Medicaid's Next Gene Therapy Move: What International Developers Should Know

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.

Reference materials

• CMS, Cell and Gene Therapy Access Model Expansion Announcement, October 27, 2026

• CMS, Cell and Gene Therapy Access Model

• CMS, First Evaluation Report, 2026

• CMS, Cell and Gene Therapy Access Model FAQs

Ron Lanton Discusses U.S. MFN Pricing Agreements with APM Market Access

In a September 23 article for APM Market Access, reporter Jen Brogan spoke with Lanton Strategies International President Ron Lanton about the differing terms of the U.S. government's most-favored-nation (MFN) drug pricing agreements with Eli Lilly and Pfizer.

The discussion focused on the challenges of implementing MFN pricing when individual agreements apply different methodologies, exclusions and conditions. The treatment of high-spend GLP-1 medications is one example of how these differences can complicate the assessment of potential savings.

Lanton also discussed the implications for state governments, including provisions that may require states to waive certain pricing restrictions to participate in negotiated arrangements.

As the administration continues to pursue MFN pricing, understanding which drugs are covered, how prices are determined and what conditions apply will be important for manufacturers, payers and state Medicaid programs.

Read Jen Brogan's full article in APM Market Access: Differing U.S. MFN deals make 'one consistent pricing policy' difficult – lawyer.

Most-Favored-Nation Pricing Is Becoming a Global Management Problem

For pharmaceutical companies, the latest U.S. drug-pricing developments are getting harder to look at one at a time.

President Trump announced that all 50 states, Washington, D.C. and Puerto Rico intend to participate in the GENEROUS Medicaid model. The program is designed to give Medicaid access to net prices for certain medicines that are comparable to prices paid in selected foreign countries.

At the same time, newly released contract language involving Pfizer reportedly shows that the company agreed to share with the Department of Health and Human Services a portion of additional net revenue generated when prices for certain medicines increase outside the United States.

Those two developments matter together because they show how pricing decisions made in Europe and other markets can affect U.S. reimbursement and U.S. government agreements.

GENEROUS Brings International Pricing Into Medicaid

The immediate importance of GENEROUS is its reach. Every state has now expressed interest in participating in a model that uses international pricing as part of the way Medicaid rebates are calculated for participating medicines.

That does not mean every drug suddenly gets an international reference price. Manufacturers still have to participate, products will differ, and many of the details matter. But there is enough here for management teams to pay attention.

A price negotiated in Europe or another reference market may affect the economics of the same product in the United States. That makes it harder to treat global pricing as a collection of separate country-by-country decisions.

The Pfizer Agreement Adds Another Layer

The Pfizer disclosure makes the issue more interesting.

According to the reported contract language, Pfizer must share with HHS part of the additional revenue generated when prices for certain medicines rise outside the United States. The public version does not reveal the percentage, the covered medicines or several other important terms.

Even with those gaps, the structure is worth watching.

A higher price overseas could improve revenue in that market while also creating a separate financial obligation in the United States. That is different from a traditional reference-pricing model, where the main concern is how a foreign price may affect a U.S. benchmark.

Here, a commercial decision in one country may create an economic consequence somewhere else.

This Is a Management Issue

That is why this is becoming more than a pricing issue.

The practical management question is whether the company understands which decisions made outside the United States can affect its U.S. economics.

That requires market access, finance, legal, government affairs and commercial teams to work from the same picture. Each group may be making a reasonable decision on its own, but problems can arise when those decisions are made without understanding what they mean for another market.

A locally successful pricing decision can still create an unexpected consequence elsewhere.

What Management Should Be Looking At

Companies should start by mapping their major products against the pricing arrangements that could matter in the United States. Management should understand which international prices could affect GENEROUS or other U.S. pricing arrangements, which products are covered by company-specific agreements, and what happens when the price of a medicine changes in another market.

There should also be a clear process for bringing pricing, legal, finance, government affairs and commercial leadership together before a significant pricing decision is made.

The goal is not to predict every future policy change. It is to make sure a decision in one market does not create an expensive surprise in another.

The Bigger Picture

There is still a lot we do not know. Many of the pharmaceutical agreements being negotiated with the administration remain confidential, and some of the most important commercial terms have not been made public.

But companies already have enough information to see the broader issue.

International pricing is becoming more closely tied to U.S. reimbursement. GENEROUS does that through Medicaid rebates linked to prices in other countries. The Pfizer agreement reportedly adds another connection by tying increases in overseas revenue to payments back to HHS.

For executives, the question is becoming less about what price should be negotiated in a particular country and more about what that decision does to the economics of the product across markets.

That is the issue management teams should be thinking about now.

About Lanton Strategies International & Lanton, Lanton and Sosa Law, PLLC

Lanton Strategies International works with executives and organizations on policy, market access, government affairs and strategic issues affecting investment, commercialization and growth across the United States and Europe. We help leadership teams understand what policy developments mean for their business and determine practical next steps.

For legal and regulatory matters, Lanton, Lanton & Sosa Law PLLC advises companies on issues affecting healthcare, life sciences, technology, commercialization and business strategy.

This article is provided for informational and educational purposes only and should not be relied upon as legal, investment or other professional advice. Reading it does not create an attorney-client relationship.