33 States Sign On to New 'Pay If It Works' Gene Therapy Deal

For the first time in her life, Serenity Cole spent Christmas without debilitating pain coursing through her arms and legs. The 18-year-old from St. Louis was making crafts with family and visiting friends instead of lying in a hospital bed, where she'd spent countless holidays before.

Serenity has sickle cell disease, a genetic condition that affects 100,000 Americans, mostly Black, and shortens lifespans by more than 20 years. The disease damages red blood cells and causes constant pain that forced her to miss school and cancel plans throughout her childhood.

In May, she became one of the first Medicaid patients nationally to receive gene therapy under a groundbreaking payment model. The treatment reprograms stem cells to produce healthy red blood cells and offers a potential cure.

Here's what makes this different: Medicaid isn't paying the full bill upfront. Under the new agreement between the federal government and drugmakers Vertex Pharmaceuticals and Bluebird Bio, participating states receive discounts and rebates if treatments don't work as promised.

That's a radical shift from how healthcare typically works, where insurers pay regardless of whether treatments help patients. The therapies cost between $2.2 million and $3.1 million per patient, not including hospital stays.

Dr. Mehmet Oz, who leads the Centers for Medicare & Medicaid Services, calls the model "a game changer." Thirty-three states, Washington D.C., and Puerto Rico have signed on since the program launched.

The timing couldn't be better. Sickle cell care already costs the health system nearly $3 billion annually, and hundreds more gene therapies are in clinical trials for rare diseases.

Maryland's Medicaid program expects to begin treating patients this month. "What we care about is whether services actually improve health," said Dr. Djinge Lindsay, the state's chief medical officer.

The Ripple Effect: This payment model could transform how America pays for expensive new treatments. Dozens of gene therapies could receive FDA approval in coming years, each potentially costing millions per patient. If drugmakers only get paid when treatments work, insurers gain financial protection while patients get better care. The model holds pharmaceutical companies accountable for their promises while ensuring people like Serenity can access life-changing treatments through Medicaid, which covers about half of Americans with sickle cell disease.

For Serenity, the results speak louder than any payment arrangement. She's planning her future without the constant shadow of pain and hospital visits that defined her childhood.

The program represents rare bipartisan support, starting under President Biden and continuing through the Trump administration. While financial terms remain confidential, the principle is clear: better outcomes for patients mean better deals for taxpayers.

As hundreds more gene therapies approach approval, this "pay if it works" approach offers a path forward that protects both patients and budgets.