New Medicaid Policy Won't Pay for Costly Sickle Cell Therapies Unless They Work

By Phil Galewitz, KFF Health News

Serenity Cole enjoyed Christmas last month relaxing with her family near her St. Louis home, making crafts and visiting friends.

It was a contrast to how Cole, 18, spent part of the 2024 holiday season. She was in the hospital — a frequent occurrence with sickle cell disease, a genetic condition that damages oxygen-carrying red blood cells and for years caused debilitating pain in her arms and legs. Flare-ups often would force her to cancel plans or miss school.

“With sickle cell it hurts every day,” she said. “It might be more tolerable some days, but it’s a constant thing.”

In May, Cole completed a several-months-long gene therapy treatment that helps reprogram the body’s stem cells to produce healthy red blood cells.

She was one of the first Medicaid enrollees nationally to benefit from a new payment model in which the federal government negotiates the cost of a cell or gene therapy with pharmaceutical companies on behalf of state Medicaid programs — and then holds them accountable for the treatment’s success.

Under the agreement, participating states will receive “discounts and rebates” from the drugmakers if the treatments don’t work as promised, according to the Centers for Medicare & Medicaid Services.

SERENITY COLE

That’s a stark difference from how Medicaid and other health plans typically pay for drugs and therapies — the bill usually gets paid regardless of the treatments’ benefits for patients. But CMS has not disclosed the full terms of the contract, including how much the drug companies will repay if the therapy doesn’t work.

The treatment Cole received offers a potential cure for many of the 100,000 primarily Black Americans with sickle cell disease, which is estimated to shorten lifespans by more than two decades. But the treatment’s cost presents a steep financial challenge for Medicaid, the joint state-federal government insurer for people with low incomes or disabilities. Medicaid covers roughly half of Americans with the condition.

There are two gene therapies approved by the Food and Drug Administration on the market, one costing $2.2 million per patient and the other $3.1 million, with neither cost including the expense of the long hospital stay.

The CMS program is one of the rare health initiatives started under President Joe Biden and continued during the Trump administration. The Biden administration signed the deal with the two manufacturers, Vertex Pharmaceuticals and Bluebird Bio, in December 2024, opening the door for states to join voluntarily.

“This model is a game changer,” Mehmet Oz, the CMS administrator, said in a July statement announcing that 33 states, Washington, D.C., and Puerto Rico had signed onto the initiative.

Asked for further details on the contracts, Catherine Howden, a CMS spokesperson, said in a statement that the terms of the agreements are “confidential and have only been disclosed to state Medicaid agencies.”

“Tackling the high cost of drugs in the United States is a priority of the current administration,” the statement said.

Citing confidentiality, two state Medicaid directors and the two manufacturers declined to reveal the financial terms of agreements.

‘A Worthy Experiment’

The gene therapies, approved in December 2023 for people 12 or older with sickle cell disease, offer a chance to live without pain and complications, which can include strokes and organ damage, and avoid hospitalizations, emergency room visits, and other costly care. The Biden administration estimated that sickle cell care already costs the health system almost $3 billion a year.

With many more expensive gene therapies on the horizon, the cost of the sickle cell therapies presages financial challenges for Medicaid. Hundreds of cell and gene therapies are in clinical trials, and dozens could get federal approval in the next few years.

If the sickle cell payment model works, it will probably lead to similar arrangements for other pricey therapies, particularly for those that treat rare diseases, said Sarah Emond, president and CEO of the Institute for Clinical and Economic Review, an independent research institute that evaluates new medical treatments. “This is a worthy experiment,” she said.

Setting up payment for drugs based on outcomes makes sense when dealing with high treatment costs and uncertainty about their long-term benefits, Emond said.

“The juice has to be worth the squeeze,” she said.

Clinical trials for the gene therapies included fewer than 100 patients and followed them for only two years, leaving some state Medicaid officials eager for reassurance they were getting a good deal.

“What we care about is whether services actually improve health,” said Djinge Lindsay, chief medical officer for the Maryland Department of Health, which runs the state’s Medicaid program. Maryland is expected to begin accepting patients for the new sickle cell program this month.

