The ADAP Crisis: How We Got Here and How We Can Fix It

Murray Penner, Deputy Executive DirectorJanuary 29, 2011

• Represents the nation’s chief health agency HIV/AIDS and viral hepatitis staff in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and the U.S. Pacific Islands– Provides technical assistance and other support to

health department HIV/AIDS and viral hepatitis programs– Provides national leadership on HIV/AIDS and viral

hepatitis policy and programs– Educates about and advocates for necessary federal

and state funding of HIV/AIDS and viral hepatitis programs

National Alliance of State and TerritorialAIDS Directors (NASTAD)

Status of State ADAPs

Perfect Storm for ADAPs

ADAPCrisis

Increased Demand Due to Unemploy-

ment

Minimal Increases in

Federal Appropriations

State Fiscal Crises and Less than Adequate

Appropriations

Expanded Testing Efforts

Improved Client Health/

Continued Program

Need

Revised HIV Treatment Guidelines

Increasing Drug Costs

Size of the Gap That Needs to be Filled Varies by State

MedicaidProgram

Medicaid Program

STATE A STATE B

ADAP Client Demographics

• 77% male

• 57% Blacks and Hispanics (31% and 26% respectively)

• Almost half (47%) between the ages of 45 and 64

• 77% of incomes at or below 200% of the federal poverty level

ADAP Clients Served, by Income Level,June 2009

ADAP Clients Served, by Insurance Status,June 2009

ADAP Client Enrollment and Utilization.June 2009

• 1,554 new clients enrolled in ADAP each month in FY2008 (200,673 annually)

• In June 2009, ADAPs provided medications to 125,479 clients (14% increase over June 2008 and the largest increase since 1999 )

National ADAP Budget

• The national ADAP budget climbed to almost $1.6 billion in FY2009, a 5% increase from FY2008

• The ADAP earmark comprised less than half (49%) of the total ADAP budget (first time less than 50% since 1997)

The National ADAP Budget, by Source, FY2003 and FY2009

ADAP Earmark(67%)

State Contribution(17%)

Drug Rebates (11%)

Part B Contribution (2%)

Part A Contribution(2%) ADAP Supplemental

(2%)

FY2003

ADAP Earmark(49%)

State Contribution(14%)

Drug Rebates (31%)

Part B Contribution (2%)

Part A Contribution(1%) ADAP Supplemental

(3%) Other Funding (1%)

FY2009

The federal share of the national ADAP budget has decreased from 67 percent in FY2003 to 49 percent in FY2009.

National ADAP Budget

National ADAP Earmark

State Funding for ADAP

Drug Rebates

Current ADAP Crisis

ADAP Cost-containment, instituted since April 1, 2009

Arizona: reduced formularyArkansas: reduced formulary, lowered financial eligibility to 200% FPL, disenrolled 99 clients in September

2009) Colorado: reduced formularyFlorida: reduced formulary

Georgia: reduced formulary, implemented medical criteria, continued participation in the Alternative Method Demonstration Project (AMDP)Idaho: capped enrollment

Illinois: reduced formulary, instituted monthly expenditure capKentucky: reduced formulary

Louisiana: discontinued reimbursement of laboratory assaysNew Jersey: reduced formulary

North Carolina: reduced formularyNorth Dakota: capped enrollment, instituted annual expenditure cap, lowered financial eligibility to 300% FPL

Ohio: reduced formulary, lowered financial eligibility to 300% FPL (disenrolled 257 clients in July 2010)Puerto Rico: reduced formulary

South Carolina: lowered financial eligibility to 300% FPLUtah: reduced formulary, lowered financial eligibility to 250% FPL (disenrolled 89 clients in FY2010)

Virginia: reduced formularyWashington: instituted client cost sharing, reduced formulary (for uninsured clients only)

Wyoming: reduced formulary

Reduced Financial Eligibility, instituted since April 1, 2009

Arkansas: Lowered from 500% to 200% FPL

North Dakota: Lowered from 400% to 300% FPL

Ohio: Lowered from 500% to 300% FPL

Rhode Island: Lowered from 400% to 200% FPL

South Carolina: Lowered from 550% to 300% FPL

Utah: Lowered from 400% to 250% FPL

ADAP Waiting Lists,as of January 20, 2010

5,779 individuals in 10 states*, as of January 27, 2011Arkansas: 23 individualsFlorida: 3,008 individualsGeorgia: 879 individuals

Louisiana: 621 individuals**Montana: 19 individuals

North Carolina: 106 individualsOhio: 368 individuals

South Carolina: 359 individualsVirginia: 395 individualsWyoming: 1 individual

*As a result of ADAP emergency funding, Hawaii, Idaho, Iowa, Kentucky, South Dakota, and Utah eliminated their waiting lists.

