For millions of patients suffering from the ravages of debilitating diseases, treatment may have just gotten a bit easier. On August 5, the Centers for Medicare and Medicaid Services (CMS) announced  that it would soon bolster payments for gene therapies.  These new cures target illnesses without harming patients. Unlike most government funding and reimbursements, upfront payments for gene therapies can drastically reduce taxpayer costs by eliminating long-term treatment costs. By adjusting financing and working with regulatory agencies to reduce barriers to access, CMS can pave the way for a healthcare revolution.

Gene therapies, which target diseases by reprograming cells via added genetic material, can cure devastating diseases in just a few (or in some cases, singular) doses. For instance, the recently-approved gene therapy Zolgensma can cure a rare, debilitating disease known as spinal muscular atrophy (SMA) in just one dose. The price-tag is a hefty $2.1 million, making it the most expensive drug on the global market. But, even this exorbitant figure is a fraction of the cost of existing alternatives. SMA sufferer Nathan Yates notes, “The first two years of treatment with Spinraza cost around 50% of one Zolgensma infusion, but Spinraza treatments must continue for life at a cost of $375,000 each year. The four initial loading doses of Spinraza in the first year of treatment total $750,000. Over a 10-year period, the cost-effectiveness of Zolgensma is clear.”

A federally-insured patient taking Zolgensma would thus save taxpayers nearly $400,000 per year by around their sixth birthday, no small sum considering there are tens of thousands of SMA sufferers across the country. But these savings could only materialize if the federal government properly reimburses these treatments and approves their use in the first place.

On August 5, CMS made funding gene therapies easier by increasing “new technology add-on payments” (NTAP). Medicare debuted NTAP nearly 20 years ago to help defray the costs of promising, newly-approved treatments to hospitals across the country. If CMS judges that particular medications significantly benefit hospitalized patients but aren’t adequately reimbursed, the agency can grease the wheels and offer a bonus reimbursement. These bonus rates haven’t changed much; the previous NTAP amount was fixed at 50 percent for more than a decade despite the proliferation of high-cost, life-saving medications.  With the August 5^th announcement, NTAP payment levels to hospitals will now increase from 50 to 65 percent over the next two years.

Improving the Food and Drug Administration (FDA) approval process, however, has been more of a mixed-bag. On the surface, the agency appears to recognize the importance of keeping life-saving gene therapies on the market. Even as news recently emerged that “a small portion” of Zolgensma’s data was faulty, FDA officials stood by their approval decision and noted the product’s demonstrated effectiveness in clinical trials.

But there’s a deeper issue with the FDA’s approval process that may pose risks for future gene therapies. For decades, the agency has emphasized the importance of traditional clinical trials, complete with a large study participant population in order to demonstrate statistical significance. This naturally poses a challenge for gene therapies, which are usually tailored toward rare diseases. Study participants are hard to come by, and even if studies contain a hundred participants, it may be hard to meet the efficacy thresholds determined by the FDA. There have been suggested alternatives to the status-quo, such as Bayesian analysis that requires fewer human volunteers and relies heavily on simulations and computation. The agency seemed lukewarm to these alternatives in a 2010 guidance document, but reaffirmed the importance of traditional testing. Absent more explicit FDA backing, few drug manufacturers are willing to put billions on the line for a probable FDA rejection.

Gene therapies carry tremendous potential, but this upside can only be realized via comprehensive, coordinated reform of federal policies. The FDA should open the door to computational analysis and allow products targeting small populations to have a chance at approval. And if CMS makes their NTAP boost permanent, taxpayers (and patients) will reap considerable benefits. Sensible reforms can improve the lives of millions of patients, at a minimal cost.