Medicaid is already required to cover almost all FDA-approved drugs and therapies, but states have leeway to limit access by restricting which patients are eligible, setting up a lengthy prior authorization process, or requiring enrollees to first undergo other treatments.

While the gene therapy treatments are limited to certain hospitals around the country, state Medicaid officials say the federal model means more enrollees will have access to the therapies without other restrictions.

The manufacturers also pay for fertility preservation such as freezing reproductive cells, which could be damaged by chemotherapy during the treatment. Typically, Medicaid doesn’t cover that cost, said Margaret Scott, a principal with the consulting firm Avalere Health.

Emond said pharmaceutical companies were interested in the federal deal because it could lead to quicker acceptance of the therapy by Medicaid, compared with signing individual contracts with each state.

States are attracted to the federal program because it offers help monitoring patients in addition to negotiating the cost, she said. Despite some secrecy around the new model, Emond said she expects a federally funded evaluation will track the number of patients in the program and their results, allowing states to seek rebates if the treatment is not working.

The program could run for as long as 11 years, according to CMS.

“This therapy can benefit many sickle cell patients,” said Edward Donnell Ivy, chief medical officer for the Sickle Cell Disease Association of America.

He said the federal model will help more patients access the treatment, though he noted utilization will depend in part on the limited number of hospitals that offer the multimonth therapy.

Hope for Sickle Cell Patients

Before gene therapy, the only potential cure for sickle cell patients was a bone marrow transplant — an option available only to those who could find a suitable donor, about 25% of patients, Ivy said. For others, lifelong management includes medications to reduce the disease’s effects and manage pain, as well as blood transfusions.

About 30 of Missouri’s 1,000 Medicaid enrollees with sickle cell disease will get the therapy in the first three years, said Josh Moore, director of the state’s Medicaid program. So far, fewer than 10 enrollees have received it since the state began offering it in 2025, he said.

Less than a year into the federal program, Moore said it’s too early to tell its rate of success — defined as an absence of painful episodes that lead to a hospital visit. But he hopes it will be close to the 90% rate seen over the course of a couple of years in clinical trials.

Moore said the federal program based on how well the treatment works was preferred over cutting fees for a new and promising therapy, which would put the manufacturers’ ability to develop new drugs at risk. “We want to be good stewards of taxpayer dollars,” he said.

He declined to comment on how much the state may save from the arrangement or disclose other details, such as how much the drug companies might have to pay back, citing confidentiality of the contracts.

Lately Cole, who underwent gene therapy at St. Louis Children’s Hospital, has been able to focus on her hobbies — playing video games, drawing, and painting – and earning her high school diploma.

She said she was glad to get the treatment. The worst part was the chemotherapy, she said, which left her unable to talk or eat — and entailed getting stuck with needles.

She said that her condition is “way better” and that she has had no pain episodes leading to a hospital stay since completing the therapy last spring. “I’m just grateful I was able to get it.”

KFF Health News is a national newsroom that produces in-depth journalism about health issues.

Experimental Gene Therapy Could Cure Sickle Cell Disease

By Pat Anson, PNN Editor

Experimental gene therapy is helping sickle cell patients develop normal red blood cells and could potentially be a cure for the disease, according to research recently published in The New England Journal of Medicine.

In early-stage Phase 1 and 2 clinical trials at the University of Alabama at Birmingham, 25 patients treated with a gene therapy called LentiGlobin produced stable amounts of red blood cells containing hemoglobin after a single infusion. 

Sickle cell disease is a genetic disorder that causes red blood cells to form in a crescent or sickle shape, which creates painful blockages in blood vessels that can lead to anemia, infections, strokes and organ failure. About 100,000 Americans live with sickle cell disease, primarily people of African or Hispanic descent.

Unlike other gene therapies that edit or silence genes, LentiGlobin adds a modified gene that reprograms the diseased blood cells.  

“In this therapy, we do not change or edit the gene that causes sickle cell disease,” says Julie Kanter, MD, director of the UAB Adult Sickle Cell Clinic. “Instead, we use a viral vector to deliver a new gene that will make a healthy hemoglobin — a beta hemoglobin — into the stem cell. This is like coding new instructions into the cell.”

