This chapter provides a broad overview of the Health resources and Services Administration's (HRSA) HIV/AIDS Bureau's (HAB) AIDS Drug Assistance Program (ADAP) and the common program characteristics associated with State ADAPs. The history of ADAP is given, as well as descriptions of program funding, eligibility criteria, formulary decision-making, and cost-containment strategies.
What Are AIDS Drug Assistance Programs? TOP
AIDS Drug Assistance Programs (ADAPs) are State-administered programs that provide HIV/AIDS medications to low-income individuals living with HIV disease who have little or no coverage from private or third party insurance. ADAPs are authorized by the Ryan White Comprehensive AIDS Resources Emergency (CARE) Act, which was enacted in 1990, reauthorized in 1996 and again in 2000. The Ryan White CARE Act is the largest source of Federal funding specifically directed to provide primary care and support services for persons living with HIV disease (PLWH).
ADAPs are funded by Title II of the CARE Act, which provides formula grants to States to improve the quality, availability, and management of HIV services. Title II requires that:
A State shall use a portion of the amounts provided to establish a program... to provide therapeutics to treat HIV disease or prevent the serious deterioration of health arising from HIV disease in eligible individuals, including measures for the prevention and treatment of opportunistic infections. (Ryan White CARE Act, 1996 [Public Law 104-146], Section 2616 (a))
All 50 States, Puerto Rico, the Virgin Islands, Guam, and the District of Columbia operate ADAPs. United States territories including American Somoa, the Commonwealth of the Northern Mariana Islands, Palou, the Federated States of Micronesia, and the Republic of the Marshall Islands are also eligible to establish ADAPs.
History of ADAPs
ADAP started as a HRSA demonstration project to provide zidovudine (AZT), the first drug approved by the Food and Drug Administration (FDA) to treat HIV disease, to low-income persons living with HIV disease. The annual cost of this drug-about $10,000 per year per person-placed it out of the reach of many people. Congress responded by approving $30 million in funding under a public health emergency provision, and later enacted Public Law 100-71 authorizing the establishment of an ADAP program Nationwide.
As HIV treatment advances occurred and as resources permitted, States expanded their programs to cover drugs in addition to AZT. States added therapeutics that were beneficial in the treatment of many of the opportunistic infections (OIs) that occur in persons living with HIV disease (PLWH). When ADAP became part of the 1990 CARE Act, States had the option to cover any FDA-approved drug that treats HIV disease or prevents the serious deterioration of health due to HIV.
ADAPs have expanded considerably since 1991 (when Congress first appropriated funds for CARE Act programs), both in terms of numbers of enrolled clients and in program resources. As of 2001, there are four types of HIV antiretroviral medications approved by the FDA: nucleoside reverse transcriptase inhibitors (NRTIs), nucleotide analog reverse transcriptase inhibitors (NtRTIs), non-nucleoside reverse transcriptase inhibitors (NNRTIs), and protease inhibitors (PIs).
Combination therapy costs approximately $10,000 to $12,000/year, which is too expensive for many individuals. Moreover, prices for drugs continue to rise as new therapies are quickly introduced into the market. With these rising drug costs and increasing numbers of people seeking treatment, ADAPs are greatly challenged in providing services to all eligible clients.
Excerpt from the Ryan White CARE Act Amendments of 2000, Section 2616: Provision of Treatments (Note: Bold text indicates 2000 amendments)
(a) IN GENERAL.—A State shall use a portion of the amounts provided under a grant awarded under this part to establish a program under section 2612(a)(5) to provide therapeutics to treat HIV disease or prevent the serious deterioration of health arising from HIV disease in eligible individuals, including measures for the prevention and treatment of opportunistic infections.
(b) ELIGIBLE INDIVIDUAL.—To be eligible to receive assistance from a State under this section an individual shall—
(c) STATE DUTIES.—In carrying out this section the State shall-
(d) DUTIES OF THE SECRETARY.—In carrying out this section, the Secretary shall review the current status of State drug reimbursement programs established under section 2612(2) and assess barriers to the expanded availability of the treatments described in subsection (a). The Secretary shall also examine the extent to which States coordinate with other grantees under this title to reduce barriers to the expanded availability of the treatments described in subsection (a).
(e) USE OF HEALTH INSURANCE AND PLANS.—
(1) IN GENERAL.—In carrying out subsection (a), a State may expend a grant under this part to provide the therapeutics described in such subsection by paying on behalf of individuals with HIV disease the costs of purchasing or maintaining health insurance or plans whose coverage includes a full range of such therapeutics and appropriate primary care services.
