New cell and gene therapies (CGTs) are offering great promise and tremendous challenges for the US healthcare system but with shocking initial costs. For example, gene therapy with exagamglogene autotemcel (Casgevy) might permanently stave off vaso-occlusive crises in some patients with sickle cell anemia. But this product arrived on the market with a $2.2 million price tag.

For that reason, health policy researcher Stacie Dusetzina, PhD, of Vanderbilt University School of Medicine, Nashville, Tennessee, has suggested a single-payer program as a new approach for handling the costs of gene therapies and cell-based therapies such as CD19-directed chimeric antigen receptor T-cell treatments.

In an article in JAMA Internal Medicine, Dusetzina and coauthor, Audun Brendbekken, MD, of the University of Bergen, Bergen, Norway, said such a program could be operated through private entities or through a carve out of the Medicare insurance program. Congress has a model for this.

In 1972, lawmakers wanted to make kidney dialysis, then an innovative and costly treatment, available to people who were too young for Medicare. Congress passed a law, allowing those with end-stage renal disease (ESRD) to enroll in Medicare.

“For eligible treatments, the single payer would ideally adopt value-based price negotiation strategies so as not to supplant other health care priorities,” Dusetzina and Brendbekken wrote. “Methods for negotiation could mirror those implemented under the Inflation Reduction Act’s Medicare Drug Price Negotiation program.”

Medscape Medical News asked Dusetzina to expand on these ideas in the following Q&A exchange.

Your JAMA Internal Medicine article makes a strong case for Congress to at least consider a path for a single-payer approach for CGTs. Is there any chance that lawmakers might soon try to address this issue? Might the recommendation from the National Academy of Medicine’s report, “Aligning Investments in Therapeutic Development with Therapeutic Need: Closing the Gap,” serve as a prompt for lawmakers?

I am hopeful that Congress might take up this issue, though there are a lot of competing priorities and fewer bipartisan efforts right now. As you note, the National Academy of Medicine recommended that Congress should task an agency such as the Medicare Payment Advisory Commission or Medicaid and Children’s Health Insurance Program Payment and Access Commission with studying and developing recommendations for alternative payment models for products like CGTs. This is not a simple thing to do as even defining which products might be eligible under a new system and what “cure” means can be challenging to define. This is why we recommended a study of options first, which could provide a range of options that Congress could consider for moving forward.

The Trump administration has continued the Center for Medicare and Medicaid Innovation (CMMI)’s CGT Access Model, which began in the Biden administration. There was even a Centers for Medicaid and Medicare Services announcement in July that 33 states, along with the District of Columbia and Puerto Rico, will be participating. Does this signal growing acceptance of a drive toward outcomes-based models for costly medicines?

I think that this is a good sign, though we do not yet know how many patients will receive treatment under this model. States will likely face funding constraints for their Medicaid programs in coming years, and the CMMI model does not provide states with more funding to pay for the treatments, though it does help to negotiate more favorable prices (or at least that is the goal). Even though this is a helpful start, the fact that Medicaid programs will still need to pay for these treatments may still mean that the budget impact in the short term is very high and hard for them to absorb.

Your article mentions the potential benefit for pharmaceutical companies from a single-payer approach for CGTs, in that they would gain more predictable payments. Are there examples with other treatments that illustrate this point? Did the creation of the special Medicare coverage for kidney dialysis allow for increased investment in ESRD?

There have been several news reports over the past years about instability in funding for some of the more innovative CGT developers. (Bluebird Bio is one example that I have seen highlighted.) I believe that innovators have faced substantial challenges in getting their drugs to patients, across many different payer types in the US. If there were a single-payer model for these drugs that created a clearer pathway to access for patients, even if it included greater price negotiation, I believe they would want to explore this option.

On that point, would there be lessons for federal policymakers from the ESRD experience if they created a carve-out for CGTs? Are there missteps with the Medicare coverage for ESRD that could be avoided in designing a new federal approach for CGTs?

I’m not as sure about the ESRD-specific learnings. ESRD is a good example of how a specific condition could qualify a person for Medicare coverage.

CGTs will be a bit different than ESRD with the payment dynamics. For example, if Medicare were the single payer, there would be questions about whether that program paid only for the CGT product itself or an episode of care, such as any prior treatment needed to prepare for CGT/hospitalizations, etc. There are also questions about whether people would transition off existing insurance coverage and for how long. Again, there are lots of details that will matter, and another reason that I think the best next step is for Congress to ask for a study of this topic.

Could there be any advantages to private entities, such as stop-loss insurers, to expand CGT access?

My understanding of this market is that some of these stop-loss/reinsurance providers are specifically carving out CGTs, which is another reason that a broader solution is needed. A single payer could absolutely be an independent or private group.

Dusetzina reported receiving grants from Arnold Ventures and the Commonwealth Fund during the writing of the Viewpoint article, as well as grants from the Leukemia & Lymphoma Society and personal fees from the Institute for Clinical and Economic Review (ICER) outside the submitted work. She is a member of the ICER Midwest Comparative Effectiveness Advisory Council and a member of the Medicare Payment Advisory Commission. She served as a member of the National Academy of Medicine Consensus Study Report Workgroup that produced the report, “Aligning Investments in Therapeutic Development with Therapeutic Need: Closing the Gap.”

Brendbekken reported receiving grants from the University of Bergen and personal fees from the Norwegian Ministry of Health and Care Services to perform a literature review of public knowledge concerning priority setting in healthcare on behalf of the Norwegian governmental expert group on transparency in health care priority setting.