The new hemoglobin -- called HbAT87Q -- is slightly different from regular hemoglobin and is less likely to cause red blood cells to be misshaped.  The HbAT87Q can also be measured more accurately inside the cell, allowing doctors to know how much of the new hemoglobin a patient is making on their own.

Although the gene therapy looks promising, researchers say more advanced studies are needed to make sure LentiGlobin is safe and effective long-term. 

“In an earlier part of this study, we were not able to get enough of the new gene into each cell,” explained Kanter. This caused the blood cells to be stressed and for some patients to still have symptoms of sickle cell disease. Two patients in the initial group developed leukemia.  

“We need to see that we have fixed this problem, says Kanter. “We also need to make sure this procedure both reduces pain/stops all pain crisis and prevents organ damage from sickle cell. This will take time. We will have to watch people for the next two to 15 years and measure their organ function compared to those who did not get this therapy.”

A 2020 report by the National Academies of Sciences, Engineering, and Medicine called for major changes in the way sickle cell disease is treated in the U.S. Compared to other chronic illnesses, stem cell disease has received little attention from the healthcare community, resulting in a lag in the development of new treatments.

Many stem cell patients also feel stigmatized when they have a pain flare and go to an emergency room, because ER staff are often ignorant about the disease and believe patients are seeking drugs.

“People with sickle cell disease have endured unnecessary hardship for more than 100 years. They have fewer medications and therapies than many other diseases and have received much less attention and funding. We need new and better options for people with sickle cell disease,” said Kanter.

Bone marrow and stem cell transplants are currently the only cures for sickle cell disease, but it’s often difficult to find good donors. Fewer than one in five people with the disease have compatible donors.

Old Cancer Drug May Have New Purpose Treating Chronic Pain

By Pat Anson, PNN Editor

Over the years, several drugs that were developed to treat medical conditions such as epilepsy and depression have been repurposed as treatments for chronic pain — often with mixed results. Pregabalin (Lyrica) and duloxetine (Cymbalta) are just two examples.

A team of researchers at Duke University may have found a new pain medication while looking through what they call the “junkyard of cancer drugs.” They analyzed over 1,000 compounds contained in Compound Libraries at the National Cancer Institute, looking for drugs that reset genetic switches that control neurotransmission. Their goal was to find a drug that doesn’t just temporarily block pain signals, but changes the underlying mechanism that causes pain sensation.  

“Because chronic pain, like many chronic diseases, has an important root in genetic switches being reprogrammed in a bad way, a disease modifying treatment for chronic pain should reset the genetic switches, not just cover up the pain, as with opioid and aspirin/Tylenol-like painkillers." said Wolfgang Liedtke, MD, an adjunct professor of neurobiology at Duke and an executive scientist at Regeneron Pharmaceuticals.

Liedtke and his colleagues identified four promising compounds. Among them was kenpaullone, a drug developed over 20 years ago that inhibits neurotransmission by activating a gene called Kcc2. When Kcc2 is enhanced, it reduces chloride levels in nerve cells and silences pain signals.

In laboratory mice, Liedtke's team found that kenpaullone significantly reduced pain caused by nerve injury and bone cancer. The pain relief was long-lasting, which is consistent with the drug stopping pain signals through gene regulation.

"At this stage, we knew we had met the basic requirement of our screen of shelved cancer drugs, namely identified Kcc2 gene expression-enhancers, and demonstrated that they are analgesics in valid preclinical pain models,” Liedtke explained in a university press release.

Encouraged by their findings, Liedtke's team assessed whether kenpaullone affects spinal cord processing of pain and whether kenpaullone treatment can reduce chloride levels in pain-relaying neurons. Both sets of experiments on laboratory mice produced positive results.

The research findings, published in the journal Nature Communications, suggest that kenpaullone and gene therapy both have the potential to become treatments for chronic refractory pain conditions, such as neuropathy, cancer bone pain, trigeminal neuralgia, and other forms of chronic pain associated with poor Kcc2 function.

