New sickle cell gene therapies are a breakthrough, but solving how to pay their high prices is a struggle


New sickle cell gene therapies are a breakthrough, but prices are still too high

The approval of two gene therapies to treat sickle cell disease has given hope to patients who suffer from the debilitating disease, which overwhelmingly affects Black people and people of color.

Health officials now face a challenge in finding a way to provide equitable access to the costly treatments.

The crippling episodes of pain from the genetic blood disorder make life unpredictable for patients like Michael Goodwin. Sickle cell has forced him to leave his job and at times taken him away from his family.

“I can be in the hospital 20 days out of the month sometimes,” said the 36-year-old Goodwin. “I’ve been in hospital a lot more as I’ve gotten older, which hurts me, because I have a son now and I’m married.”

Still, he’s hesitant to try the new one-time gene therapies because they require months of intensive medical preparation, including chemotherapy, to prepare patients’ bone marrow stem cells for extraction and gene editing.

Goodwin also worries about the cost. Vertex Pharmaceuticals‘ gene therapy Casgevy lists for $2.2 million, while Bluebird Bio‘s treatment Lyfgenia lists for $3.1 million.

“I do have insurance, but … I already have medical bills,” he said.

The therapies were cheered as a long-awaited breakthrough to treat the disease when they were approved in December. But the hurdles toward ensuring equitable access, and the lack of infrastructure in place to administer the nascent treatments, have raised questions about just how many people will benefit from them.

Blood sample of patient positive tested for sickle cell.

Kitsawet Saethao | Istock | Getty Images

Goodwin’s hesitancy to pursue treatment is no surprise to Dr. Julie Kanter, director of the Adult Sickle Clinic at the University of Alabama at Birmingham.

“My guess is even if we opened the gates today to everybody getting this therapy, at most only 10% of those individuals affected by sickle cell would want this therapy,” said Kanter, who also serves as the president of the National Alliance of Sickle Cell Centers. “And even that would be too much for us to manage right this second.”

More than 100,000 Americans have sickle cell disease, according to Centers for Disease Control and Prevention estimates, and between 50% and 60% of them covered are covered by the federal and state insurance program Medicaid.

Kanter said it will take time to ramp up capacity and to set up facilities across the country to treat patients at scale.

“We really hope that having the National Alliance of Sickle Cell Centers will allow us to strengthen our centers to generally care better for people living with this disease, which we haven’t been able to do before because the cost is a problem,” she said.

High cost brings a new payment model

As they figure out how to ramp up treatment capacity, state and federal officials are grappling with how to provide access to the costly new treatments for the thousands of patients covered by the Medicaid safety net program.

“It’s giving us an opportunity to respond to folks with medical conditions for which there have not been very satisfying treatments. But I think the immediate consideration is the cost is very high. And state budgets simply cannot manage that on their own,” said Kate McEvoy, executive director of the National Association of Medicaid Directors.

A University of Washington analysis found that at a price of $2 million or less, the one-time gene therapy treatments would provide an acceptable value, offsetting the lifetime medical and quality-of-life costs for acute sickle cell patients. Many who suffer from the disease require multiple hospitalizations and blood transfusions, which can leave them unable to work.

But the researchers concluded that a lower price closer to $1 million would help ensure greater access.

The Biden administration is launching negotiations in the coming weeks with Vertex and Bluebird Bio to obtain discounts for state Medicaid plans, with payments linked to patient health outcomes. It is part of the Centers for Medicare & Medicaid Services’ Cell and Gene Therapy Access Model, which aims to make new high-priced treatments easier to obtain. Approval of the sickle cell treatments prompted the administration to begin implementing the new payment demonstration program one year early, starting in January 2025.

“There are probably about 100 therapies in the pipeline at the FDA in an advanced stage of application … so this is a real-time priority in terms of developing strategies that are going to undergird Medicaid programs capacity to cover the treatments,” said McEvoy.

The direct talks with the sickle cell drugmakers come as large pharmaceutical firms like Merck, Eli Lilly and others are suing the Biden administration over the Inflation Reduction Act Medicare price negotiations, which got underway in February. Those talks could see sharply lower price offers on the first 10 drugs selected for negotiation.

But on Vertex’s quarterly earnings call this month, executives expressed confidence about the negotiation process in this case. They said discussions with individual state Medicaid agencies will help ensure wide access and address long-standing inequities of care in the sickle cell disease community.

“We’re not waiting for the demo before we secure access for patients who are covered by Medicaid,” Steve Arbuckle, Vertex executive vice president and chief operating officer, told analysts. “If you look at the profile of Casgevy, it is so incredibly strong that really we’re talking about an outcomes-based agreement which is looking at whether a very, very small number of patients may not respond.”

Employers are taking note

Private employer health plans are also grappling with how to pay for an increasing number of novel treatments with seven-figure price tags, said Morgan Health CEO Dan Mendelson, whose firm focuses on workplace health programs.

“Many employers look at cell and gene therapies, see the costs, and are carving them out of their benefits. They know the therapies are valuable,” Mendelson said. But for smaller companies, “one case could exceed the cost of insuring an entire population in the course of a year and the employer doesn’t even know if the employee is going to stick around.”

Morgan Health is exploring new risk-sharing payment models that could help small- and medium-sized businesses cover the rising costs of specialty treatments coming onto the market.

Goodwin is covered under his wife’s employer health insurance. He hasn’t explored what kind of coverage her plan will provide for the new sickle cell treatments, because he’s still not sure whether they’re right for him.

“If they could guarantee me the outcome — that I wouldn’t have sickle cell … I would do it in a heartbeat. In a heartbeat,” he said.

In addition to discussions over payments, Vertex and Bluebird Bio are taking steps to educate doctors and patient communities about the benefits of their new treatments.

Vertex expects its first commercial patient to begin treatment in the coming weeks. Bluebird said it anticipated its first patient would start Lyfgenia in the first quarter.

This article was originally published on CNBC