**Louisiana has a capped enrollment on their program. This number is a representation of their current unmet need.

ADAP Solutions

Funding Strategy

Federal government

State government

Pharmaceutical partners

FY2010 Federal Funding

• On July 9, 2010, HHS announced the availability of $25 million in redirected funds for ADAPs.

• This money was intended for states with waiting lists and those that had put in place cost containment measures.

• Awards to 30 states and territories were announced on Aug. 24th – Awards ranged from $38,111 in Alaska to $6.9 million in

Florida.• The $25 million, in combination with the Part B supplemental

awards (totaling $17.5 million) allowed several states to clear their waiting lists.– However, was not enough for others.

State Funding• State budget cuts have hit HIV/AIDS programs hard. • In FY2009, states lost more than $167 million to HIV/AIDS

programs.• 153 open/unfilled positions, 66 positions eliminated in HIV/AIDS

programs.• 20 states report hiring freezes.• 13 states have mandatory staff furloughs ranging from 1 to 36 days.• Additional staff/capacity impacts:

• Pay cuts • Pay freezes • Freezes on promotions

State Funding

• In FY2010, states showed signs of prioritizing ADAP:– States contributed over $336 million in state general revenue

funds: increase of $138.5 million from FY2009.– 19 states provided increases to ADAPs (AL, CA, CO, GA, IL,

IA, MT, NE, NV, NH, NJ, NY, NC, OH, PA, VA, WA, WV & WI).– 12 states cut funding to ADAP (FL, ID, MN, MS, OK, OR, RI,

SC, TN & TX).

• However, Center for Budget Policy & Priorities warns that 2012 could be most challenging year of recession for state budgets.

Pharmaceutical Response

• The ADAP Crisis Task Force reached agreements with 7 of the 8 HIV antiretroviral manufacturers to provide deeper discounts, increased rebates and price freezes to ADAP.

• Since the Task Force’s inception in 2003, agreements have provided concessions of over $1.1 billion to ADAPs.

• The Task Force also worked with companies to expand the reach of Patient Assistance Programs (PAPs).

• Six companies are also participating in Welvista, a unique PAP which provides coordinated access to medications for individuals on ADAP waiting lists.

Solutions to the ADAP Crisis• Increase grassroots state and federal advocacy efforts!

• Develop new messages to speak to more conservative-leaning legislators.

• Continue to increase efficiencies in ADAP administration and ensure interface with other public payer systems.

• Continue working with Administration and Congress to increase funding.

• HIV/AIDS community looking at all options to address the crisis.

• A new version of the ACCESS ADAP Act (Addressing Cost Containment Measures to Ensure the Sustainability and Success of ADAP Act) introduced last year by Senators Burr (R-NC) and Coburn (R-OK)?

Federal Funding Outlook

• All ADAPs need increased funds to deal with increased demands.

• ADAPs must receive additional funding in FY2011 and FY2012.

• FY2011 funding is in jeopardy. – House Republicans have signaled a series of short-term

resolutions funding the government for FY2011.– Harder lift to ensure ADAP increase.– Before holidays – Senate had included a $65 million increase

for ADAPs in their Omnibus spending bill.

Federal Funding Outlook

• HIV/AIDS community regrouping after election to determine best strategy to work with new Republican-controlled House and tight fiscal environment.

• Conducting many meetings to gather intelligence and get advice from friendly offices (both Democrats and Republicans).

• Believe we need a shift in approach and cannot continue to advocate for huge increases.– One approach is to advocate for amount that ADAP was

authorized for in the 2009 Ryan White reauthorization.

Contact Information

National Alliance of State & Territorial AIDS Directors202.434.8090

www.NASTAD.org

Murray PennerDeputy Executive Directormpenner@NASTAD.org