(2) LIMITATION.—The authority established in paragraph (1) applies only to the extent that, for the fiscal year involved, the costs of the health insurance or plans to be purchased or maintained under such paragraph do not exceed the costs of otherwise providing therapeutics described in subsection (a).
ADAPs and Other Ryan White CARE Act Programs TOP
ADAPs provide one important link in an overall continuum of primary care and treatment for people with HIV disease. Other Ryan White CARE Act programs, such as Title I service providers, Title II consortia, and Title III early intervention programs, work in conjunction with State ADAPs to bring people into a system of care and provide them with quality treatment and services. Some of these programs also operate drug purchasing and distribution systems. In these instances, coordination between the ADAP and the other Ryan White Title programs is crucial to ensure that the most cost-effective method of reaching the maximum number of clients is being utilized by that State.
Guiding Principles for Ryan White CARE Act Programs TOP
The HIV/AIDS Bureau (HAB) Goals
In addition to legislative requirements and HRSA's HIV/AIDS Bureau program requirements, Ryan White CARE Act programs need to focus on four principles with important implications for HIV/AIDS services in the coming years.
1. Better serving the underserved in response to the HIV/AIDS epidemic's growing impact among underserved minority and hard-to-reach populations. This requires programs to assess shifting demographics of new HIV/AIDS cases in their area and to adapt or change care systems to meet the needs of emerging communities and populations. Of particular attention is reaching PLWH who are not in care and ensuring the provision of primary medical care and supportive services, directly or though appropriate linkages.
2. Ensuring access to existing and emerging HIV/AIDS treatments that can make a difference. The quality of HIV/AIDS medical care-including combination antiretroviral therapies and prophylaxis/treatment for opportunistic infections-can make a difference in the lives of PLWH. Programs should focus on ensuring that available treatments are accessible and delivered according to established HIV-related treatment guidelines/recommendations.
3. Adapting to changes in the health care delivery system and the role of CARE Act services in filling gaps in care. Programs need to consider how CARE Act services are utilized in filling gaps in care, including coverage of HIV/AIDS-related services within managed care plans (particularly Medicaid managed care) and coordination of CARE Act services with other funding sources.
4. Documenting outcomes. Policy and funding decisions at the Federal level are increasingly being determined by outcomes. Programs need to document the impact of CARE Act funds on improving access to quality care/treatment along with areas of continued need. Programs also need to ensure that they have in place quality assurance and evaluation mechanisms to assess the effect of CARE Act resources.
ADAPs serve a critical role in fulfilling these principles. They ensure that low-income individuals with little or no insurance can access HIV treatments that can prolong and improve their lives. As traditionally underserved populations enter primary care systems, many can enroll in State ADAPs and receive life-saving HIV medications. Finally, as ADAP funding continues to increase, it becomes increasingly important for State ADAPs to document their program's effectiveness through quality assurance measures and evaluation activities.
In response to these fiscal challenges for States, Congress designated dollars specifically to ADAP (referred to as the ADAP "earmark"). In fiscal years (FYs) 1996 and 1997, $219 million in Title II supplemental funds were appropriated specifically for ADAPs. In FY 1998, the earmark climbed to $285.5 million. That figure rose to $461 million for FY 1999. By FY 2002, ADAP received $639 million, bringing total ADAP funding to over $2 billion since 1991.
The RWCA Reauthorization of 2000 required 3 percent of the ADAP earmark to be used for supplemental treatment drug grants to "severe need" States and Territories to increase access to therapeutics.
Title II Base Funds
In response to the rapid increase in program costs and greater demand for services, some States have chosen to add some of their Title II base funds to ADAP. In FY 2001, 28 States contributed an average of 12.4 percent of their Title II base awards to their ADAPs.
Title I Contributions
Another source of funding for some ADAPs comes from voluntary allocations from Title I awards. Title I of the CARE Act funds eligible metropolitan areas (EMAs). These are urban geographic areas with a high population of HIV-infected individuals. By FY 1999, it appeared that some EMAs began to decrease their contributions to their State ADAP due to the increase in ADAP earmark dollars. If increasing drug costs and client enrollment begin to outpace ADAP earmark funding, it is uncertain if Title I programs will be able to continue this trend of decreasing contributions to State ADAPs.
Many States also allocate general revenue or other State funds to support their ADAPs. In FY 2001, 34 States appropriated a total of $133 million to their State ADAP.
Financial and medical eligibility for ADAP enrollment is determined at the State level and varies among States. Medical eligibility is most often a positive HIV diagnosis. Financial eligibility is usually determined as a percentage of Federal Poverty Level (FPL). Most ADAPs have set their financial eligibility criteria at 200 percent FPL or higher. However, in these States, at least 88 percent of enrolled clients have incomes below 200 percent FPL.
