CMS is expanding its approach to gene therapy reimbursement. For companies preparing to enter the U.S. market, the timing and economics of payment agreements deserve attention.
By Ron Lanton
President, Lanton Strategies International B.V.
Developing a gene therapy is difficult enough. Getting it approved, paid for and delivered to patients presents another set of challenges.
On October 27, 2026, the Centers for Medicare & Medicaid Services (CMS) announced plans to expand its Cell and Gene Therapy Access Model beyond sickle cell disease. The agency intends to invite manufacturers of additional therapies into a program that negotiates payment arrangements on behalf of participating state Medicaid programs.
One important change is the timing. CMS plans to structure its upcoming application process so that negotiations can begin sooner after FDA approval. Therapies already on the market may also be eligible.
For biotechnology companies preparing a U.S. launch, earlier reimbursement discussions could make a meaningful difference in commercial planning.
What Has the Model Accomplished?
The existing program allows CMS to negotiate outcomes-based agreements with manufacturers rather than requiring each state Medicaid agency to negotiate separately.
These agreements generally establish pricing discounts and additional rebates tied to whether a treatment achieves agreed clinical results.
The initial program covers gene therapies for sickle cell disease. According to CMS, 32 states, the District of Columbia and Puerto Rico participate, representing approximately 84% of Medicaid beneficiaries with that condition.
CMS's first evaluation found that centralized negotiations reduced some of the administrative work associated with state-by-state agreements. Participating states also benefited from negotiating collectively, particularly those with limited resources or smaller patient populations.
That is encouraging, although the evaluation focused on the negotiation process. It is too early to conclude that the model has demonstrated long-term improvements in patient outcomes or reduced overall treatment costs.
What Does This Mean for a Developer?
For a company developing an expensive therapy, earlier reimbursement negotiations could help clarify the financial assumptions behind a U.S. launch.
But participation also comes with obligations.
Under an outcomes-based agreement, a manufacturer may owe additional rebates when a treatment does not achieve specified clinical results. Those potential payments affect expected revenue and should be considered when developing financial forecasts or negotiating licensing agreements.
Following patients over time is another challenge. Gene therapies may require several years of monitoring to determine whether their benefits last.
Medicaid patients can move, change coverage or transition to commercial insurance. Collecting consistent outcomes data across different healthcare systems can therefore be difficult. Manufacturers and treatment centers need to understand their responsibilities for collecting and reporting that information.
There are also Medicaid drug rebate rules to consider, including Best Price requirements. Federal regulations provide certain flexibilities for qualifying value-based purchasing arrangements, but manufacturers must still examine how their agreements are structured and reported.
These are financial and contractual considerations, not simply administrative details.
Medicaid Is Only Part of the U.S. Market
One of the most important questions is how many patients with a particular disease actually receive their insurance coverage through Medicaid.
Sickle cell disease was a suitable starting point because Medicaid covers a substantial share of the affected population.
For other rare diseases, the coverage picture may be quite different. Commercial insurers may account for a larger share of potential patients.
That means a CMS-negotiated agreement could be valuable without resolving the manufacturer's broader reimbursement challenges.
Companies still need to evaluate commercial payer contracting, treatment-center capacity and the costs associated with administering complex therapies.
A payment agreement is of limited value if hospitals cannot provide the treatment or patients cannot reach an appropriately equipped center.
What International Companies Should Consider
The CMS model applies to manufacturers regardless of where they are headquartered. Its importance to European and other international developers comes from the decisions those companies must make when preparing to enter the American market.
A company evaluating a U.S. licensing partnership, financing transaction or product launch needs to understand when reimbursement discussions can begin, how much revenue may be subject to outcomes-based rebates and whether participating in the model makes financial sense.
It also needs to assess the patients covered by Medicaid compared with commercial insurance and determine whether treatment centers are prepared to deliver its therapy.
CMS expects to release a new Request for Applications in the coming months. The eligibility requirements, participating therapies and negotiated terms will determine how valuable the expansion becomes for individual manufacturers.
For now, the announcement gives developers another reason to examine reimbursement strategy well before commercial launch.
A promising therapy may attract considerable scientific and investor interest. Turning that promise into a sustainable business requires an equally serious understanding of how the treatment will reach patients and how it will be paid for.
Lanton Strategies International advises life-sciences companies on U.S. healthcare policy, reimbursement and market-entry strategy. We work with international businesses evaluating how American healthcare policy may affect commercialization, partnerships and investment decisions.
For companies considering the U.S. market, these discussions are worth having early.
Contact Lanton Strategies International
This article is intended for general business and policy information and does not constitute legal advice.
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