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ADAP in Peril

Summer 2004


"Hundreds Waiting for AIDS Drug Assistance in Colorado."

"Three People With HIV/AIDS Die While on West Virginia ADAP Waiting List."

"North Carolina Aid for HIV Will Run Short: State to Put People on a Waiting List."

These are just a few of the headlines that have been published in recent months in newspapers throughout the U.S. They tell a bleak story: a growing number of Americans living with HIV/AIDS are being denied access to HIV treatments, which can mean the difference between life and death. Sadly, this situation appears to be worsening and our national leaders have not shown the political will to solve the problem. How did we get to this point, and what can be done to rectify the situation?

Anti-HIV Drugs: Costs and Consequences

The introduction of highly active antiretroviral therapy (HAART) in 1996 created a revolution in HIV treatment that has resulted in major reductions in HIV-related morbidity and mortality. A study published in the October 18, 2003 edition of The Lancet found that HAART has reduced AIDS-related death rates by more than 80% and increased life expectancy for HIV-positive people taking these drugs to more than ten years.

These treatments also come at a high price. The average cost of a year's supply of antiretroviral therapy is over $12,000, a price that is well beyond the reach of low-income individuals and others who are uninsured or underinsured. Government programs have therefore been critical in ensuring access to these medications.

One of the most vital of these programs is the AIDS Drug Assistance Program (ADAP), which provides HIV-related drugs to those who otherwise could not afford them. This program is a lifeline for thousands of low-income people living with HIV/AIDS. For those who lack adequate health insurance and do not have access to other government programs such as Medicaid, ADAP is generally the only option available to obtain lifesaving anti-HIV medications.

A Brief Primer on ADAP

ADAP was established in 1987 as an emergency program to provide federal support to states to help provide drugs (especially the newly discovered AZT [zidovudine, Retrovir]) to individuals living with HIV/AIDS who could not otherwise afford these treatments. This drug access program was incorporated into Title II of the Ryan White CARE Act, which was passed in 1990.

ADAPs exist in all 50 states, the District of Columbia, and six other American territories and associated jurisdictions. The program is designed to pay for HIV-related treatments for people with HIV/AIDS who do not have adequate insurance coverage. It covers those who are not eligible for Medicaid and lack adequate private health insurance. Like other Ryan White CARE programs, ADAP serves as the payer of last resort, meaning that the program is accessed only if no other option exists for paying for these drugs.

Each state administers its own ADAP and, under the CARE Act, states are given wide latitude over the specific nature of the program. States control decisions about which drugs are covered by the program (the formulary) as well as the eligibility requirements and administrative procedures. As a result, ADAPs vary tremendously from state to state. Financial eligibility requirements range from 125% of the federal poverty level in some states to 400% or more of the federal poverty level in others. In 2003 the number of drugs covered by different ADAPs ranged from 18 to 474.

While ADAP is federally funded through Title II of the Ryan White CARE Act, the majority of states also contribute their own resources to augment these federal dollars. Thirty-six states contributed funds to their ADAPs in 2002.

It is estimated that ADAPs served 136,000 unduplicated clients in 2003, representing about 30% of people living with HIV/AIDS who are receiving HIV care in the U.S. The National ADAP Monitoring Project found that ADAPs served more than 85,000 clients during a single month, June 2003. Most of these clients are low income (over 80% are at or below 200% of the federal poverty level) and a majority (60%) are people of color.

Mounting Pressure

Funding for ADAP has not kept pace with the growth in the demand for the program. The need for ADAP is driven by three key factors: 1) the number of people living with HIV in the country who are eligible for the program, 2) the number and types of drugs needed by ADAP participants, and 3) the price of the drugs prescribed. All three factors have increased dramatically over the years and continue to move upwards.

Because of the treatments now available, people with HIV/AIDS are living longer than ever before. This, however, has meant that there is a growing number of people living with the disease who need treatment and services. The National ADAP Monitoring Project estimated that the number of ADAP clients grew by 154% between 1996 and 2002. At the same time, combination therapy has grown more complex, with many people shifting from triple-drug regimens to combinations that include four or more drugs.

Rising prescription drug costs have also played a role in straining ADAP budgets. During some recent years, price hikes have consumed most of the modest funding increases advocates have been able to obtain at the federal level. This has left little funding available to cover the growing number of people who are eligible for the program.

