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Vertex Pharmaceuticals and bluebird bio have entered into an agreement with CMS to participate in a new Medicaid payment model for gene-based sickle cell anemia treatments, the agency announced Wednesday.

"The will increase access to promising therapies that improve the chances of people living longer, healthier lives," CMS Administrator Chiquita Brooks-LaSure . "This is a new frontier in providing access for people with sickle cell disease to potentially transformative treatments. CMS is pleased that these two drug manufacturers have agreed to participate in the model and work with the agency and states in providing access to potentially curative treatments that might otherwise be out of reach."

The model, which is voluntary, will test payments to manufacturers based on treatment outcomes. Vertex makes exagamglogene autotemcel (Casgevy) while bluebird bio manufactures lovotibeglogene autotemcel (Lyfgenia). In addition to improving outcomes, the Center for Medicare and Medicaid Innovation (CMMI), which is spearheading the payment model, is hoping it will increase access to cell and gene therapies and lower healthcare costs. Now that the agreements have been secured, "CMS will now move forward with engaging states and U.S. territories that participate in the Medicaid Drug Rebate Program to help them decide whether to participate in the model," according to the release.

In the U.S., more than 100,000 people live with sickle cell disease, which disproportionately affects Black and Hispanic people. About 50% to 60% of sickle cell patients are enrolled in Medicaid. Patients generally have a shortened life expectancy -- about 20 years shorter, on average -- and the disease costs the healthcare system about $3 billion annually.

"Cell and gene therapies hold significant potential to improve patient outcomes and transform lives, ultimately reducing long-term healthcare spending," CMMI Director Liz Fowler said in the release. "However, due to the high costs, these therapies can pose challenges to state budgets. This model will afford state Medicaid agencies more budget predictability while helping improve access to these innovative therapies for people with Medicaid with sickle cell disease."

Cost is a big issue with gene therapy for sickle cell; the . An NIH-funded in Annals of Internal Medicine looked at two different computer simulation models and found that gene therapy priced below either $1 million or $2 million -- -- could be cost-effective in terms of reducing morbidity, improving survival, and reducing the cost of care over patients' lifetimes compared to conventional care.

The new model will launch in January 2025, and states may choose to begin participation anytime from January 2025 through January 2026. In addition, states may apply for optional model funding by responding to the , but they are not required to respond to the notice of funding opportunity to participate in the model.

Under the model, CMS and pharmaceutical manufacturers negotiate a set of key terms, which would include pricing that reflects rebates paid by the manufacturer, as well as outcome measures, according to . State Medicaid agencies can then decide whether to sign the negotiated contract. If a state agrees, the manufacturers will be obligated to provide that state with supplemental rebates that reflect model-negotiated terms. The states will then be required to implement a standard policy for access to the treatments. CMS will provide support through technical assistance and funding to participating states.

The model is an outgrowth of from President Biden directing HHS to consider developing models that address access to novel therapies and lower drug costs. This model may be expanded to other types of cell and gene therapies in the future, CMS said.

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