California has the highest number of Medicaid-enrolled people: with 12.7 million people enrolled; New York is the state with the second highest Medicare enrollment: 6.8 million people.

There is also not a lot of clarity on what CMS means by states having a standard access policy. “They’ve alluded to it impacting things like utilization management and eligibility for treatment, but we don't have a lot of clarity about just how much participation in the program would ensure that patients in these states are able to access treatment,” Gustafson said.

CMS had indicated when they launched this gene and cell therapy model that they might expand to other gene therapies in the future. More gene therapies are on the horizon. IQVIA expects that 55 to 65 cell-, gene- and RNA-based therapies will launch globally by 2027, and U.S. spending on such therapies could rise to $12 billion by then.

In 2024 so far, the FDA approved a second indication for Casgevy to treat transfusion-dependent beta thalassemia, a blood disorder, in patients 12 years and older. Regulators are reviewing several other gene therapies including Kresladi (marnetegragene autotemcel) to treat the rare, autosomal recessive pediatric disease leukocyte adhesion deficiency. A decision is expected by June 30, 2024.

Gustafson said that would likely depend on the volume of patients receiving care through the Medicaid programs. Many of the gene therapies are for rare diseases with small patient populations.

Related: State Medicaid Programs Look to Value-Based Contracts for Gene Therapies

In 2020, CMS proposed a rule change to create flexibility for value-based contracting in Medicaid, specifically addressing the “Medicaid Best Price” rule. The flexibility in rules has allowed for new solutions such as CMS’ cell and gene therapy program.

It’s also allowed for commercial companies to provide states with solutions in this area. One such solution is Magellan Rx Management’s Value Plus, which is designed specifically for value-based contracting in the Medicaid fee-for-service market. Magellan Rx Management teamed up with Coeus HealthCare to help administer the value-based contracts through the Coebra Platform.