Several years ago, as the ADAP crisis started to escalate, several pharmaceutical manufacturers, led by Pfizer, Inc., agreed to freeze their prices for drugs administered through ADAP. Most companies have recently abandoned this commitment and have again begun to impose significant price increases. For example, GlaxoSmithKline (GSK) instituted a 4.9% increase on all of its pharmaceuticals in January of this year, and ADAP was not spared from this price hike. Similarly, Boehringer Ingelheim added a 4.5% increase to nevirapine (Viramune), a non-nucleoside reverse transcriptase inhibitor (NNRTI), the same month. And Bristol-Myers Squibb (BMS) added a 4.8% price increase to various drugs in March, the second price hike in less than seven months. The cost of BMS's atazanavir (Reyataz), a protease inhibitor (PI), is now 9.2% higher than it was when the drug was approved in August 2003. The cost of GSK's fosamprenavir (Lexiva), another new PI, is now 9.3% higher than when it was approved in November 2003.

In another stunning development, Abbott recently raised the price of ritonavir (Norvir) by 400% (see related story in this issue). Although the company has promised not to apply this increase to ADAPs, the price hike will inevitably drive up the cost of providing HIV care. The health insurance industry is likely to pass on the higher costs that result from this price increase in the form of higher premiums and co-pays. Not only will this increase the burden on individuals who are already struggling to meet rocketing cost-sharing obligations, but it will also almost certainly force more people to turn to public programs, such as ADAP and Medicaid, for assistance. In addition, those ADAPs that cover private co-pays or premiums for people who cannot afford them (allowing these individuals to stay in the private health care system) could experience an immediate negative impact. Furthermore, Abbott has not committed to maintain the lower price for ADAPs in the event that ritonavir is reformulated. ADAPs will therefore be at great risk of having to pay much higher prices for a newer version of the drug, placing further financial strain on these programs.

Federal Funding Falls Short

As these pressures on ADAP have escalated, federal funding has remained stagnant. ADAP funding has never been sufficient to meet the needs across the country, but in recent years the gap between the need and actual funding levels has ballooned into hundreds of millions of dollars. In fiscal year (FY) 2004, it was estimated that $214 million in additional funding was needed to meet the needs of those eligible for the program, but the final increase provided totaled a mere $35 million. For FY2005, AIDS treatment experts estimate that an additional $217 million will be needed to maintain access to anti-HIV medications and minimize limitations on state ADAPs. But President George W. Bush's budget includes only a $35 million increase.

Why have funding increases for ADAP become so difficult to obtain in recent years? In reality, all HIV/AIDS programs (and many other health-related programs) have been severely underfunded in recent years. President Bush and his administration have not prioritized domestic AIDS issues since taking office in 2000. In fact, Bush was the first president to propose flat funding for the Ryan White CARE Act, which funds ADAP and a range of other HIV care programs. The president's budget flat-funded these programs in both FY2001 and 2002, and provided only a slight increase for ADAP in both FY2003 and 2004.

President Bush and Congress have had other priorities. In particular, the push for substantial tax cuts severely restricted the dollars available to fund critical health programs, including HIV/AIDS programs. The national economic downturn has also resulted in significant reductions to the federal treasury. And, after the events of September 11, 2001, spending on "homeland security" and the "war on terror" -- including the military campaigns in Afghanistan and Iraq -- increased dramatically, leaving little additional revenue available for other important priorities. As a result of tax cuts and soaring defense expenditures, the federal deficit will reach nearly $500 billion this fiscal year, placing enormous pressure on Congress to reel in spending.

As a result of all of these factors, it is extremely difficult for advocates at the federal level to do anything more than protect existing funding for most HIV programs while securing incremental and extremely insufficient increases for ADAP. Worse yet, state governments have also faced massive budget deficits due to the weak economy, which has hampered states' ability to make up for shortfalls at the federal level.

Federal ADAP Funding

Before FY1996, ADAP did not have an independent budget line item. States individually determined what portion (if any) of their Title II CARE Act funding would be used for ADAP and combined this with state resources, if they provided any state-specific funding for the program, and, in some jurisdictions, with other federal CARE Act dollars.

In FY1996, due to the fiscal pressures related to combination therapy, President Bill Clinton and Congress agreed to appropriate $52 million specifically for ADAP. Often referred to as the "ADAP Supplemental," this specific federal funding grew markedly for several years due to increasing demand for the life-saving combination HIV/AIDS therapies that were brought to market during this period. (See chart below.) In recent years, the growth of funding for all portions of the CARE Act has slowed and ADAP appropriations have been far short of the funding levels needed for the program.

