5.2 Subscription-Based Payment Models NC Medicaid should explore innovative payment models, including Subscription-Based Payment Models (SBPMs), to increase utilization of new therapeutics and improve SCD health outcomes. Implementation: • NC Medicaid should apply for a Medicaid State Plan Amendment (SPA) that will allow NC DHHS to leverage SBPMs as expensive SCD therapeutics come to market that improve SCD outcomes.
additional prescriptions is nearly zero.306 SBPMs achieve goals for both the Medicaid program and the pharmaceutical company: SBPMs cap payments and increase access to expensive, life-saving treatments that would otherwise be inaccessible to Medicaid enrollees, while ensuring pharmaceutical manufacturers receive guaranteed, negotiated revenue.307 Typically, Medicaid programs have to cover all drugs of participating manufacturers that have been approved by the Food and Drug Administration (FDA), but subscription models approved by CMS allow Medicaid programs to contract with only one manufacturer for one treatment.308 Thus, the manufacturer with which the state contracts gains the state’s entire market share of patients that need the treatment—an appealing proposition when there are other competing treatments in the pipeline (Table 1).
Background
North Carolina Context
By 2030, an estimated 40 to 50 gene therapies will provide novel curative options for a variety of conditions.302 Gene therapies for treatment of SCD that aid in the production of normal red blood cells (RBCs) are currently in the drug pipeline and appear promising. In an ongoing phase 1/2 clinical trial, lentiviral-based therapy demonstrated efficacy, suggesting that it may improve the lives of patients with SCD.303 In the European Medicines Agency (EMA), a gene therapy using the lentiviral vector received conditional approval in 2019, which indicates that this gene therapy may soon be entering U.S. markets.304 The cost of this therapy in Europe was set at 1.58 million euros ($1.78 million) over five years. The pharmaceutical company, bluebird bio, Inc., expects that pricing will be similar in the United States.305 This therapy is anticipated to be a one-time, potentially curative therapy.
Currently, NC Medicaid covers all medications and treatments for SCD, without requiring prior authorization. As the majority of SCD patients nationally—an estimated 70 percent of children and 50 percent of adults—are covered under Medicaid or Medicaid administered programs, it is extremely important that innovative treatments continue to remain covered under Medicaid.309 And with five percent of Medicaid and CHIP enrollees in NC having SCD, it is crucial for the state to employ innovative methods to keep expenses down while providing access to these treatments.
Subscription-Based Payment Models (SBPMs) are a novel approach to paying for drugs that allows state Medicaid programs to contract exclusively with a single manufacturer to supply treatments at a reduced price while improving budget predictability. States pay a reduced price per prescription or treatment up to a set threshold. Once that threshold is met, the cost of 60 Part II. Sickle Cell Disease Recommendations
Evidence
Gene therapies have the potential to be costeffective in the long run. As of 2020, lifetime SCD-related health care expenditures exceed approximately $550,000 per person.310 One study estimated that a hypothetical treatment for SCD provided at birth would provide a costeffectiveness of $150,000 per quality-adjusted life year (QALY).311
