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.

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