ADAP Supplemental Funding FY1996-2004

ADAP Supplemental Funding FY1996-2004

States Respond By Restricting Access

As a result of this funding crisis, many states have had to impose harsh restrictions on their ADAP programs. These measures have included capping enrollment, tightening financial eligibility criteria, putting individuals who need drugs on waiting lists, instituting per capita expenditure limits, restricting access to certain drugs, and/or dramatically reducing the number of drugs available through program formularies. Such changes have resulted in reduced access to anti-HIV drugs for many people living with the disease.

The number of states imposing such restrictions, and the number of people affected, is growing. A review of state programs in May 2004 found that 1,545 individuals were on ADAP waiting lists throughout the country, a startling increase from the 791 individuals who were on waiting lists as of January 2004.

The May review also found that 14 states, including Alabama, Colorado, North Carolina, and Washington, had implemented at least one or more program restrictions due to a lack of sufficient resources. At least ten other states, including California, New Jersey, and Texas, may impose new or additional restrictions during FY2004.

These waiting lists have meant that hundreds of people are being denied access to life-saving HIV drugs. Several people have reportedly died while waiting to enter the program. The situation appears to be growing worse, and more lives are being put at risk as a result.

It should also be noted that while waiting lists provide one indicator of the unmet need for ADAP services, they do not reflect the full level of need for the program. Some people who receive medications through ADAP may not be given as much treatment as they require, particularly in states with limited drug formularies.

California Advocates Prevent Cutbacks
California Advocates Prevent Cutbacks

The ADAP crisis has been felt keenly in California. For the first time, the state government proposed major limits to the program, which could have resulted in anti-HIV drugs being denied to thousands of Californians living with the disease.

In December 2003, as part of a package of $1.9 billion in cuts he hoped to make mid-way through the 2003-2004 budget year to address a massive state deficit, Governor Arnold Schwarzenegger proposed that enrollment in ADAP be permanently capped at its current level of 23,900 enrollees. While about 300 ADAP clients leave the program each month and could be replaced with new enrollees, it is estimated that the governor's proposal would result in approximately 120 people being placed on a waiting list for anti-HIV medications every month. Fortunately, the legislature did not act on the governor's mid-year ADAP proposal and the program has not been capped at this time.

In January 2004 Governor Schwarzenegger released his first state budget proposal in the face of an alarming state deficit of $14 billion. Although his draft budget for FY2004-2005 did not contain significant cuts to state HIV/AIDS services, Schwarzenegger failed to provide additional funds needed to assure full access to California's ADAP and again proposed a cap on enrollment in the program.

The governor's FY2004-2005 budget proposal includes $207 million for ADAP, including federal and state funds as well as rebates from pharmaceutical companies. Each year for the past several years, California's ADAP has received increased funding to meet annual growth in enrollment, increased usage of drugs by clients, and rising drug prices. For FY2004-2005, ADAP needs to be funded at $232 million -- an increase of $25 million over the governor's budget proposal -- to prevent the imposition of a waiting list.

Fortunately, ADAP advocates in California mobilized aggressively to secure adequate funding for this life-saving program and stave off an enrollment cap. Over 700 people with HIV/AIDS and their supporters traveled to the state capital on March 8, 2004, to demonstrate against an ADAP waiting list and in favor of additional funding for ADAP.

That same day the Senate Budget Subcommittee on Health responded to the pleas of ADAP clients and advocates. First, the subcommittee approved some minor changes to the program that reduced spending by $800,000 and used that money to offset the $500,000 the governor said would be saved by capping ADAP enrollment. To cheers from ADAP advocates in the packed hearing room, the subcommittee then affirmatively rejected the enrollment cap. The subcommittee also acknowledged that ADAP has accumulated $21 million from rebates paid by pharmaceutical companies on its purchases. It allocated $15 million of that amount to ADAP and used the remaining $6 million to help address the state's budget deficit. Advocates were confident there would be $10 million in additional rebate money available during the coming budget year to assure that California's ADAP has all the funds it needs.

In response to the community's demands and the legislature's actions, Governor Schwarzenegger recently agreed to include $27 million in additional funding for ADAP in his revised budget proposal, which was released on May 13. This prevents an enrollment cap in California and assures unlimited access to medications for people now in the program for the coming fiscal year.

BETA readers who would like more information about California's ADAP or who want to join in ADAP advocacy should contact Dana Van Gorder at 415-487-3099 or sign up for the San Francisco AIDS Foundation's HIV Advocacy Network (HAN) at

The ADAP Watch

AIDS Drug Assistance Programs (ADAPs) provide life-saving HIV treatments to low income, uninsured, and underinsured individuals living with HIV/AIDS in all 50 states, the District of Columbia, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, three U.S. Pacific Territories (Guam, the Commonwealth of the Northern Mariana Islands, and American Samoa), and one Associated Jurisdiction (the Republic of the Marshall Islands). Federal funding for ADAPs in FY2003 and FY2004 has been insufficient to meet the needs of those eligible and has led to ADAP access restrictions. Eleven ADAPs have a current waiting list. As of May 14, 2004, there were 1,545 individuals on ADAP waiting lists nationwide. Six ADAPs have instituted capped enrollment and/or other cost-containment measures since April 2003. Ten states anticipate the need to implement new or additional program restrictions during FY2004, which ends March 31, 2005.

