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The ADAP Crisis: Waiting for Meds

Spring 2011

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The ADAP Crisis: Waiting for Meds
AIDS Drug Assistance Programs (ADAPs) provide access to life-saving medications for low-income, uninsured, and underinsured people with HIV. ADAPs began in 1987, when Congress approved funds to help states purchase the only approved HIV drug at that time, AZT. They have since become the "payer of last resort" for thousands of people with HIV whose incomes are too high for Medicaid but who lack private health insurance. With more than 210,000 enrollees last year, ADAPs cover over a third of all people with HIV receiving care in the U.S.

To provide this access, ADAPs must balance the available resources and demand for services. This has become increasingly difficult in the past two years, as thousands of new people applied due to the recession and growing unemployment rolls. At the same time, federal funding for ADAPs has stagnated and states have not increased their contributions. A crisis has developed, affecting access to HIV medications for thousands of people across the country.


The Current Crisis

As of June 9, 2011, there were 8,230 people on ADAP waiting lists in 13 states. Eighteen ADAPs, 11 with waiting lists, have instituted additional cost-containment measures in the last year. In addition, 13 more ADAPs are considering new or additional cost-containment measures.

This is not the first crisis for ADAPs. The programs were overwhelmed by demand when highly active antiretroviral therapy (HAART) was introduced in 1996. This treatment breakthrough and the resulting increase in costs had not been anticipated during that year's federal budget process. But strong advocacy from the HIV community and irrefutable evidence of the cost-effectiveness of HAART resulted in an infusion of federal funds and several years of large budget increases, which enabled the programs to expand enrollment and formularies (the list of drugs they cover). By 2000, however, the federal focus on ADAPs waned and later increases were inadequate. Once again, ADAPs began to struggle.

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This time it was the states that came to the rescue. In 2003, a group of AIDS Directors and ADAP Coordinators formed the ADAP Crisis Task Force and negotiated with the drug industry for lower drug prices and bigger rebates. This has resulted in more than $1 billion in savings for ADAPs in the past seven years. States also dramatically increased their contributions to ADAPs, almost doubling from $171 million in 2003 to $328 million in 2008. ADAPs also benefited from the new Medicare Part D drug program in 2006, which allowed them to shift some clients to that federal program. The combination of lower drug costs and higher state funding allowed most ADAPs to struggle but survive.

But today, a convergence of factors has led to another crisis. Due to the recession that began in 2007, thousands of people with HIV have lost employment, and along with it their health insurance. Also, dramatic increases in health care costs in recent years have resulted in higher health insurance premiums, causing some employers to drop health insurance. These national problems have increased the number of people relying on ADAP. At the same time, Federal funding increases have remained inadequate, and state contributions to ADAP were reduced in 2009 as states grappled with their own budget woes. Public health initiatives, such as the national effort to expand HIV testing and linkage to care, and new HIV treatment guidelines calling for starting HAART earlier, have also contributed to pushing ADAPs to the tipping point.


Cutting Back

There are three basic ways to reduce ADAP costs: who is covered (eligibility); what is covered (formulary); and how much is paid for drugs. After years of lean times, ADAPs have trimmed and refined their programs so that only minimal savings can be found by lowering administrative costs, meaning there are no easy answers. Cost containment options are considered with input from consumers and health care providers, and implemented only after a lengthy process that struggles with conflicting goals (access and savings), the ethics of various options, and the potential for unintended consequences.

The ADAP Crisis: Waiting for Meds

ADAPs were created for people with low incomes, so a frequent response to a lack of funds is to lower the financial entry criteria. There are two problems with this approach. First, the vast majority of ADAP clients already have low incomes -- 89% make less than 300% of Federal Poverty Level (FPL): $32,670. So lowering eligibility from 400% to 300% has only a limited impact. Second, drug company patient assistance programs (PAPs), which are the final safety net after ADAPs, often require an income of 300% FPL. So, people in "higher" income brackets can be left without any form of assistance, unable to afford close to $2,000 a month for HAART. Waiting lists for enrollment, with case managers helping people apply for a PAP, has therefore become the option most frequently used by ADAPs.

Reducing an ADAP's formulary has similar problems. Antiretrovirals are the highest priority for ADAPs and consume on average 89% of their budgets. The remaining 11% is primarily spent on essential drugs for opportunistic infections, leaving only a small amount for drugs that treat HIV-related conditions and the side effects of HAART. Formulary reduction is at best a minor cost saving and may have serious implications for the quality of life of clients.

Negotiations between the ADAP Crisis Task Force and drug manufacturers have reduced the cost of antiretrovirals for ADAPs to the lowest prices for any payer in the U.S. ADAP prices for these drugs are currently below those achieved in Canada and the European Union through their universal health care systems and government pricing regulations. Further efforts to reduce costs could focus on the drug distribution system, but that can lead to tradeoffs between modest savings and limiting the ways clients receive their drugs -- with serious implications for adherence and drug resistance.


Moving Forward

There are some encouraging signs for the future. The Affordable Care Act, enacted in March 2010, aims to provide healthcare to all Americans. It takes several steps toward national health care reform over the next four years. Included are provisions that further reduce drug costs for ADAPs, as well as enabling them to take advantage of the Medicare Part D drug benefit. The drug pricing provision of the Act provided a springboard for a series of new ADAP Crisis Task Force negotiations with drug companies, which resulted in further price reductions. Beginning in 2011, ADAP payments for co-pays and deductibles for clients who are covered by Medicare Part D will count toward the client's cost-sharing requirements. This will allow them to reach the Part D "catastrophic coverage" level sooner and reduce costs to both the individual and ADAP. Previously, Part D clients had to pay more than $4,500 a year of their own money to reach this level. That was unaffordable to most people, so it was necessary for ADAPs to cover most of their HIV drug costs.

Temporary high-risk insurance pools have now opened, and ADAPs will attempt to move clients into them -- but they will most likely fill up very quickly. Beginning in 2014, health insurance exchanges will begin (see "A New Era for HIV Health Care," in this issue). Most ADAPs already help certain clients pay their insurance premiums, so they will be able to move additional clients into private health insurance and assist with the costs. In 2014, the law expands Medicaid eligibility -- tens of thousands of ADAP clients will move to Medicaid.

These reforms all bode well for the long term prospects of ADAPs. Ultimately a rebounding economy will provide increasing tax revenues, but state government revenues tend to lag and it may be several years before states are in a position to willingly direct more money to ADAPs.

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This article was provided by ACRIA and GMHC. It is a part of the publication Achieve. Visit ACRIA's website and GMHC's website to find out more about their activities, publications and services.
 
See Also
2012 National ADAP Monitoring Project Annual Report: Module One (PDF)
After Five Years, ADAP Waiting Lists Have Been Eliminated; Unmet Need and Funding Uncertainties Require Continued Commitment
More News on ADAP Funding and Activism

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