Controlling pain through experimental gene therapy is in its early stages, but has produced some intriguing results. In a study earlier this year, researchers at the University of California San Diego used a gene editing tool to alter a gene that senses pain in mice. The suppressed gene increased pain tolerance, lowered pain sensitivity and provided months of pain relief without the use of drugs.

Experimental Gene Therapy May Relieve Chronic Pain

By Pat Anson, PNN Editor

A new study by researchers at the University of California San Diego suggests that gene therapy could someday be used to treat a variety of chronic pain conditions without the use of drugs.

In experiments on laboratory mice, researchers found that temporarily repressing a gene involved in sensing pain increases pain tolerance, lowers pain sensitivity and provided months of pain relief without causing numbness. Their findings were published in the journal Science Translational Medicine.

“What we have right now does not work,” said first author Ana Moreno, PhD, CEO of Navega Therapeutics, which is developing gene therapies to treat chronic pain. “There’s a desperate need for a treatment that’s effective, long-lasting and non-addictive.”

Moreno was grad student at UC San Diego studying gene repression when she came across a paper about a genetic mutation that causes humans to feel no pain. The mutation blocks a protein -- called NaV1.7 -- that’s involved in transmitting pain signals in the spinal cord.

That’s when she came up with the idea of suppressing the gene using the CRISPR gene editing tool. Moreno was working with a version of CRISPR that uses what’s called “dead” Cas9, which lacks the ability to permanently cut DNA. Instead, it sticks to a gene and temporarily blocks its expression.

“By targeting this gene, we could alter the pain phenotype,” Moreno explained. “It’s not cutting out any genes, so there are no permanent changes to the genome. You wouldn’t want to permanently lose the ability to feel pain.

“One of the biggest concerns with CRISPR gene editing is off-target effects. Once you cut DNA, that’s it. You can’t go back. With dead Cas9, we’re not doing something irreversible.”

Moreno and UC San Diego bioengineering professor Prashant Mali, PhD, co-founded Navega Therapeutics to work on developing gene therapy as a treatment for pain.  They teamed up with Tony Yaksh, PhD, a professor of anesthesiology and pharmacology at UC San Diego School of Medicine, and developed a CRISPR/dead Cas9 system to target and repress the gene that codes for NaV1.7.

When they administered spinal injections of the system into laboratory mice with inflammatory and chemotherapy-induced pain, the mice displayed higher pain thresholds than mice that did not receive the gene therapy. The treated mice were slower to withdraw a paw from painful stimuli (heat, cold or pressure) and spent less time licking or shaking their paws after being hurt.

The treatment was still effective after 44 weeks in the mice with inflammatory pain and 15 weeks in those with chemotherapy pain. The treated mice did not lose sensitivity or display any changes in normal motor function.

To validate their results, the researchers performed the same tests using another gene editing tool called zinc finger proteins. It’s an older technique than CRISPR, but works the same way. Spinal injections of the zinc fingers into mice produced the same results as the CRISPR-dead Cas9 system.

“We were excited that both approaches worked,” Mali said. “The beauty about zinc finger proteins is that they are built on the scaffold of a human protein. The CRISPR system is a foreign protein that comes from bacteria, so it could cause an immune response. That’s why we explored zinc fingers as well, so we have an option that might be more translatable to the clinic.”

The researchers say this solution could work for a variety of chronic pain conditions, including diabetic neuropathy, sciatica, and chemotherapy pain. They believe their gene therapy platform could also be used to treat short-term acute pain.

“Think of the young athlete or wounded war fighter in which the pain may resolve with wound healing,” Mali explained. “We would not want to permanently remove the ability to sense pain in these people, especially if they have a long-life expectancy. This CRISPR/dead Cas9 approach offers this population an alternative therapeutic intervention—that’s a major step in the field of pain management.”  

Researchers at UC San Diego and Navega are planning further studies of pain-relieving gene therapy on non-human primates. Their goal is to begin human clinical trials in a couple years. Their work is funded by UC San Diego Institutional Funds and the National Institutes of Health.

Gene Therapy Eases Chronic Pain in Dogs

By Lisa Marshall, University of Colorado at Boulder

When Shane the therapy dog was hit by a Jeep, life changed for him and his guardian, Taryn Sargent.

