Medicaid Programs Face Gene and Cell Therapy ‘Hurricane’

Though cutting-edge gene and cell therapies can transform patients’ lives, they’ve strained pharmacy budgets across the health care sector, and state Medicaid programs are no exception. With dozens of such therapies likely to earn FDA approval in coming years, Medicaid administrators and policy experts are working out how best to control costs and manage risk.

Gene and cell therapies can have courses with costs in the millions of dollars for one patient. States’ Medicaid programs must cover all FDA-approved drugs, though manufacturers are required by law under the Medicaid Drug Rebate Program (MDRP) to provide Medicaid programs with the “best price” for prescription drugs — defined as the lowest available price to any wholesaler, retailer or provider, excluding certain government programs. Despite that offset, the increasing use of expensive therapies has had a dramatic effect on Medicaid budgets: in 2017, drugs costing more than $1,000 per claim accounted for 43.7% of all Medicaid drug spending, according to an opinion piece published in the Journal of the American Medical Association (JAMA) on Oct. 11.

© 2024 MMIT
Peter Johnson

Peter Johnson

Peter has worked as a journalist since 2011 and has covered health care since 2020. At AIS Health, Peter covers trends in finance, business and policy that affect the health insurance and pharma sectors. For Health Plan Weekly, he covers all aspects of the U.S. health insurance sector, including employer-sponsored insurance, Medicaid managed care, Medicare Advantage and the Affordable Care Act individual marketplaces. In Radar on Drug Benefits, Peter covers the operations of (and conflicts between) pharmacy benefit managers and pharmaceutical manufacturers, with a particular focus on pricing dynamics and market access. Before joining AIS Health, Peter covered transportation, public safety and local government for various outlets in Seattle, his hometown and current place of residence. He graduated with a B.A. from Colby College.

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