ANNUAL REPORTEXECUTIVE SUMMARY

MAY 2004

Prepared by

M. Danielle DavisChris AldridgeMurray Penner

National Alliance of State and Territorial AIDS Directors

Jennifer KatesThe Henry J. Kaiser Family Foundation

Lei ChouDaniel Kubert

AIDS Treatment Data Network

NATIONAL ADAP MONITORING PROJECT

The Kaiser Family Foundation is a non-profit, private operating foundation dedicated to providing informationand analysis on health care issues to policymakers, the media, the health care community, and the general public.The Foundation is not associated with Kaiser Permanente or Kaiser Industries.

ANNUAL REPORTEXECUTIVE SUMMARY

MAY 2004

Prepared by

M. Danielle DavisChris AldridgeMurray Penner

National Alliance of State and Territorial AIDS Directors

Jennifer KatesThe Henry J. Kaiser Family Foundation

Lei ChouDaniel Kubert

AIDS Treatment Data Network

NATIONAL ADAP MONITORING PROJECT

Acknowledgements

The Henry J. Kaiser Family Foundation (KFF), the National Alliance of State and Territorial AIDS Directors(NASTAD) and the AIDS Treatment Data Network (ATDN) would like to thank the state ADAP and AIDS programmanagers and staff for their time and effort in completing the National ADAP Survey, June 2003, which serves as thefoundation for this report. The authors also wish to thank Ardine Hockaday (Kaiser Family Foundation) for graphicdesign assistance.

About AIDS Drug Assistance ProgramsIn 1987, Congress first appropriated funds to assist states in providing the relatively costly drug AZT [the firstantiretroviral drug approved by the Food and Drug Administration (FDA)] to people living with HIV/AIDS. Statehealth departments were directed by Congress to use these AZT Assistance Program funds to purchase and deliver AZTto eligible individuals. As AIDS treatment options increased and resources allowed, AZT Assistance Programs began tocover other approved antiretroviral medications and drugs to prevent and treat opportunistic infections. These programswere incorporated into Title II of the Ryan White Comprehensive AIDS Resources Emergency (CARE) Act upon itsinitial passage in 1990 and became commonly known as AIDS Drug Assistance Programs (ADAPs).

ADAPs provide FDA approved HIV-related prescription drugs to underinsured and uninsured individuals living withHIV/AIDS. The CARE Act gives states1 broad authority to set program eligibility criteria and to decide what HIV-related treatments to include on ADAP formularies. Since FY 1996, Congress has earmarked funds under Title II of theCARE Act specifically for ADAPs. In addition, many states also provide their own resources to ADAPs. There arenow 57 ADAPs operating in all 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, three U.S.Pacific Territories (American Samoa, Guam and the Commonwealth of the Northern Mariana Islands) and oneAssociated Jurisdiction (the Republic of the Marshall Islands).

The National ADAP Monitoring ProjectThe National ADAP Monitoring Project is conducted by the Henry J. Kaiser Family Foundation (KFF), the NationalAlliance of State and Territorial AIDS Directors (NASTAD) and the AIDS Treatment Data Network (ATDN). Thisreport represents the eighth annual report released by the National ADAP Monitoring Project. The Project seeks toprovide timely information on the current status of state and territorial ADAPs, trends over time, and key issues thatimpact ADAPs and their ability to provide medications to people living with HIV/AIDS. The National ADAP Survey,conducted by NASTAD and ATDN, serves as the basis for the Project’s Annual Report. The survey, sent to all state andterritorial ADAP coordinators, includes questions on budgets, expenditures, client utilization, client demographics,eligibility criteria, and formularies.

