What is the new Medicaid payment model for gene therapy?

The federal government negotiates gene therapy costs with drugmakers and holds them accountable for treatment success for state Medicaid programs.

How much do gene therapies for sickle cell disease cost?

Approved gene therapies for sickle cell disease cost between $2.2 million and $3.1 million per patient, not including hospitalization.

Who is benefiting from the new gene therapy payment model?

Medicaid enrollees with sickle cell disease, a genetic condition affecting primarily Black Americans, are benefiting from this new payment model.

Home / Health / Medicaid's Bold Move: Paying for Cures, Not Just Drugs

Medicaid's Bold Move: Paying for Cures, Not Just Drugs

20 Jan

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Summary

New Medicaid payment model negotiates gene therapy costs.
Federal government holds drugmakers accountable for treatment success.
Gene therapies for sickle cell disease cost millions per patient.

Medicaid's Bold Move: Paying for Cures, Not Just Drugs

A new federal payment model allows Medicaid to cover costly gene therapies for sickle cell disease, offering a potential cure for affected patients. This initiative sees the government negotiating prices with manufacturers and ensuring accountability for treatment outcomes.

The federal government negotiates discounts and rebates from drugmakers if treatments prove unsuccessful. This contrasts with traditional payment models where bills are settled regardless of patient benefit. The gene therapies, approved in late 2023 for individuals aged 12 and older, come with a price tag of $2.2 million to $3.1 million per patient, excluding hospitalization costs.

This payment strategy, initiated under the Biden administration and continued by the Trump administration, aims to tackle high drug costs. By December 2024, 33 states, Washington D.C., and Puerto Rico had joined the program. The initiative could pave the way for similar payment arrangements for other expensive therapies, particularly for rare diseases.