In the United States, Medicaid is considered the largest payer of healthcare, serving nearly a quarter of the total population; this includes nearly 40 million children. And in a separate analysis, pediatric patients represent a subgroup in which 40% of them are covered by Medicaid.2
The government program is especially critical for children with rare diseases, due to their need for intensive specialty care and higher risk for financial distress.
Back in 2021, an estimated 1,582,062 Medicaid recipients were estimated to have at least one out of 379 rare diseases.1 There are specific diseases—including hemophilia and sickle cell disease (SCD)—that are more widespread in groups enrolled in Medicaid than commercially insured individuals, due to the program’s concentration on children, disabled adults, and those families financially impacted by treatment costs.
FDA-approved cell and gene therapies: Promise vs. practical impact
The FDA has approved 34 cell and gene therapies to date, addressing a multitude of conditions from SCD and cancer to advanced wound care and others. Despite these efforts, approval does not necessarily guarantee clinical effectiveness, delivery of high-value care, or an impact on population health outcomes.
For that reason, in a review published in JAMA Pediatrics,1 a group of chief medical officers and medical directors of state Medicaid programs across five states aimed to provide a framework that can help Medicaid programs expansively evaluate cell and gene therapies (CGTs), and consider payment strategies, while promoting equitable access. Peer-reviewed articles and federal reports—among other publications—were used to support their findings addressing safety, effectiveness, payment, accountability, and access in the process.
Addressing safety risks for Medicaid populations
Safety concerns are prominent among Medicaid populations, given that CGT regimens can often require greater intensity; there is also a chance of complications taking place. As a result, the framework suggests tracking patients’ long-term outcomes for patients receiving these therapies with the design of a patient registry. This would include tracing individuals’ switch in and out of Medicaid coverage.
The group suggested the Center for International Blood and Marrow Transplant (CIBMTR) as a result of its 52 years of experience in registering and studying safety and late effects, following more than 600,000 hematopoietic CGTs. Further, in order to account for the various levels of health literacy, the framework suggests clinical practice guidelines and targeted patient education.
Measuring real-world effectiveness of CGTs
When it comes to effectiveness, the medical directors note that making sure that therapies provide real-world results that are similar to trial settings is critical. There should not be any confusion as to how one would define therapeutic success and failure; systems that track outcomes, specifically among patients facing socioeconomic barriers, are also needed.
Key Takeaways
- Medicaid plays a critical role in delivering gene therapies to millions of children and adults with rare diseases, but faces unique challenges in managing cost, access, and long-term outcomes.
- State Medicaid leaders propose a national framework to evaluate the safety, effectiveness, and affordability of cell and gene therapies while promoting equitable access.
- Innovative payment models like outcomes-based agreements and support for social needs are essential to ensure these therapies reach the patients who need them most.
Gene therapy pricing challenges and Medicaid coverage
As for price, Medicaid is needed to cover almost FDA-approved treatments for children and adolescents under the 21 when it is deemed “medically necessary,” which can sometimes be acquired at lower prices via the Medicaid Drug Rebate Program (MDRP), requiring a rebate of 23.1% of average manufacturer price.
This is effective for drugs with market competition, but less successful for those high-cost, gene therapies. In this case, manufacturers of these meds are able to set prices without competitive pressure, which exponentially increases launch prices.
Some manufacturers validate these costs by comparing them to what the lifetime cost of managing a chronic condition such as SCD would be, but this does not account for the risks that come with newer therapies, such as long-term side effects.
Complex payment structures and risk-sharing solutions
Gene therapies also present their share of administrative and financial challenges for Medicaid, whether it be complex payment structures that can shift the cost to states or hospitals, or confusion over rebate eligibility and complex payment structures. To manage the high prices, States are establishing value-based contracts and in some cases, utilizing high-risk insurance pools to support managed care organizations.
Accountability and federal efforts to expand access
Accountability refers to not only pushing individual states to uphold the ability to negotiate stronger terms when necessary by entering into an outcome-based agreement with manufacturers, but also backing federal models such as the like Centers for Medicare and Medicaid Services’ Cell and Gene Therapy Access Model, whose goal is to improve access to CGT for Medicaid beneficiaries, especially those with SCD.
Access represents handling social needs for patients that can affect their ability to benefit from CGT treatment, including housing, transportation, housing, and communication needs. Equitable geographic distribution of treatment centers are also a priority.
“Recent FDA-approved treatments promise potential cures for adults and children with rare diseases that are often diagnosed in childhood,” concluded the group of chief medical officers and medical directors. “Thus, Medicaid is central to the implementation of these cutting-edge technologies. While the promise of cure is compelling, limited data on long-term safety and durable effectiveness combined with multimillion dollar purchase prices force questions and create challenges. As chief medical officers and medical directors of state Medicaid agencies who are committed to rapidly adopting new technologies that improve health, we propose several health care policy changes and considerations that balance innovation, affordability, and equitable access.”
References
1. Miller SC, Dar MH, Finnell SME, Fish DG, Cogle CR. Medicaid and the Promise for Cure. JAMA Pediatr. 2025;179(2):197–202. doi:10.1001/jamapediatrics.2024.5100
2. Saraceno N. Investigating the Unwinding of Continuous Medicaid Coverage During the COVID-19 Pandemic. February 7, 2025. Accessed July 1, 2025. https://www.pharmaceuticalcommerce.com/view/investigating-unwinding-continuous-medicaid-coverage-covid-19-pandemic