ADAPs with waiting lists* (as of May 14, 2004)

Alabama: 351 on waiting list (FY1999)
Alaska: 9 on waiting list (FY2003)
Arkansas: 1 on waiting list (FY2004)
Colorado: 297 on waiting list (FY2003)
Idaho: 5 on waiting list (FY2000)
Iowa: 3 on waiting list (FY2004)
Kentucky: 113 on waiting list (FY2002)
Montana: 4 on waiting list (FY2002)
North Carolina: 685 on waiting list (FY2001)
South Dakota: 43 on waiting list (FY2000)
West Virginia: 34 on waiting list (FY2002)

* Fiscal year in parentheses indicates when waiting list was initially instituted

ADAPs with other cost-containment strategies in place

Colorado: reduced formulary
Idaho: monthly expenditure cap
Indiana: capped enrollment
Oklahoma: reduced formulary and annual expenditure cap
South Dakota: annual expenditure cap
Washington: increased and expanded cost-sharing (effective 4/1/2004)

ADAPs anticipating new/additional restrictions during FY2004

New Hampshire
New Jersey
New Mexico
South Carolina

Adapted from NASTAD, a non-profit national association of state health department HIV/AIDS program directors who have programmatic responsibility for administering HIV/AIDS health care, prevention, education, and supportive services programs funded by state and federal governments. If you would like to receive The ADAP Watch, please send your e-mail address to Beth Perry at

How to Address This Crisis?

There are several options for ensuring access to anti-HIV drugs throughout the U.S. Some can be accomplished quickly, while others require a long-term strategy. Each of these avenues must be pursued aggressively to assure broad access to HIV/AIDS therapies now and in the future.

Increase Funding for ADAP

The immediate and obvious solution would be a major infusion of federal dollars for ADAP. Federal AIDS advocates are pushing hard to significantly increase ADAP funding in both the current and the coming fiscal year. Key members of Congress and AIDS advocates are pushing for an emergency appropriation of $122 million in additional resources for ADAP in FY2004, as well as the needed increase of $217 million for FY2005.

Given the federal budget deficit and the competing priorities discussed above, it remains unclear how successful these efforts will be. Members of Congress and the administration need to hear an outpouring of support from people throughout the country about the importance of these funding requests. Unless constituents implore their members of Congress to address this issue, it is unlikely that significant funding increases will be obtained anytime soon.

Get the Best Price

The other logical way of reducing costs and stretching available ADAP dollars is to minimize the costs of HIV treatment. As noted previously, many anti-HIV drugs used in combination regimens are extremely expensive and prices for these medications continue to rise.

As access to HIV treatment is increasingly threatened and denied, the AIDS community must rely on its pharmaceutical industry partners to exercise restraint in profit-making. Significant price increases, such as the massive hike for ritonavir, are unjustifiable and severely limit the ability to ensure access to HIV care for all those in need. The industry must be urged to rein in prices for HIV medications to ensure broad access to these drugs.

Another option related to drug pricing is to secure additional rebates and/or price reductions from pharmaceutical manufacturers to help sup-port ADAP. In 2003 the ADAP Crisis Task Force of the National Association of State and Territorial AIDS Directors (NASTAD) was successful in reaching agreements with all eight of the major pharmaceutical companies that manufacture antiretrovirals to provide financial relief for ADAP. Annual savings from these agreements were estimated to be between $60 and $65 million, and helped many states avoid imposing additional restrictions on their programs.

Reform Entitlement Programs

The Ryan White CARE Act as a whole is a discretionary program that must be specifically funded every year by Congress through the appropriations process. There is no guarantee from year to year that sufficient funding will be provided. In contrast, entitlement programs, such as Medicaid (the health insurance program for low-income Americans), are essentially guaranteed every year. These programs are not reliant on the annual appropriations process and are assured to be available unless Congress changes the law. Ensuring that additional people with HIV are covered by entitlement programs would help ensure access to HIV care from year to year and would take significant burdens off of ADAP and other discretionary programs.

