Medicaid Preps for Glut of Expensive New Gene Therapies

February 22, 2023

Patients, providers, and payers alike are anticipating the release of new gene therapies for conditions like cancer and sickle cell disease. The US Centers for Medicare and Medicaid Services (CMS) released an experimental outcomes-based payment model to help manage the high prices of these therapies. Payouts would be based on patient outcomes, like symptom reduction or remission.

According to Ned Pagliarulo, “Under the gene therapy model, state Medicaid agencies could delegate authority to CMS to coordinate multistate frameworks to pay for gene therapies based on how much patients benefit from treatment. In sickle cell, for example, payment could be contingent on whether patients remain free of the pain crises they regularly experience. These types of payment schemes, typically known as outcomes-based arrangements, are already used in some cases for the currently available gene therapies. But budget limitations and federal price reporting requirements have limited their use within Medicaid, indirectly shaping how they’re designed for private insurers, too.”

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