Treatment Issues: Newsletter of Experimental AIDS Therapies - Volume 16, Number 9, September 2002
By the Save ADAP Committee AIDS Treatment Activists Coaliton (ATAC)

The AIDS Drug Assistance Program (ADAP) is a federally funded program intended to provide access to HIV/AIDS treatments for low-income people who are uninsured or lack adequate prescription drug coverage. The program is administered by the states and, in some cases, additional state funding augments basic drug coverage. Because the extent of coverage offered is left to the states to determine, various programs may differ considerably in the number of drugs on the formulary, ancillary services covered, and in financial and clinical eligibility criteria.

An estimated 85,000 people are currently turning to ADAP for their HIV medications. ADAPs serve a very diverse population of people living with HIV. Almost 80% of ADAP clients have incomes at or below two-times the Federal poverty level (which only comes to about $18,000 per year for a person living alone). The majority of ADAP clients are people of color with African Americans making up about one-third, and Hispanics about one-quarter of ADAP clients. There has been a 10 percent increase in the number of clients served during the past year and similar increases are expected in the years to come.

Nationally, ADAP is facing a current budget shortfall of $82 million. The shortfall is largely a result of several consecutive years of under-funding compounded by increasing demand and escalating drug prices. Many state ADAPs across the country are experiencing severe financial crisis, resulting in limits to treatment access. Recently, several states have reported turning to some kind of restrictive measure such as waiting lists. These include Alabama, Georgia, Idaho, Kentucky, Maine, North Carolina, Oregon, South Dakota, Texas, Washington, Wyoming and Guam. There are over 600 people on the waiting list for antiretroviral treatment in North Carolina alone, with an estimated 1000 people on waiting lists nationwide. In addition to waiting lists, some states have capped enrollment or have placed limits on the number of prescriptions a client may fill each month. Other states, including Mississippi and New York, are reporting that they may be forced to implement restrictions soon.

If the current fiscal crisis continues, states may seek to control costs in ways that threaten the health of both the program and the thousands of Americans who rely on it. For example, some states have delayed adding pegylated interferon, an important new drug for hepatitis C treatment, to their formularies. The expected approval next year of T-20, a new class of HIV inhibitor likely to be of importance to people with multiple drug resistance, will further stretch ADAP budgets. Some ADAP medical advisory boards are evaluating dropping certain medications currently provided in order to further reduce costs. Some states may also be considering requiring co-pays or medical pre-authorization plans. These measures could put ADAP services completely out of reach of its most vulnerable clients and create additional barriers to access for many others.

What is Driving the ADAP Crisis?

• Inadequate federal funding. ADAP has not received adequate funding increases from Congress the past few years. While ADAP appropriations increased by 12 percent from 2000 to 2001, the number of clients increased by 10 percent and the cost of drugs increased by 16 percent during the same period. ADAPs cannot keep pace with rising costs and service demands at the current funding level.
• Inadequate state funding. Sixteen states do not contribute at all to ADAP and others provide inadequate contributions. Continued weakness in the national economy suggests that additional funding from states that have had more generous programs may be frozen or even scaled back.
• Increases in drug prices. Monthly drug expenditures by ADAPs rose by 320 percent from 1996 to 2001. Some of this was due to adding additional drugs to formularies, but much of the increase reflects steeper purchase prices. Several drug companies introduced sharp price hikes at the beginning of 2002, although some have since announced that they will freeze prices for one or two years for ADAP programs.
• Increase in outreach and testing programs across the country. The Ryan White CARE Act reauthorization of 2000 provided for increased outreach and testing programs with the goal of helping to identify new HIV infections earlier and facilitate entry into care. The success of these efforts has translated into increased client caseloads that current levels of ADAP funding cannot meet.
• Increase in the number of people testing positive for HIV and seeking ADAP services. New infections continue to occur at a rate of approximately 40,000 per year in the U.S. Easier testing methods and more widely available testing has increased the number of people learning their HIV status, and better service coordination now ensures that more people are being directed into the care system offered by ADAP. Furthermore, people now remain in the program longer because they are staying healthy and living longer due to the drugs.

