Deshawn “DJ” Chow is one of just over 100 sickle cell patients who have undergone treatment with new gene therapies.
CVS Health CEO David Joyner said private insurers and employer-sponsored health plans are looking at how to create a new risk pool arrangement to help manage the costs of the therapies.
The Biden administration introduced a new federal payment model to help state Medicaid programs afford the gene therapies, but Medicaid is now facing federal funding cuts in Washington.
Starting in his early teens, Deshawn “DJ” Chow wasn’t sure he’d ever be able to live a normal life. Crushing pain episodes brought on by his sickle cell disease were getting progressively worse.
“It’s just been hard skipping school and always being in and out of the hospital,” the 19-year-old said. “And just severe pain in … my head and my lower back.”
When new sickle cell gene therapies were approved by the Food and Drug Administration just over a year ago, Chow’s adopted parents sought out City of Hope Children’s Cancer Center in Los Angeles to get him access to the new treatment. To their relief, the center accepted him as patient, and quickly secured authorization from the Chows’ employer-sponsored insurance.
“They’re covering pretty much all of this [at] almost no cost out of pocket for us. So, we’re really grateful for those benefits,” said DJ’s dad, Sean Chow. “I’m amazed.”
DJ Chow is one of a handful of the hospital’s patients who have been treated with Casgevy, the sickle gene therapy produced by Vertex Pharmaceuticals, which costs more than $2 million per patient. The treatment process involved multiple hospitalizations as well as chemotherapy treatments at additional cost over the course of the past year.
Sickle cell is a blood disorder in which a person’s red blood cells become misshapen into crescent moons. It disproportionately affects Black people and causes severe pain episodes that can frequently land patients in the hospital.
Chow is one of small number of patients to complete treatment with new gene therapies. After completing the full course of Casgevy treatments in January, he is starting to let himself dream about doing the things he’s always wanted to do.
“Learn how to snowboard and surf and do all these things … experiences I never really got to do because of my sickle cell,” he said.
Slow ramp up
While more than 100,000 Americans suffer from sickle cell disease, younger patients whose organs have not been damaged by the disease are the most promising candidates to benefit from the new treatments.
Still, the ramp up of capacity to treat patients at scale has been slow. In the first year since two gene therapies for sickle cell were approved by the FDA, just over 100 patients have undergone treatment.
Vertex executives said on the company’s fourth quarter earnings call that 50 patients globally had received their first cell collections by the end of last year 2024. Meanwhile, executives at competitor Bluebird Bio said last fall that nearly five dozen patients had undergone treatment with its drug Lyfgenia, which is priced at more than $3 million per patient. Another 37 patients are slated to begin treatment with Bluebird’s therapy by early 2025.
For the first treatment centers to offer the new sickle gene therapies, coordinating with insurers on obtaining coverage has required a bit of learning curve.
“It is much smoother today than it was when we first started getting patients in,” said Jennifer Cameron, executive director of patient access at Children’s National Hospital, in Washington, D.C. “Many times, we’ll send them the billing and coding guides that are developed by the … manufacturer and we share that with the payer, if they don’t know about it.”
City of Hope’s Dr. Leo Wang, the pediatric hematologist-oncologist who works with Chow, also said the process has gotten smoother, but he worries that the price of these treatments still poses hurdles for coverage.
“The challenges for the health care system are immense. This is a very expensive therapy,” he said, “For employer-based insurance plans it may be a little bit difficult to accommodate those costs.”
So far, the slow ramp up of patients in treatment has made coverage of early cases manageable, said David Joyner, CEO of CVS Health, the parent company of health insurer Aetna. But with demand expected to ramp up, he said many in the industry are looking at developing new payment models for the sickle cell treatments and other gene therapies on the horizon.
“There are emerging risk pools being developed … sometimes at the state Medicaid levels, and sometimes collectively across larger payers,” Joyner explained, so that the financial burden of the treatments is spread beyond just one state or one company.
“You have to think about a different payment model, because today’s payment model is not constructed to spread the cost,” he said. “But that takes time.”
A challenge for Medicaid
For state Medicaid programs, the challenge of affordability for the new sickle cell treatments may be even greater. More than half of sickle cell patients are covered under the federal-state government health plan for low-income Americans.
Southern states like Georgia, Florida and Mississippi have some the largest concentrations of sickle cell patients, according to a study by researchers at the University of Chicago.
The Biden administration developed a Cell and Gene Therapy payment model under the Centers for Medicare and Medicaid, which will provide states with an outcomes-based discounted price and provide some funding for the new drugs. The deadline for states to apply for the program is Feb. 28, with the first federal grants to help pay for the drugs on track to begin in June, according to CMS officials.
Under the new payment model, states could receive up to $9.5 million in federal funding, but even with discounted prices that may not begin to cover the costs of treating Medicaid patients in some cases.
Researchers at Oregon Health & Science University calculated that the 10 states with the largest sickle cell populations could see a mean budget impact of $30 million, based on an estimate of treatments priced at just under $1.9 million.
Those increased costs would come at a time when the Trump administration and the Republican-controlled Congress are looking for ways to cut federal spending. The administration has already begun to cut staffing at health agencies, and federal funding for state Medicaid programs is expected to be on the table in upcoming budget proposals.
Health and Human Services Secretary Robert F. Kennedy Jr. said during his confirmation hearings last month that he is committed to maintaining staffing to provide coordination of sickle cell coverage across the department and other agencies, without specifically discussing funding for the new gene therapies or Medicaid overall.
“I have many friends who have sickle cell. I’ve seen the suffering they endure,” Kennedy said. “There are now promising gene therapies. They are very, very expensive, but it’s something that [National Institutes of Health] should be enthusiastically supporting — that kind of research.”
Sean Chow said he is grateful to the researchers who developed the gene therapy, which he hopes will allow his son to have a more normal future, without debilitating episodes of pain. He wants other families to have the same opportunity to access the high-priced gene therapies for their loved ones.
“Having a child with sickle cell has been heartbreaking,” he said. “I’m hoping as more and more patients get the therapy, the cost can be driven down.” More