What Is The Federal Poverty Level?
The Federal Poverty Level for FY 2002 is set at an annual gross income of $8,860 for an individual and $11,940 for a family of two, according to poverty guidelines updated annually in the Federal Register by the U.S. Department of Health and Human Services (DHHS) under the authority of Section 673(2) of the Omnibus Budget Reconciliation Act of 1981. Updated Federal Poverty Guidelines can be found online.
In FY 2002, an ADAP with a financial eligibility requirement of 200 percent of FPL or less restricts its enrollment to those individuals earning up to $17,720/year and people in two-person families with a household income of no more than $23,880.
All States require proof of HIV positive status for ADAP enrollment. Some States also require evidence of disease progression, including CD4 counts and viral load testing.
Program Criteria Setting TOP
Most States have established advisory bodies to help with difficult decisions regarding eligibility criteria, the addition of drugs to the formulary, and other program matters. These bodies are made up of physicians, PLWH, ethicists, public health officials, and other representatives of service providers. Advisory bodies generally meet on a quarterly basis to monitor the status of the ADAP program and review any necessary changes in program characteristics.
The CARE Act gives States the authority to determine which FDA-approved drugs to include on their formularies. Most States focus on medications specifically for HIV treatment, including protease inhibitors and other antiretroviral medications. Other States also include medications to prevent and to treat opportunistic infections.
One of the most important functions of ADAP advisory bodies is to make decisions about formulary changes. Members often discuss advances in HIV treatment and assist ADAP staff in determining the cost effectiveness of adding new treatments to State formularies. (Some ADAPs automatically add new medications to their formularies upon their approval by the FDA and marketing by manufacturers.) Advisory bodies can also play an important role when ADAPs face serious budgetary constraints and choose to restrict their formularies to decrease program costs.
In July 1997, draft Guidelines for the Use of Antiretroviral Agents in HIV Infected Adults and Adolescents and the Report of the NIH Panel to Define Principles of Therapy of HIV Infection were published by DHHS. The Guidelines are intended for use by clinicians and other health care providers who use antiretroviral therapy to treat HIV-infected individuals. The Guidelines' recommendations are based on the NIH Panel's 11 Principles of Therapy, which recommends that all patients with a CD4+ Tcell count <200 cells/mm3 or clinically defined AIDS should be offered antiretroviral therapy.
These Guidelines are regularly updated to reflect emerging therapies, ongoing research, and newly approved HIV treatment medications. ADAPs and their advisory bodies use the Guidelines to guide their decisions about formulary coverage. A copy of the most recent Guidelines may be obtained online.
Cost-Saving Strategies TOP
Demand for HIV medications continues to grow as an increasing number of people seek treatment. ADAPs have taken many important steps to respond to the challenges of reducing their costs and stretching their limited resources. Some of the cost-containment strategies employed by ADAPs include restructuring their purchasing and dispensing systems, creating insurance programs, and coordinating with other agencies, such as other Ryan White Title programs and Medicaid.
Section 340B Drug Discount Program
Participation in the Section 340B Drug Discount Program, which provides drug discounts to certain grantees, including Ryan White grantees, allows ADAPs to save a significant amount of funds by lowering the price of medications. ADAPs have four methods of accessing this program, which is administered by HRSA's Office of Pharmacy Affairs (OPA):
1. They can use a point of purchase system, which provides a significant discount off the average manufacturers' price (AMP) of each drug based on a legislatively mandated formula for qualified "covered entities." Participation in the point of purchase system is easiest for ADAPs that centrally purchase and dispense medications.
2. ADAPs can access the 340B Drug Discount Program by utilizing the ADAP Section 340B rebate option. This alternative allows ADAPs currently using a reimbursement model to achieve cost savings closer to the ones achieved through participation in the point of purchase system. The rebate option allows decentralized ADAPs to realize greater savings than are typically seen from most voluntary manufacturer rebate programs. ADAPs participating in the 340B rebate option receive a rebate at a Federally determined amount, on all drugs covered on their formulary, from those manufacturers that have signed a pharmaceutical pricing agreement with the DHHS Secretary.
