It can cure deadly diseases, save long-term healthcare costs and transform lives. But the U.S. insurance system still isn’t ready to pay for it.
Imagine telling a child with sickle cell disease that a cure exists—but it’s too expensive for their insurer to cover. That’s not a hypothetical. It’s the reality of gene therapy today: a revolutionary medical breakthrough caught in the bottleneck of American healthcare economics.
Gene therapy is no longer science fiction. It’s curing diseases once considered lifelong or fatal. But instead of ushering in a new era of medicine, these treatments are crashing into old models of insurance and reimbursement—and patients are paying the price. Treatments like Zolgensma for spinal muscular atrophy ($2.1M) and Hemgenix for hemophilia B ($3.5M) are among the world’s most expensive drugs, and gene therapy spending in the U.S. is projected to average $20.4 billion annually over the next decade, split between private insurers, Medicare and Medicaid.
Despite FDA approvals, uptake remains limited—as of last fall, only about 100 patients globally had received newly approved sickle-cell gene therapies, largely due to insurer hesitancy, high out-of-pocket costs and complex prior authorization hurdles. While some payers have begun crafting installment or outcomes-based agreements, coverage remains patchy and often excludes or delays access for patients. As a healthcare attorney and former CEO of two pharmacy benefit management companies, it’s clear to me that the result is a health system where scientific innovation has outpaced financial infrastructure, leaving patients to bear the burden. It’s time for the U.S. healthcare system to stop treating gene therapy as a boutique luxury and start funding it like the essential innovation it is.
Long-Term Versus Short-Term Costs
Yes, gene therapies are expensive—some cost north of $2 or $3 million per dose. Orchard Therapeutics’ Lenmeldy, for a rare pediatric immune disorder, set a record last year at $4.25 million.
On the surface, these numbers sound outrageous. But step back and look at the broader picture. Most gene therapies are one-time treatments with the potential to head off years—sometimes decades—of chronic care, hospital stays, lost productivity and emotional toll.
A study published in JAMA found that gene therapies for sickle cell disease were cost-effective when priced below $2 million. But none cost less than that at this time. Real-world list prices of the two FDA‑approved sickle cell gene therapies far exceed the $2 million threshold: Casgevy from Vertex/CRISPR is priced at $2.2 million, while Lyfgenia from bluebird bio costs $3.1 million. However, unlike ongoing treatments, which quietly rack up millions in cumulative expenses, gene therapies offer upfront costs for long-term value. In other words, they’re expensive, but not irrationally so—especially compared to the economic and human cost of doing nothing.
A Misaligned Insurance Model
The real problem is that the American insurance model isn’t built to handle one-and-done cures. Most commercial insurers operate on an annual budget cycle, calculating costs in 12-month windows, not 20-year outcomes. That makes them hesitant to shell out millions for therapy today, even if it will save money down the line. Worse, patients frequently change health plans: If Blue Cross Blue Shield pays for your gene therapy today, but you switch to UnitedHealthcare next year, BCBS doesn’t reap any long-term savings. That makes gene therapies a tough sell to shareholders.
According to a 2023 American Journal of Managed Care survey, many private payers remain wary of covering gene therapies because of this mismatch in timelines and outcomes. They cite concerns about long-term efficacy, limited data and the financial risks of covering such high-cost treatments. Meanwhile, the self-insured employers who fund many health plans struggle to absorb the sudden budget shock of covering a gene therapy. Even if they want to provide such coverage under their self-insured plan, they might not have the financial wherewithal.
Alternatively, if participants in a fully insured employer’s health plan incur high medical costs in a given year, insurers typically raise premiums at renewal. This effectively shifts healthcare spending risk from insurers to employers over time. According to a recent study by the Kaiser Family Foundation, these cost increases resulted in a 7% average increase in health insurance premiums last year.
The Cost of Failing To Cover Gene Therapy
If we don’t fund gene therapy, we are not only turning our backs on innovation but also denying patients access to lifesaving treatments and setting ourselves up for more significant problems in the future. The most obvious of those problems is the sustained suffering of children and adults with genetic diseases. Many individuals continue to endure pain, complications and shortened lifespans, even when potential cures are available. Treatments need to be accessible in order to alleviate their suffering and improve their quality of life.
As mentioned earlier, another critical concern is the long-term financial implications of denying access to one-time gene therapies. Chronic care for conditions such as sickle cell disease can cost millions over a patient’s lifetime. By resisting the adoption of these innovative treatments, we effectively choose ongoing expenses over the wise investment of curing these conditions. This puts financial strain on families and burdens the healthcare system.
Failing to cover gene therapies also endangers the development pipeline. Consider bluebird bio: Once valued at nearly $10 billion, its financial situation became so dire that it was eventually taken private for less than $50 million. Add to this the current U.S. administration’s cuts to biotech research funding, and we are faced with a recipe for disaster. The uncertainty surrounding reimbursement and the escalating costs of drug development have led investors to perceive a lack of viable paths to profitability for gene therapies as well as for biotech as a whole. If more biotech companies fail under this pressure, we could see promising therapies vanish, depriving patients of potentially lifesaving options.
Finally, the lack of access to gene therapies exacerbates widening health disparities, particularly for communities of color. Many gene therapies target rare diseases that disproportionately affect these populations, such as sickle cell disease. Without adequate support and funding, we deepen systemic inequities in healthcare, leaving vulnerable groups without the hope of treatment.
Solving the Access Problem
Gene therapy’s benefits are genuinely transformational. To ensure that gene therapy becomes more accessible to patients, we must embrace change in our current systems.
For starters, implementing value-based reimbursement models would allow payers to link payments to therapies’ performance. We can encourage investment in these treatments by spreading costs out over time and only compensating healthcare providers if the therapy proves effective.
Moreover, establishing reinsurance pools could help mitigate the financial risk of insuring patients who require ultrarare but expensive gene therapies. These pools would allow multiple private insurers to share the burden of exceptionally high-cost claims—an approach already used in some state-based reinsurance programs under the Affordable Care Act to stabilize individual markets.
In addition, federal reinsurance backstops—essentially government-funded safety nets—could provide an extra layer of financial protection, especially for providers administering these therapies. Similar models exist in Medicare Part D’s catastrophic coverage and in state-run high-risk pools.
Another critical reform is coverage portability: if a patient switches insurers after receiving a multimillion-dollar therapy, a cost-recovery mechanism should be in place to prevent the original insurer from bearing the full financial responsibility. This would promote fairness, prevent adverse selection and encourage insurers to continue covering innovative treatments.
Finally, public-private partnerships can expand access to high-cost gene therapies for rare diseases with public health relevance. Models like the U.S. government’s support for HIV/AIDS drugs under PEPFAR or vaccine development under Operation Warp Speed demonstrate how coordinated funding can make cutting-edge therapies more broadly accessible.
We can’t afford to let our insurance models lag behind our medical capabilities. If we keep treating gene therapy as too expensive to cover, we’ll never get to the point where it saves lives and money. The healthcare system’s job is not to reward short-term cost-cutting but to support treatments that cure disease, ease suffering and build a healthier society.
Gene therapy does all of that. Now, we have to make sure people can get it.
