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The ADAP Crisis: Waiting for Meds

By Lanny Cross

Spring 2011

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.

Fighting for Funding

HIV advocates constantly monitor the health of ADAPs and mobilize when access is threatened, at both the state and national level. Advocacy can take many forms and have varied goals, ranging from a national solution to the ADAP crisis to brokering stopgap measures.

The ADAP Crisis: Waiting for Meds

The ADAP Coalition brings together national HIV advocacy organizations and drug manufacturers to work together for increased federal funding of ADAPs. These efforts had significant success from 1996 to 2002, but since then advocates have been unable to persuade Congress or the President to provide increases that meet the growing demand. This work has kept ADAP in the spotlight, however, and provided some increased funding, even when other health programs were flat-funded. In the summer of 2010, as ADAP waiting lists grew, President Obama redirected $25 million to ADAPs in crisis. This led to hundreds of clients being removed from waiting lists, but the amount was inadequate and waiting lists have rapidly grown.

The Fair Pricing Coalition (FPC) is a group of community treatment activists advocating for fair and sustainable pricing of HIV and hepatitis drugs in the U.S. The FPC also works with drug companies to ensure that adequate co-pay and patient assistance programs are in place. In January, the FPC brokered agreements that will allow approximately 6,500 Floridians to continue to receive their HIV medications during that state's budget crisis. Florida's ADAP was expected to exhaust all available funds and shut down in early February if an emergency solution was not found. The agreement between Welvista (a non-profit pharmacy), drug companies, and Florida's ADAP provided uninterrupted medications to 6,500 people, who switched to Welvista until April 1, 2011, when new federal ADAP funds became available. The transfer enabled Florida's ADAP to provide drugs to its remaining 3,500 clients for the rest of the fiscal year.

A strong and well organized advocacy effort was initiated in California in October 2009, which was able to turn back a proposed devastating reduction in state funding in the state's ADAP. Despite California's overwhelming fiscal crisis, $56 million in new state funds were appropriated for ADAP. In North Carolina, a similar grassroots effort resulted in an increase of $15 million. In New Jersey, advocacy reversed the governor's plan to remove 500 clients from ADAP. On the other hand, South Carolina reduced ADAP funding by 60% in 2010, and Minnesota's 2009 contribution of $4.5 million was eliminated in 2010. Despite budget deficits estimated to be more than $142 billion, state governments generally responded generously to the ADAP crisis, increasing the national state contribution level to $346 million, a 57% increase from 2009 to 2010. As shown by the setbacks in Minnesota and South Carolina, however, advocacy efforts must never be allowed to rest on past successes.


The Politics of ADAP

The recession and the 2010 elections turned the tone of political discourse very nasty. Radio and television pundits railed against government spending and taxes, vilifying government programs that serve the needy. Many of those who escaped the worst impacts of the recession are still suffering from financial anxiety and have turned to a political ideology that puts self-interest ahead of the general good and the needs of those less fortunate. Racism, bigotry, and homophobia are increasingly being exploited for political gain and are reflected in calls for devastating budget cuts to health and human services for low income and minority populations.

This political environment may seem overwhelming, but the HIV community must continue to advocate for essential care and services. Advocates must become more effective in their tactics and stand united against those who would slash and burn public health programs like ADAP. The HIV community can assist in efforts to keep ADAPs open by becoming involved with local AIDS service and advocacy organizations. These organizations must keep local communities informed about the status of their state ADAP and find ways to work with others to increase ADAP resources. Letter-writing campaigns and visits to elected officials make a real difference in funding levels, and coordinated efforts have the most impact.

On an individual level, if someone needs access to HIV medications he or she should apply to ADAP, even if there is a waiting list. While the idea of being on a list can be discouraging, it documents the need for additional funding and will position the person for eventual enrollment. The application process should bring a referral to an AIDS service organization and a case manager to help with applying to PAPs for medications. These programs can provide support and access to other services, as well as opportunities to participate in advocacy efforts.

Lanny Cross served as the NYS ADAP program director for 15 years and is a consultant on ADAP issues to state and national organizations.




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