3. HRSA established the Prime Vendor Program on September 9, 1999. This program implements the last part of the 340B statute. The Prime Vendor Program is designed to maximize the benefits of the Prescription Drug Program to clients and State ADAPs. The 340B Prime Vendor Program will improve and expand State ADAP pharmacy services and enhance the effective management of pharmacies, while saving money on the purchase of pharmaceuticals.4. Finally, on June 18, 2001, the Secretary of the Department of Health and Human Services announced the Alternative Methods Demonstration Projects Initiative. This initiative is partially in response to continued requests for increased flexibility among existing 340B program discount participants. The new initiative will allow organizations that participate in the 340B Drug Discount Program to take actions to reduce administrative costs and make purchasing medications easier for patients.
States that do not participate in the Section 340B Drug Discount Program typically use a network of participating pharmacies where clients access their prescriptions. Currently, 51 out of a total of 54 State ADAPs participate in the 340B Drug Discount Program. The three ADAPs that do not participate in 340B use other cost-saving mechanisms that include: a State that imposes mandated manufacturer rebates, a Federal entity that uses the Federal Supply Schedule, and one U.S. Territory that is developing its program.
The non-340B States also obtain voluntary manufacturers' rebates on some or all of the drugs on their formularies. To obtain these rebates, each State must negotiate individually with each manufacturer. Larger States with greater volume of drug purchases typically realize more savings through this option than smaller States.
How Are ADAPs Structured?
Each State has the right to determine how its ADAP program will be structured. Depending on various factors, such as the organization of the State Department of Health or other parent agency, the size of the ADAP, and the pharmacy industry in the State, each ADAP will look and operate differently. State programs range from one-person operations (and these stalwart people are usually responsible for a lot more than just ADAP!) to staffs of over 40. Some ADAPs are administered by the State Medicaid office, while others contract out a significant portion of their administrative duties.
ADAPs also vary in terms of their purchasing and dispensing systems. For example, some are centralized, using a mail-order pharmacy to dispense medications. Others utilize a pharmacy network, allowing clients to pick up their medications at multiple sites.
When demand outstrips resources, many States have had to resort to other cost-containment strategies that involve establishing restrictions on their programs. Such limitations include capping client enrollment, restricting formulary size, instituting waiting lists, and limiting per patient expenditures. For some States, these restrictions can be dropped as funding levels increase; other ADAPs must operate under a continual shortage of resources. In FY 2001, 14 States benefited from the 3 percent set-aside for Supplemental ADAP funding for States defined as having "severe need" in order to address and lift restrictions to ADAPs as a result of funding shortfalls.
Patient Assistance Programs TOP
Patient Assistance Programs (PAPs), also called "compassionate use" programs, are sometimes available to clients who fail to qualify for the State ADAP or who are on the State ADAP's waiting list. Funded and operated by HIV pharmaceutical manufacturers on a State-by-State basis, PAPs are short-term sources of treatment assistance, either free of charge or at a nominal charge. These programs are available to eligible, financially disadvantaged patients in order to help them receive necessary prescriptions or maintain an existing regimen until another option is available. Eligibility requirements vary and usually require assistance from a doctor or patient advocate to apply.
Sources Used for this Chapter
HRSA, HIV/AIDS Bureau, Division of Service Systems. Ryan White Technical Assistance Conference Call "Alternative Methods Demonstration Projects." Rockville, MD. U.S. Department of Health and Human Services, 2001.
HRSA, HIV/AIDS Bureau, Division of Service Systems. Ryan White CARE Act ADAP Technical Assistance Conference Call, "The Prime Vendor Program." Rockville, MD. U.S. Department of Health and Human Services, 2000.
HRSA, HIV/AIDS Bureau, Division of Service Systems. ADAP and the Section 340B Drug Discount Program. Rockville, MD: U.S. Department of Health and Human Services, 2001.
HRSA, HIV/AIDS Bureau, Division of Service Systems. ADAP Cost Saving Strategies. Rockville, MD: U.S. Department of Health and Human Services, 2001.
HRSA, HIV/AIDS Bureau, Division of Service Systems. ADAP Eligibility Criteria. Rockville, MD: U.S. Department of Health and Human Services, 2001.
HRSA, HIV/AIDS Bureau, Division of Service Systems. ADAP Formulary Overview. Rockville, MD: U.S. Department of Health and Human Services, 2001.
HRSA, HIV/AIDS Bureau, Division of Service Systems. ADAP Funding Overview. Rockville, MD: U.S. Department of Health and Human Services, 2001.
HRSA, HIV/AIDS Bureau, Division of Service Systems. AIDS Drug Assistance Program General Overview. Rockville, MD: U.S. Department of Health and Human Services, 2001.
U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation. Poverty Guidelines, Research and Measurement.
HIV/AIDS Treatment Information Service. A U.S. Department of Health and Human Services project managed by the National Library of Medicine.