Medicaid and Drug Pricing

CMS has begun operating a national outcomes‑based payment model for two FDA‑approved sickle cell gene therapies, under which Medicaid programs pay multi‑million‑dollar prices only if the treatments work as promised. The model, created under a December 2024 contract with Vertex Pharmaceuticals and Bluebird Bio and continued by the Trump administration, lets CMS negotiate on behalf of states and claw back undisclosed "discounts and rebates" when patients do not achieve agreed‑upon outcomes. Thirty‑three states, Washington, D.C., and Puerto Rico have opted in so far, and the NPR/KFF piece follows 18‑year‑old Medicaid enrollee Serenity Cole of St. Louis, who completed months‑long gene‑therapy treatment in May and has since avoided the near‑constant sickle‑cell pain and frequent hospitalizations that previously upended her life. The therapies, list‑priced at around $2.2 million and $3.1 million per patient before hospitalization costs, offer a potential cure for many of the roughly 100,000 mostly Black Americans with sickle cell disease but pose a massive budget challenge for Medicaid, which covers about half that population. CMS and drugmakers have refused to disclose the specific repayment and outcome terms, drawing transparency criticism even as state Medicaid directors cautiously welcome a federal mechanism to blunt the fiscal shock of these one‑time "curative" treatments.