On January 30, the Centers for Medicare and Medicaid Services (CMS) announced the implementation of its Cell and Gene Therapy (CGT) Access Model. The voluntary model enables CMS to negotiate multi-state, outcomes-based agreements (OBAs) on behalf of participating states for selected CGTs with participating manufacturers. The model will initially focus on sickle cell disease (SCD) but may expand to other therapeutic areas in future years. Through the model, CMS seeks to address Medicaid barriers to CGT access, improve health outcomes for Medicaid beneficiaries, and reduce Medicaid spending.

Entities eligible for the voluntary model will include state Medicaid programs and manufacturers of SCD CGTs that are FDA approved and launched by May 2024. Between May and November, participating manufacturers and CMS will negotiate key OBA terms (e.g., prices, rebates, outcome measures, patient access policies). States can then choose whether to sign the negotiated contract and can begin participating in the model at any time between January 2025 and January 2026.

Under the contract terms to be negotiated between manufacturers and CMS, participating states would receive supplemental rebates based on outcomes and, in return, would be required to implement a standard SCD gene therapy access policy. States may need to implement changes to support the model (e.g., amendments to reimbursement policies, alignment of coverage policies with managed care organizations, contracting with out-of-state providers) and may receive technical assistance and optional funding from CMS to do so. The model is expected to run for approximately 11 years, depending on the negotiated terms.

Key Considerations

The CGT Access Model reflects the alignment of CMS’s, states’, and manufacturers’ interests in developing novel ways to access and pay for a growing number of FDA-approved CGTs. Although manufacturers and commercial payers have demonstrated interest in developing OBAs for CGTs, operational complexities and regulatory barriers have limited the application of these agreements in Medicaid. This model seeks to circumvent these challenges by creating a role for CMS in negotiating OBA terms and assisting in implementation, data collection, and reconciliation of the agreement. This approach follows flexibilities implemented in the Medicaid VBP Final Rule and shares similarities with a national CGT model previously contemplated by the Medicaid and Children’s Health Insurance Program Payment and Access Commission.

Outstanding Questions

As the CGT Access Model is implemented, CMS, states, manufacturers, and other stakeholders will need to consider a number of outstanding questions. There are a range of unknowns that may impact participation decisions by states and manufacturers, and eventual model success, including:

• Definitions of Key Terms: In the model announcement, CMS states that participating states will need to agree to a “standard access policy.” Additional details on expectations for this policy and how it may apply to coverage criteria will provide more clarity around the access implications of the model. CMS also notes that participating states must change reimbursement structures to “appropriately reimburse” for gene therapies. It is unclear whether these anticipated changes relate specifically to reimbursement rates, reimbursement methodologies (e.g., average sales price-based payment vs. bundled payments), or operational systems to pay claims.
• Details of Negotiated Contract: CMS and manufacturers must align on terms of an agreement that could trigger a rebate. The selected outcome measures, the timeline for assessing them, and the size of rebates are all yet to be negotiated and will ultimately drive interest in participation among states. Stakeholders must also determine the OBA rebate structure (e.g., retrospective rebates, payments based on performance milestones, volume-based rebates). The process CMS will use to negotiate OBAs, including the office that will lead negotiations and the evidence it will leverage, remains unclear as CMS has not previously conducted similar negotiations in Medicaid.
• State Participation Decisions: The number of states that decide to participate between 2025 and 2026 will be a key factor in the model’s eventual scale and success. While many states may view CMS’s centralized negotiation role as a benefit of the model, the model’s conditions of participation could be a barrier to state participation. Additionally, some states may wish to negotiate their own OBAs; several state Medicaid programs have previously negotiated OBAs or other innovative contracts with manufacturers.

While CMS’s model announcement does not provide a formal comment opportunity, stakeholders should examine the high-level model outlined by CMS and consider near- and longer-term implications and opportunities to influence the design of the model. The ability of the model to reduce costs and improve access will likely influence CMS’s decision making regarding expansion to other therapeutic areas as well as state and manufacturer participation decisions. As the model is implemented, stakeholders can monitor the development of OBAs to better understand successful contracting arrangements and assess how potential therapeutic area expansion may impact pricing, reimbursement, and access for other gene therapy products.

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