The impact tore through the cartilage of Shane's left shoulder. Arthritis and scar tissue set in. Despite surgery, acupuncture and several medications, he transformed from a vibrant border collie who kept watch over Sargent on long walks to a fragile pet who needed extensive care.

"Sometimes he would just stop walking and I'd have to carry him home," recalls Sargent, who has epilepsy and relies on her walks with Shane to help keep her seizures under control. "It was a struggle to see him in that much pain."

Today, 10-year-old Shane's pain and reliance on medication have been dramatically reduced and he's bounding around like a puppy again, 18 months after receiving a single shot of an experimental gene-therapy invented by CU Boulder neuroscientist Linda Watkins

shane and taryn sargent (casey cass/cu boulder)

Thus far, the opioid-free, long-lasting immune modulator known as XT-150 has been tested in more than 40 Colorado dogs with impressive results and no adverse effects. With human clinical trials now underway in Australia and California, Watkins is hopeful the treatment could someday play a role in addressing the nation's chronic pain epidemic.

"I'm hoping the impact on pets, their guardians and people with chronic pain could be significant," said Watkins, who has worked more than 30 years to bring her idea to fruition. "It's been a long time coming."

The Role of Glial Cells

Watkins' journey began in the 1980s when, as a new hire in the department of psychology and neuroscience, she began to rock the boat in the field of pain research.

Conventional wisdom held that neurons were the key messengers for pain, so most medications targeted them. But Watkins proposed that then-little-understood cells called "glial cells" might be a culprit in chronic pain. Glial cells are immune cells in the brain and spinal cord that make people ache when they're sick. Most of the time, that function protects us. 

Watkins proposed that in the case of chronic pain, which can sometimes persist long after the initial injury has healed, that ancient survival circuitry somehow gets stuck in overdrive. She was greeted with skepticism.

"The whole field was like 'what on Earth is she talking about?'"

She and her students hunkered down in the lab nonetheless, ultimately discovering that activated glial cells produce specific inflammatory compounds which drive pain. They also learned that, after the initial sickness or injury fades, the cells typically produce a compound called Interleukin 10 (IL-10) to dampen the process they started.

"IL-10 is Mother Nature's anti-inflammatory," she explains. "But in the onslaught of multiple inflammatory compounds in chronic pain, IL-10's dampening cannot keep pace."

Over the years, she and her team experimented with a host of different strategies to boost IL-10. They persisted and, in 2009, Watkins co-founded Xalud Therapeutics. Their flagship technology is an injection, either into the fluid-filled space around the spinal cord or the site of an inflamed joint, that delivers circles of DNA in a sugar/saline solution to cells, instructing them to ramp up IL-10 production.

With financial help from the National Institute of Neurological Disorders and Stroke, the MayDay Fund and CU's Technology Transfer Office – which has provided intellectual property support, assistance with licensing agreements, and help obtaining a $100,000 research grant in 2018 – Watkins is edging closer to bringing her idea to clinical practice.

She has teamed up with veterinary chronic pain specialist Rob Landry, owner of the Colorado Center for Animal Pain Management in Westminster, to launch the IL-10 research study in dogs.

Their results have not been published yet. But thus far, the researchers say, the results look highly promising.

"They're happier, more engaged, more active and they're playing again," said Landry, as he knelt down to scratch Shane's belly after giving him a clean bill of health.

With Shane able to accompany her on her walks again, Sargent has also seen her quality of life improve. Her seizures, which increased in frequency when Shane was injured, have subsided again.

linda watkins with shane (casey cass/cu boulder)

Human Studies Underway

Because the treatment is so localized and prompts the body's own pain-killing response, it lacks the myriad side effects associated with opioids – including constipation and dependency – and it can last for many months after a single injection.

Ultimately, that could make it an attractive option for people with neuropathic pain or arthritis, Watkins says.

This summer, Xalud Therapeutics launched the first human study in Australia, to test the safety, tolerability and efficacy of the compound. Another one-year clinical trial of 32 patients with osteoarthritis of the knee is now underway in Napa, California.

More research is necessary in both pets and people, Watkins stresses. But she's hopeful.

"If all goes well, this could be a game-changer."