The Centers for Medicare & Medicaid Services (CMS) is piloting a program that would negotiate and administer outcome-based agreements and supplemental rebates on behalf of state Medicaid agencies
The CGT Access model will initially focus on gene therapy for sickle cell disease
On 2024年12月4日, CMS announced that it had successfully negotiated contracts with two manufacturers of FDA-approved gene therapies for sickle cell disease as part of its novel Cell and Gene Therapy (CGT) Access program.
The Cell and Gene Therapy (CGT) Access Model, announced in January of 2024, allows CMS to assist in the development and administration of outcomes-based agreements between state Medicaid entities and manufacturers of cell and gene therapies. Under the model, CMS negotiates a contract with each manufacturer. State Medicaid agencies who opt to participate in the program can sign the negotiated contract with one or both manufacturers, which includes implementing an agreed-upon standard access policy.
Through the model, CMS seeks to
- reduce Medicaid spending
- ensure payment of treatment is correlated with patient outcomes
- address Medicaid barriers to CGT access
- improve health outcomes for Medicaid beneficiaries
Gene therapies Casgevy (Vertex) and Lyfgenia (bluebird bio) for sickle cell disease are the initial focus, but CMS plans to expand the initiative to cell and gene therapies for other conditions if the pilot is successful.
Key features of the CGT Access model:
- Voluntary participation by states: state Medicaid authorities have until February to decide whether to participate. Participation guarantees agreed upon rebates for the state and specific access policies for the manufacturer
- Key Terms of Outcome-Based Agreements (OBAs) negotiated by CMS on behalf of states: contracts will include a rebate structure, standardized access policy, and CMS support in OBA implementation. States will be responsible for their share of the gene therapy cost, but at a discounted price tied to specific outcomes, as negotiated by CMS.
- Pooled purchasing power: by creating a single national negotiation framework, CMS enables Medicaid programs to leverage collective purchasing power, potentially leading to steeper discounts than states could negotiate individually.
- Administrative responsibilities for federal government: CMS will provide technical assistance for model implementation and will be responsible for monitoring, reconciling, and evaluating the financial and clinical outcomes outlined in the OBAs
- Streamlined access across states: Medicaid beneficiaries often face delays or state-to-state disparities in accessing cutting-edge treatments. The model aims to harmonize access policies across states and will support out-of-state treatment if not available in a patient’s home state
- Federal funding for program: the model earmarks funds to cover CMS’ increased responsibilities. States can also apply for supplemental funding to support administration of the program
- Funding for fertility protection: CMS intends to require manufacturers to pay for a defined scope of fertility preservation services. Potential loss of fertility is a key barrier to uptake of gene therapy for sickle cell disease and most Medicaid programs do not cover such services
CGT Access Model implementation timeline
Figure 1: The state application portal for the CGT Access Model officially opened in December 2024 and will remain open until 2025年2月28日. According to CMS, states may choose to begin participation anytime between January 2025 and January 2026.
Why is the CGT Access Model significant?
The Inflation Reduction Act of 2022 has had a huge impact on the US pharma industry. For the first time, the US government (in the form of CMS on behalf of Medicare) is engaging in price negotiating, taking a tiny bite out of the “free pricing” system that has stimulated drug development and made the US the most lucrative pharmaceutical market in the world.
Somewhat surprisingly, then, the CGT Access Model has not received much attention. While impacting a smaller number of products, in some respects the CGT Access Model is more impactful than IRA on the pricing potential of impacted products.
Why is this the case?
CGT Access model impacts prices for Medicaid from launch: in contrast, the IRA-negotiated drugs are years past their FDA approval dates (7 year for small-molecule drugs, and 11 years for biologics)
Impacts large share of potential market: Medicaid covers more beneficiaries than Medicare and is anticipated to be the primary payer for about 50% of sickle cell gene therapy recipients
More efficient than OBAs of the past: outcomes-based agreements between manufacturers and managed care have existed in the US for at least 15 years, but the piecemeal nature and administrative challenges have limited their impact. A single administrator (CMS) for the OBA means it is much more likely to be successful in tracking patients as they move across Medicaid plans and securing rebates.
Potentially larger discounts than Medicare IRA negotiations: although the details of the contracts have not yet been released to the public, materials from CMS indicate the agency plans to utilize its greater negotiation leverage to extract “multiple, layered” rebates from manufacturers, including price concessions not linked to performance.
CGT Access Model rebate structure and payment timeline
図2： The potential rebate structure for the CGT Access Model, as presented in CMS documents, demonstrates an intention to negotiate discounts not linked to product outcomes. (Source: CMS.gov)
Figure 3: Rebates for the voluntary CGT Access Model program may be paid over time, based on the rebate type.
(Source: CMS.gov)
Conclusion: The CMS CGT Access Model offers several potential benefits
Currently, the mechanism and responsibility for Medicaid access to and payment for gene therapies varies substantially between states and is in flux. This patchwork of access policies may partially explain the slower-than-expected uptake of sickle cell gene therapies. Standardized access criteria with the strength of CMS behind it is likely to support increased utilization of the therapies.
Many states have signed letters of intent indicating their interest in participating in the model; and while it remains to be seen how many states choose to adopt the outcomes-based agreements now that terms have been finalized, the model fundamentally changes the access landscape for gene therapies with a large Medicaid population by placing CMS in the role of single negotiator for a huge share of potential patients.
If implemented successfully, the CMS CGT Access Model is likely to lower net prices for gene therapies, improve access for Medicaid members, and may also promote utilization.
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