Using Real-World Data to Inform Value-Based Contracts for Cell and Gene Therapies in Medicaid

Objective High upfront costs and long-term benefit uncertainties of gene therapies challenge Medicaid budgets, making value-based contracts a potential solution. However, value-based contract design is hindered by cost-offset uncertainty. The aim of this study is to determine actual cost-offsets for valoctocogene roxaparvovec (hemophilia A) and etranacogene dezaparvovec (hemophilia B) from Colorado Medicaid’s perspective, defining payback periods and its uncertainty from the perspective of Colorado Medicaid. Methods This cost analysis used 2018–2022 data from the Colorado Department of Health Care Policy & Financing to determine standard-of-care costs and employed cost simulation models to estimate the cost of Medicaid if patients switched to gene therapy versus if they did not. Data encompassed medical and pharmacy expenses of Colorado Medicaid enrollees. Identified cohorts were patients aged 18+ with ICD-10-CM codes D66 (hemophilia A) and D67 (hemophilia B). Severe hemophilia A required ≥ 6 claims per year for factor therapies or emicizumab, while moderate/severe hemophilia B necessitated ≥ 4 claims per year for factor therapies. Patients were included in the cohort in the year they first met the criteria and were subsequently retained in the cohort for the duration of the observation period. Standard-of-care included factor VIII replacement therapy/emicizumab for hemophilia A and factor IX replacement therapies for hemophilia B. Simulated patients received valoctocogene roxaparvovec or etranacogene dezaparvovec. Main measures were annual standard-of-care costs, cost offset, and breakeven time when using gene therapies. Results Colorado Medicaid’s standard-of-care costs for hemophilia A and B were $426,000 [standard deviation (SD) $353,000] and $546,000 (SD $542,000) annually, respectively. Substituting standard-of-care with gene therapy for eligible patients yielded 8-year and 6-year average breakeven times, using real-world costs, compared with 5 years with published economic evaluation costs. Substantial variability in real-world standard-of-care costs resulted in a 48% and 59% probability of breakeven within 10 years for hemophilia A and B, respectively. Altering eligibility criteria significantly influenced breakeven time. Conclusions Real-world data indicates substantial uncertainty and extended payback periods for gene therapy costs. Utilizing real-world data, Medicaid can negotiate value-based contracts to manage budget fluctuations, share risk with manufacturers, and enhance patient access to innovative treatments.