CMS’s Cell and Gene Therapy (CGT) Access Model: Implications of Outcome-based Payment Models for Pharmaceuticals
CMS’s Cell and Gene Therapy (CGT) Access Model: Implications of Outcome-based Payment Models for Pharmaceuticals
Article written by Noah Blase and Steven Lin, Windrose Consulting Group
Situation
The recent FDA approval of two groundbreaking gene therapies for sickle cell disease —Casgevy and Lyfgenia—marks a significant milestone in the field, offering life-changing treatments for patients suffering from this debilitating genetic disorder. These developments also raise crucial considerations for equitable patient access, as gene therapy manufacturers must navigate complex regulatory pathways, pricing & reimbursement challenges, and distribution logistics. The introduction of the Cell and Gene Therapy (CGT) Access Model by the Centers for Medicare & Medicaid Services (CMS) may address some of these access concerns, especially with the implementation of outcome-based agreements (OBAs).
Background
Gene therapy has been at the forefront of research and development for decades, with the promise of treating genetic disorders at their root cause. The recent approvals and future pipeline products may transform the landscape of many serious diseases, promising long-term benefits and potentially curative outcomes. However, the journey from laboratory bench to bedside administration is accompanied by many challenges, particularly in setting viable pricing models that reflect the value of one-time treatments and securing reimbursement strategies that ensure access while maintaining financial sustainability.
Fig 1: Notable Current and Upcoming Cell and Gene Therapies (expected US launch date)
To address these challenges, CMS has introduced the CGT Access Model: a voluntary framework that aims to determine whether a CMS-led approach to developing and administering OBAs for cell and gene therapies can improve Medicaid beneficiaries’ access to innovative treatments, enhance health outcomes, and reduce healthcare costs and burdens on state Medicaid programs.
Key Features of the CGT Access Model [1,2]:
Innovative Payment Models: The CGT model introduces an innovative payment arrangement that links reimbursement to patient outcomes (Outcome-Based Agreement, OBA), ensuring that payments reflect the real-world effectiveness of the therapy. Payments can be distributed over several years and adjusted based on the patient’s health outcomes.
Streamlined Reimbursement Process: The new model includes a pre-negotiated, standardized reimbursement framework across states, addressing discrepancies in Medicaid coverage, facilitating quicker access to approved therapies and reducing delays in patient access.
Negotiated Medicaid Agreements: CMS and manufacturers negotiate key terms of the agreements, including pricing and specific outcome measures, forming the basis for individual contracts between manufacturers and participating states. State Medicaid agencies decide whether to sign the negotiated contract which obliges manufacturers to provide states with supplemental rebates.
Technical Support: CMS will provide support through technical assistance and funding to participating states, helping cover the costs of participation, including provider requirements and necessary data collection.
Collaboration Across Stakeholders: The CGT model fosters collaboration between CMS, manufacturers, healthcare providers, and patients. Manufacturers are encouraged to work closely with CMS and other stakeholders to ensure the successful implementation of the model, with the objective of building trust and aligning the interests of all parties involved in the delivery of gene and cell therapies.
Windrose's take
The recent and upcoming approvals of gene therapies, along with the launch of the CMS's CGT Access Model, mark a pivotal moment in the gene therapy landscape. These advancements offer promising treatments for diseases with high unmet needs while also introducing a complex array of market access opportunities and challenges for manufacturers.
The CGT model’s emphasis on OBAs aligns well with the high upfront costs and long-term benefits of gene therapies. By tying reimbursement to patient outcomes, the model ensures manufacturers are rewarded for delivering transformative treatments. This approach encourages accountability and aligns costs with actual benefits realized by patients, promoting a sustainable business model for high-cost therapies. As such, manufacturers should consider investing in infrastructures that promote robust data collection and analyses to demonstrate the real-world impact of their therapies, as tracking patient outcomes over time provides key evidence of the therapy’s long-term effectiveness as an essential component for OBAs.
The streamlined reimbursement process and enhanced collaboration with stakeholders are also positive steps forward. By reducing administrative burdens and fostering a collaborative environment, the CGT model helps ensure patients receive timely and equitable access to life-saving therapies. Manufacturers should engage early with payers and policymakers to establish unmet needs and create compelling value propositions. Active involvement in these discussions can help manufacturers anticipate and adapt to evolving regulatory and payer expectations.
Additionally, investing in patient support programs and educating healthcare providers about the unique aspects of gene therapies will be crucial. Manufacturers should underscore the critical unmet needs in the disease areas and the value of innovative gene therapies to highlight their transformative potential. This proactive engagement helps build trust and ensures effective delivery and uptake. Manufacturers that adopt a proactive, patient-centric approach and leverage the opportunities presented by the innovative contracting mechanisms will be best positioned to succeed in this evolving landscape.
With continued innovation and collaboration, gene therapies will inevitably transform the current healthcare payment models. The CMS's CGT Access framework represents a critical step in realizing this potential, paving the way for a more accessible and sustainable future for gene therapy. The successful implementation of the CGT Access Model by Medicaid will likely set a precedent for other programs, such as Medicare and commercial plans, to adopt similar frameworks. Beyond OBAs, there are alternative reimbursement pathways such as warranty models and subscription-based models which include a fixed fee for unlimited access to certain therapies, and manufacturers should strategically explore these options that best suit their situation. This will require manufacturers to navigate the available contracting options and determine the best approach to achieve broad patient access, while maintaining long-term partnerships that guarantee financial sustainability with payers.
CMS’s Cell and Gene Therapy (CGT) Access Model: Implications of Outcome-based Payment Models for Pharmaceuticals
Article written by Noah Blase and Steven Lin, Windrose Consulting Group