Deal will get Lyfgenia to SCD patients on Medicaid in Michigan
Developer Bluebird Bio to provide gene therapy in outcomes-based agreement
Bluebird Bio has struck a deal with Medicaid in the state of Michigan to allow eligible people with sickle cell disease access to the now-approved gene therapy Lyfgenia (lovotibeglogene autotemcel).
The new deal will provide Lyfgenia through an outcomes-based agreement — a financial structure in which the cost of a medication is decided based on how well it works. The basic idea is that Medicaid won’t have to pay full price for patients who don’t get the maximum expected benefit from treatment.
“We are extremely pleased to have reached this agreement with Michigan Medicaid,” Tom Klima, Bluebird’s chief commercial and operating officer, said in a company press release.
“Our commercial approach is built on the principle that people with sickle cell disease insured through Medicaid deserve the same timely access to gene therapy as patients with other forms of insurance,” Klima said.
Wholesale cost of one-time Lyfgenia is over $3M
Formerly known as lovo-cel, Lyfgenia was approved by the U.S. Food and Drug Administration (FDA) late last year as a treatment for people with sickle cell, ages 12 and older, who have a history of vaso-occlusive events (VOEs), including painful vaso-occlusive crises.
Use of the therapy entails collecting blood cell precursors from a patient’s bone marrow, engineering them to equip them with a healthy version of the HBB gene that’s defective in sickle cell, and then infusing the modified cells back into the patient via a stem cell transplant.
The FDA’s approval of Lyfgenia was based on clinical trial data showing the therapy can substantially reduce the future risk of VOEs.
Nevertheless, obtaining insurance coverage for one-time gene therapies like Lyfgenia has proven a challenge in the current U.S. healthcare system.
The issue is that these one-time therapies are costly to develop, and they’re expected to provide patients with a lifetime of benefits. As such, they carry very high price tags — Lyfgenia’s wholesale acquisition cost is more than $3 million.
Gene therapy developers like Bluebird have argued that these price tags are consistent with the transformative benefit that treatment is expected to provide. But insurance providers are reluctant to pay such high prices when there are some individuals who don’t benefit as much as others for reasons that remain not fully understood.
Bluebird has designed its outcomes-based agreement for Lyfgenia based around rates of VOE-related hospitalizations in the first few years after treatment. In other words, Medicaid will only be paying full price for the therapy in patients who experience a major reduction in severe VOEs, as expected. This is the first agreement of this kind that Bluebird has made with any Medicaid agency.
The momentum behind our reimbursement negotiations across the board just months following approval … underscores payers’ shared commitment to equitable access and understanding of the value that Lyfgenia can bring to people living with sickle cell disease, their caregivers, and the healthcare system.
The company didn’t provide specifics on the agreement, but stated that the arrangement “was designed with direct input from government payers to specifically address the challenges they face in adapting to provide access to one-time, transformative treatments.”
Medicaid is the U.S. government program that provides health insurance to low-income Americans. Roughly half of sickle cell patients in the U.S. are insured through Medicaid.
Though a federal program, Medicaid is administered separately by each state government. Bluebird said it is now in talks to create similar agreements for Lyfgenia access with more than 15 Medicaid agencies, representing 80% of Medicaid-insured people in the U.S. The company also is working to secure coverage with commercial insurance providers.
“The momentum behind our reimbursement negotiations across the board just months following approval … underscores payers’ shared commitment to equitable access and understanding of the value that Lyfgenia can bring to people living with sickle cell disease, their caregivers, and the healthcare system,” Klima said.
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