What Must be Done to End the Crisis?
Congress must appropriate an increase of $162 million in federal funding for ADAP for fiscal year 2003 (October 1, 2002 to September 30, 2003). This figure includes the current $82 million shortfall plus an $80 million increase needed in the next fiscal year to provide adequate financial relief to ADAP.

The President's goal, as articulated in his FY2003 budget, of reducing the number of new HIV infections by 50 percent by 2005, cannot be achieved without a sufficient funding commitment on the part of the federal government. There is a direct fiscal and epidemiological relationship between testing, surveillance, care and treatment, individual longevity, and reduction in new infections. The national response to AIDS carried out through the various federal agencies is a linked strategy. Shortfalls in one program area inherently impact capacity and success in other program areas.

Although funding for the CARE Act has grown over the past ten years, federal and state funding have not kept up with growing demand for services. The states' Ryan White care and treatment programs are safety net programs. They are the payer of last resort and provide services to those most in need. Without an increase of, at minimum, $162 million in FY2003, states will be unable to maintain their existing programs, much less enroll new clients.

The New York ADAP Crisis
New York State is facing a $16 million shortfall in the current fiscal year due to inadequate increases in the Federal ADAP appropriation in the Ryan White CARE Act. This means that the projected expenditures for the year exceed the annual money promised by Congress, and even by using savings or redirected funds from other state sources to temporarily bridge the gap, restrictions on access to essential AIDS/HIV drugs and services are looming.

NY ADAP continues to grow at a consistent rate of more than $20 million a year, due to increasing enrollment (caused by new infections and people living longer), increasing utilization of drugs and services (to treat and monitor HIV disease and the side effects of medications) and ever-increasing drug prices.

NY ADAP has had a moratorium on new drugs and services since November 2000 in anticipation of this pending crisis and has taken measures to slow growth and accumulate savings that can be used as a short-term stopgap. However this moratorium has prevented the program from offering coverage for the new standard of care for hepatitis C infection, pegylated interferon plus ribaviran.

The moratorium may become critical next year if ADAP is unable to cover the important new antiretroviral drug T-20, expected to receive FDA approval early in 2003. A preliminary estimate puts the cost of adding T-20 to the NY ADAP formulary at about $12 million the first year. All of these factors add up to an additional $48 million needed for New York's fiscal year 2003.

NY ADAP is redirecting funds from other HIV programs to close the budget gap this year, and has requested increased funding from the Title I HIV Planning Councils of New York City, Lower Hudson, Long Island and Dutchess County. This approach is undermining the HIV/AIDS infrastructure by drawing funds away from other necessary support services that persons living with HIV/AIDS need to be able to enter into care and treatment.

NY's ADAP budget gap threatens significant reductions in services for 2003. The specific reductions will be identified through a prioritization process that has already begun. These cost saving measures represent the deterioration of a health care infrastructure that has taken years to build, and erects additional barriers to care for some of the state's most vulnerable citizens with HIV/AIDS.

Possible cutbacks could include:

• Removing categories of drugs or services covered, such as lipid-lowering drugs or anti-depressants.
• Mandatory dispensing of generic equivalents.
• Establishing a restricted formulary of preferred drugs.
• Expanding prior authorization plans that require approval before a drug can be dispensed.
• Cutting back of payments to pharmacies and clinics.
• Requiring co-payments from clients to obtain drugs.
• Tightening medical or financial criteria for obtaining services.
• Establishing waiting lists or capping the number of clients in the program.

ADAP was designed to fill the gap between people who qualify for Medicaid and those who can afford private insurance. This gap is widening. In New York, the majority of ADAP clients make less than 200 percent of the Federal poverty level — the group of people most affected during an economic downturn. Since we have not experienced this kind of economic climate since ADAP was first created, it remains to be seen if the steady trend of increasing enrollment will remain the same or spike sharply up as the crisis deepens.

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