SCD Gene Therapies Present Major Challenges to State Medicaid Budgets

An updated financial analysis on gene therapy treatment for sickle cell disease (SCD), published in Blood Advances, reveals an even greater potential impact on state Medicaid budgets, which may limit access to these disease-transformative therapies.¹

In December 2023, the U.S. Food and Drug Administration (FDA) approved two gene therapy treatments for SCD that dramatically decrease and even potentially eliminate disease symptoms. However, these two therapies would have a much larger potential budgetary impact compared to previously approved gene therapy, as SCD affects roughly 100,000 individuals in the U.S. Of these, approximately half are Medicaid enrollees.

Patrick C. DeMartino, MD, MPH, is a pediatric hematologist at Oregon Health & Science University in Portland and first author on the initial and updated studies. In this and their previous analysis, Dr. DeMartino and colleagues analyzed the budgetary impact of SCD gene therapy on the Medicaid budgets of the ten states with the highest disease prevalence. Calculated costs included exagamglogene autotemcel (exa-cel; currently the lowest price FDA-approved gene therapy) in conjunction with hospitalization expenses. The model assumed that 7% of eligible patients would receive the therapy per year.^1,2

Under the updated model, the average one-year budget impact was $65.8 million per state Medicaid program. The incremental change in per-member per-​month cost — annual budget impact divided by the total state Medicaid enrollees — was $3.11 per Medicaid recipient, although this had decreased to $2.08 by year five of projected impact.¹

Notably, these estimates are higher than in the group’s original model, up 40% from the per-​member per-month cost that they estimated in their first paper. The higher estimates were the result of the launch price of exa-cel being higher than predicted and because recent epidemiologic studies have found a higher percentage of patients with severe phenotype, increasing the number qualifying for SCD gene therapy.^1,2

To put these numbers in context, Dr. DeMartino discussed the impact of the antiviral sofosbuvir for hepatitis C. Most state Medicaid programs must operate with a balanced budget, as they are partially funded by states. Sofosbuvir was unaffordable for many state Medicaid plans when it was approved by the FDA in 2013, and many programs enacted coverage restrictions, such as offering the drug only to those with severe disease, despite national guidelines. Most of these restrictions have eased more recently in response to policy reform efforts, legal efforts, and drug competition.³

Dr. DeMartino explained that although it’s not clear what will happen with SCD gene therapy, sofosbuvir generated a lower per-member per-​month cost ($1.89) than SCD gene therapy did in their model. Thus, in response to budgetary pressures, various state programs may place restrictions on who can receive gene therapy for SCD.

An inherent limitation of the study is its predictive nature. For example, the budgetary impact might be decreased somewhat by the fact that the study did not factor in replacement of gene therapy treatment for allogeneic hematopoietic cell transplantation, a treatment option available for a minority of patients. However, the predicted budget also did not account for spending related to preexisting organ damage, instead assuming a fully curative and lasting treatment, which might ultimately increase budgetary impact.¹

Dr. DeMartino pointed out that Medicaid plans may vary quite a bit from state to state in terms of qualification for SCD gene therapy coverage because of prior authorizations and specific qualification criteria.

“I suspect, given our numbers, some states would run into budgetary challenges if even a portion of the volume of patients in our model choose to pursue gene therapy,” he said. “In a subset of states, they will not need a [high percentage of SCD gene therapy] utilization to run into budgetary challenges.”

Any conflicts of interest declared by the authors can be found in the original article.

References

1. DeMartino PC, Haag MB, Caughey AB, et al. A budget impact analysis of gene therapy for sickle cell disease: an updated analysis [published online ahead of print, 2024 July 18]. Blood Adv. doi: 10.1182/bloodadvances.2024013093.
2. DeMartino P, Haag MB, Hersh AR, et al. A budget impact analysis of gene therapy for sickle cell disease: the Medicaid perspective. JAMA Pediatr. 2021;175(6):617-623.
3. Davey S, Costello K, Russo M, et al. Changes in use of hepatitis C direct-acting antivirals after access restrictions were eased by state Medicaid programs. JAMA Health Forum. 2024;5(4):e240302.