Avalere Analyst Lists the Challenges Medicaid Plans Must Overcome When Deciding to Use Cell and Gene Therapies

Megan Olsen, MPH, principal at Avalere, explores the challenges that arise for Medicaid plans when providers choose to prescribe a cell or gene therapy.

Transcript

What challenges do Medicaid plans need to overcome when choosing to provide gene and cell therapies and what has CMS done to address them?

Yeah, that's a good question. The cell and gene therapy space is very interesting when you think about it through a Medicaid lens. On one hand, with a lot of these gene therapies in particular that treat rare pediatric conditions, you're going to have a lot of Medicaid patients. So, Medicaid is going to be acutely impacted on a population basis, given they enroll a lot of children. They cover a lot of children.

On the other hand, states are also more limited in the types of innovative arrangements that they can enter or the resources that they have to dedicate to these treatments. States have fixed budgets, they need to balance their budgets annually, so there are some some limitations there. We've seen some interest of merge among states and we've been doing a lot of tracking of how states are adapting to this early wave of cell and gene therapies relative to what's coming down the pipeline and how they might need to adjust going forward. But one of the early indicators is that we've seen over the past couple of years growing state interest in value-based contracting arrangements and getting state plan amendment approval from CMS. It's not something that's been applied as much in the cell and gene therapy space yet today but I think as more products enter the market, there will likely be growing interest in new ways for states to pay for these types of treatments.

We've also seen states think about how to develop coverage policies around these therapies and one of the things that that we've highlighted is that, in many cases, some states have been slow or not developing transparent health coverage policies for these treatments, and are rather leaving it up to medical director decision in reviewing on a one-off basis for medical necessity.

More broadly, there is a conversation emerging at the federal level around what is the best way to cover and finance cell and gene therapies in the Medicaid program, and we saw [the Medicaid and CHIP Payment and Access Commission] recently and on an ongoing basis, they're continuing to explore new ways to cover and finance cell and gene therapies in particular, potentially through a new federal benefit that carves out cell and gene therapies from the Medicaid drug rebate program and applies differential coverage and rebate structures to it. So, I think that is in the early stages of discussion, but I think that underscores the point that there is a lot of thinking and a lot of work to be done as it relates to cell and gene therapies in the Medicaid market moving forward.