Stay informed

Drop us your email and we’ll keep you up-to-date on Medicaid issues.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Blog Post ·

Cell and Gene Therapies: Excitement tempered by reality

New therapies are opening doors to healing for thousands, but they come with their own unique challenges for Medicaid programs and members

To us non-clinicians, it feels a bit like the stuff of sci-fi movies, but it is both real and reflects dreams come true.

Emerging cell and gene therapies (CGT) are providing important new opportunities to improve the health, life expectancy and well-being of people who have long struggled with conditions for which there have been limited medical options. An important, non-exclusive example of a CGT that has already been approved by the Food & Drug Administration (FDA) is a potentially curative cell-based gene therapy for people age 12 and older who have sickle cell disease.

Sickle cell is a genetic, inherited disease that is caused by alteration in one of the genes in the red blood cell. This CGT breakthrough is great news from a clinical standpoint as sickle cell is debilitating, frequently associated with major health effects (severe pain, acute chest syndrome, greater likelihood of stroke, kidney disease, and premature mortality), and seriously impacts the quality of people’s lives. Since sickle cell disproportionately affects Black individuals, so meeting their needs with this treatment also represents an important new means of addressing longstanding disparities.

We are now poised to help folks who have battled recurring episodes of debilitating pain, been diverted from attending school and work, and forced to argue for medication in an environment that is explicably wary of addiction, to be free of the unrelenting burden of the disease. This is everything we could hope for in American science and ingenuity, and an unqualifiedly positive development.

But that’s not the end of the story.

New therapies, new challenges

While we would all love to immediately address the needs of each person across the country who has sickle cell disease, only a small fraction of the people who could benefit from this treatment are likely to be privately insured for it or to able to cover its high costs out-of-pocket. And Medicaid, which covers over 50,000 people nationwide who have the condition, faces several significant obstacles to providing these therapies. These include:

  • an extremely limited supply of medical centers and gene editing facilities meaning we will initially have the capacity to serve tens of people not thousands;
  • enormous up-front costs – one treatment is estimated to cost $2.2 million and the other, $3.2 million – that states and territories have not currently budgeted for and cannot manage on their own; and
  • the complex task of developing clinical coverage policies as well as enrolling the providers who will offer the treatment.

What’s the bottom line?  We have to embrace the now of the sickle cell CGT as well as the approximately 100 other CGT treatments that are currently in the pipeline with the FDA.

And, we have to help states to cover the costs.

A profile of the population 

Until recently, we have had only dated information on the incidence of people with sickle cell who are covered by Medicaid. An analysis released by NORC at the University of Chicago in December 2023, however, provides important new detail. Specifically, NORC used the latest available national Transformed Medicaid Statistical Information System (T-MSIS) data to identify 52,524 Medicaid enrollees with sickle cell disease and to document that:

  • People suffering from the condition are predominantly Black (67 percent), age 21-45 (39 percent) and the highest incidences, per capita, live in Southern/Mid-Atlantic states.
  • 49 percent of Medicaid members with sickle cell have both a clinical trial-eligible genotype and a severe form of the condition (defined as four or more vaso-occlusive crises in a 24-month period).
  • Mississippi, Georgia and the District of Columbia have the highest prevalence of Medicaid members with the condition, as a percentage of the total Medicaid population.
  • New York, Florida, Georgia, Texas and California have the highest absolute numbers of Medicaid members with sickle cell.

The challenges for Medicaid programs

Medicaid is a significant payer of services for people with sickle cell disease, covering more than half of hospitalization and emergency department costs as well as pharmacy. Federal law generally requires Medicaid programs to cover FDA-approved medications/treatments consistent with their medically accepted indications, but reserves latitude on utilization management standards for coverage. Medicaid faces a number of serious challenges in operationalizing sickle cell CGT:

  1. Capacity constraints. The limited number of medical centers and gene editing facilities that will be available will likely mean that only a very small number of people (tens as compared to the thousands who are potentially in need of the treatment) will be able to be served until capacity scales up.
  2. Huge costs. The enormous up-front costs of paying for the treatment, especially in context of this occurring, for many states, mid-stream in two-year budget cycles, at a time when many states are facing financial uncertainty related to declining tax revenues and sunset of the federal pandemic financial assistance, and in context of a federal prohibition on retroactively revising Medicaid managed care contract risk sharing mechanisms after the start of a rating period. Medicaid MCO arrangements are the predominant model through which Medicaid services are delivered across the country.
  3. Complexities associated with implementing the treatment. The clinical and administrative complexity of developing coverage policies through standing Pharmaceutical and Therapeutics (P&T) or Drug Utilization Review (DUR), including:
  • identifying the Medicaid members for whom this is a best fit given that some may choose to continue current treatment (hydroxyurea), the nature of the treatment (recipients must live at a treating hospital for 1-3 months and will likely require multiple follow up visits and ongoing monitoring) and potential complications (e.g. risk of developing tumors, infertility);
  • addressing cost and transparency implications, under:
    • Medicaid Drug Rebate Program rulemaking that has been proposed by CMS; and
    • in states that have instituted a pharmacy affordability board and/or strategies such as Upper Payment Limits (UPLs); and
  • challenges associated with enrolling and paying out-of-state providers – a likely scenario given the limited number of treatment centers).

How the federal government can help

States have urgent need for help from the federal government in managing the cost of coverage. While NAMD does not have a formal association position on this issue, a number of our member states have responded with interest to the new Center for Medicare and Medicaid Innovation Cell and Gene Therapy Access Model. Effective Jan. 1, 2025, the model would enable states to designate the federal government as their representative to negotiate CGT outcomes-based payment arrangements. This is a potentially helpful means of improving the bargaining position of individual Medicaid programs.

That said, we should continue other strategies that could defray state costs, many of which would require action by Congress. Some options include, but are not limited to:

  • enhancing federal Medicaid match specifically for this purpose;
  • mandating additional rebates under the Medicaid Drug Rebate Program;
  • developing risk corridors or reinsurance approaches;
  • creating a stand-alone coverage group for people with sickle cell disease, with enhanced federal match; and/or
  • developing a distinct program as we have done for coverage of HIV/AIDS drugs under the Ryan White program.

Related resources

Stay Informed

Drop us your email and we’ll keep you up-to-date on Medicaid issues.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.