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Original Investigation
March 22, 2021

A Budget Impact Analysis of Gene Therapy for Sickle Cell Disease: The Medicaid Perspective

Author Affiliations
  • 1Division of Pediatric Hematology and Oncology, Department of Pediatrics, Oregon Health & Science University, Doernbecher Children’s Hospital, Portland
  • 2Oregon Health & Science University, Department of Obstetrics and Gynecology, Portland
  • 3University of Washington School of Pharmacy, Fred Hutchinson Institute for Cancer Outcomes Research, Seattle
JAMA Pediatr. 2021;175(6):617-623. doi:10.1001/jamapediatrics.2020.7140
Key Points

Question  What will be the short-term budget impact of a gene therapy for sickle cell disease among Medicaid programs with the highest prevalence of the disease?

Findings  This budget impact analysis estimated a mean 1-year budget impact of $29.96 million per state Medicaid program, or $1.91 per member per month increase in spending, in the 10 states of interest.

Meaning  This study suggests that gene therapy for sickle cell disease will likely present affordability challenges to several Medicaid plans.

Abstract

Importance  Hundreds of gene therapies are undergoing clinical testing and are likely to be priced more than $1 million per course of treatment. The association that high prices will have with insurance coverage of gene therapy remains unclear. Gene therapy for sickle cell disease has shown early success and would be one of the first gene therapies available for a relatively large population.

Objectives  To estimate the budget impact and affordability of a gene therapy for severe sickle cell disease from the perspective of US Medicaid programs with the highest prevalence of sickle cell disease while exploring the impact of an annuity payment model.

Design, Setting, and Participants  A budget impact analysis was performed from January 1 to May 31, 2020, for a sickle cell disease gene therapy from the perspective of 10 state Medicaid plans with a 5-year time horizon, using state-level disease prevalence data from 2012. Disease prevalence, Medicaid enrollment, and expenditures were derived from the available literature. The eligible population was based on modified clinical trial inclusion criteria including individuals aged 13 to 45 years with severe disease.

Exposures  The gene therapy was assumed to be administered to 7% of the eligible population annually and was curative (no subsequent disease-related expenditures). The gene therapy price was $1.85 million in the base case, and baseline disease-related expenditures were $42 200 per year.

Main Outcomes and Measures  The main outcomes were total budget impact and budget impact per member per month in years 1 through 5. One-way sensitivity analysis was used to evaluate uncertainty of market diffusion, size of eligible population, price of therapy, and cost of routine care.

Results  An estimated 5464 Medicaid enrollees would be eligible for the gene therapy nationally, with 2315 individuals in the 10 Medicaid programs of interest (16 per 100 000 enrollees). The model projected a mean 1-year budget impact of $29.96 million per state Medicaid program in the sample ($1.91 per member per month). A 5-year annuity payment reduced the short-term budget impact.

Conclusions and Relevance  This study suggests that a gene therapy for severe sickle cell disease is likely to produce a considerable budget impact for many Medicaid plans while potentially offering substantial benefit to patients. Payers may need to take steps to ensure affordability and access. Gene therapy for sickle cell disease is likely to provide an early demonstration of the unique financial challenges associated with this emerging drug class.

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