Current eligibility guidelines restrict access to Medicaid for many low-income people living with HIV. Because Social Security Administration regulations do not define individuals with early HIV infection as "disabled," the majority of low-income Americans with HIV are ineligible for Medicaid and are unable to receive HIV-related drugs and health care through the program. Medicaid regulations should be amended so that "disability" for the purposes of program eligibility is defined as "HIV disease" and applies to low-income individuals throughout the spectrum of disease. Medicaid guidelines are clearly out of step with current medical science and standards of care. U.S. Public Health Service guidelines call for medical care early in the course of HIV infection, before symptoms of AIDS have developed. Early HIV care has been shown to reduce expensive hospital stays, allow people to remain at work, and prolong and improve individuals' lives.

If Medicaid is not reformed to serve people early in the course of HIV infection on a national scale, then the federal government should at least facilitate state efforts to expand the program. The Early Treatment for HIV Act (ETHA) is a bipartisan piece of legislation introduced by Congresswoman Nancy Pelosi (D-CA) and Congressman James Leach (R-IA) in the House (H.R. 3859) and by Senators Gordon Smith (R-OR) and Hilary Rodham Clinton (D-NY) in the Senate (S. 847). ETHA would give states the option to expand their Medicaid programs to cover people early in the course of HIV disease without having to apply for a federal waiver. It is modeled after the successful Breast and Cervical Cancer Prevention and Treatment Act of 2000, which allows states to provide early intervention Medicaid access to women with breast and cervical cancer.

Unfortunately, the current political and fiscal environment in Washington has not been conducive to the passage of ETHA. Instead, the focus in recent years has been on scaling back the Medicaid program. While Medicaid champions in Congress have thus far been able to stall attempts to block grant (disperse funds in a lump sum) and/or significantly reduce funding, threats to the program continue. As a result of these factors, ETHA has been introduced for several years but has not moved forward. Advocates and constituents must continue to exert tremendous pressure on their members of Congress about the importance of this legislation, as well as the ongoing need to maintain the existing Medicaid program.

An additional option was recently proposed in a report by a National Academy of Sciences Institute of Medicine (IOM) panel. The report, entitled "Public Financing and Delivery of HIV/AIDS Care: Securing the Legacy of Ryan White," calls for the establishment of a new federal entitlement program designed specifically to provide HIV care and treatment to low-income Americans without adequate access to health insurance. The proposed program would create a national standard of care, including consistent nationwide eligibility requirements and a federally defined list of services. The IOM report explained that this is the best approach to "address gaps and a lack of coordination" in the current system.

Advocates strongly support the IOM's conclusion that "failing to provide these cost-effective, life-saving drugs to all Americans who need them -- including individuals who lack insurance or cannot afford them -- is indefensible." Yet the bold call for entitlement coverage for low-income people with HIV is unlikely to be embraced by a federal government that is unwilling to provide sufficient resources to fully serve people who are currently seeking HIV care.

Universal Health Care: The True Solution

In the long run, the true solution to gaps in medical care and prescription drug coverage for Americans living with HIV/AIDS is to ensure universal health care for all Americans. The U.S. is the only developed nation whose political leaders have not yet found a way to guarantee affordable access to comprehensive health care for all of its people. It is estimated that one in seven Americans -- more than 40 million -- lack health-care coverage, and among these individuals are people who currently rely on ADAP for their anti-HIV medications. ADAP is only a Band-Aid for addressing America's failing health-care system. The AIDS community must continue to work with other health advocates to push our country to ensure access to health care for everyone who needs it.

Fred Dillon is deputy director of the Policy and Communications department of the San Francisco AIDS Foundation.

Selected Sources

  1. AIDS Drug Assistance Program Fact Sheet. Kaiser Family Foundation. May 2004.

  2. National ADAP Monitoring Project 2004 Annual Report. Kaiser Family Foundation, National Alliance of State and Territorial AIDS Directors, and AIDS Treatment Data Network. May 19, 2004.

  3. Porter, K. and others. Determinants of survival following HIV-1 seroconversion after the introduction of HAART. The Lancet 362(9392): 1267-1274. October 18, 2003.

  4. Public Financing and Delivery of HIV/AIDS Care: Securing the Legacy of Ryan White. The National Academies Press. 2004.

  5. The ADAP Watch. National Alliance of State and Territorial AIDS Directors. April, 2004

  6. The Journal of Timely and Appropriate Care of People With HIV Disease 1(1). January 2004.

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This article was provided by San Francisco AIDS Foundation. It is a part of the publication Bulletin of Experimental Treatments for AIDS. Visit San Francisco AIDS Foundation's Web site to find out more about their activities, publications and services.