The National ADAP Monitoring Project is one component of the NASTAD National ADAP Monitoring and TechnicalAssistance Program, which works closely with state and territorial AIDS directors and ADAP coordinators, community-based AIDS treatment organizations and advocates to monitor and document the status of ADAPs. This program alsoserves as a resource center, providing timely information on the status of ADAPs, particularly those experiencingresource constraints or other challenges, to national coalitions and organizations, policy makers, and state and federalgovernment agencies. In addition, the program offers technical support to state AIDS directors and ADAP coordinatorson programmatic and policy strategies to assist them in the provision of HIV and HCV treatments to those in need.Support for the NASTAD National ADAP Monitoring and Technical Assistance Program is also provided by thefollowing companies: Abbott Laboratories; Boehringer Ingelheim Pharmaceuticals, Inc.; GlaxoSmithKline; Roche andTrimeris; and Solvay Pharmaceuticals, Inc.

1 The term “state” is used generically in this report to include states, territories and associated jurisdictions.

National ADAP Monitoring Project:Annual Report

May 2004

TABLE OF CONTENTS

Executive Summary 2

Introduction 3

Survey Highlights 3

Detailed Findings 5

Conclusion 9

2003 State-by-State Summary ADAP Profile 11

State ADAPs with Waiting Lists, as of April 2004 13

State ADAPs with Current or Planned Cost-Containment Measures 14

(other than waiting lists), as of April 2004

ADAP Formulary Coverage as of end FY 2003 15

Executive Summary

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INTRODUCTIONAIDS Drug Assistance Programs (ADAPs) play a vitalrole in the healthcare of HIV-infected individuals,serving more than 85,000 clients in the month of June2003, and approximately 136,000 each year or about30% of people estimated to be living with HIV/AIDSwho are receiving care.1,2 Operating in 57 U.S. states,territories, and associated jurisdictions,3 ADAPs provideFDA approved HIV-related prescription drugs to peoplewith HIV/AIDS who have limited or no prescriptiondrug coverage. In addition to helping to fill the gaps inprescription drug coverage, ADAPs can serve as agateway to a broader array of healthcare and supportiveservices funded through the Ryan WhiteComprehensive AIDS Resources Emergency (CARE)Act4 and to other sources of coverage includingMedicaid, Medicare, and private insurance. As thenumber of people living with HIV/AIDS in the U.S. hasincreased, largely due to advances in HIV treatment,5

the importance of and demand for ADAPs has grownover time.

ADAPs began serving clients in 1987, when Congressfirst appropriated funds to help states purchase AZT—the only approved antiretroviral drug at that time. In1990, ADAPs were incorporated into Title II of the thennewly created Ryan White CARE Act—the CARE Acthas become the nation’s third largest source of federalfunding for HIV care, after Medicaid and Medicare.6

Since fiscal year (FY) 1996, Congress has specificallyearmarked funding in the CARE Act for ADAPs, whichis allocated by formula to states.7 ADAPs may alsoreceive funding from other sources, such as stategeneral revenue support, but these contributions aregenerally not required. The federal ADAP earmark isthe largest component of the overall national ADAPbudget. The Department of Health and HumanServices, Health Resources and ServicesAdministration (HRSA) is the federal agency thatadministers the CARE Act. Each state8 administers itsown ADAP, and is given broad authority by the CAREAct to design its program, including determining clienteligibility criteria, drugs offered, and other key programelements.

Like all Ryan White CARE Act programs, ADAPsserve as “payer of last resort”; that is, they provide

prescription medications to people with HIV/AIDSwhen no other funding source is available to do so.ADAPs are not entitlement programs,9 and their fundingmay not correspond to the number of people who needprescription drugs or the costs of medications.Therefore, annual federal appropriations, and in somecases state appropriations and contributions from othersources, determine how many clients ADAPs can serveand the level of services they can provide. Demand forADAP services also depends on the size of theprescription drug “gap” that ADAPs must fill in theirjurisdiction—larger gaps, such as in states with lessgenerous Medicaid programs, may strain ADAPresources even further. These factors have often createdchallenging conditions for ADAPs as they try to meetgrowing client demand, rising drug costs, changing HIVtreatment standards, and operate within a complex andincreasingly difficult state fiscal environment.

SURVEY HIGHLIGHTSSince 1996, the National ADAP Monitoring Project, aninitiative of the Kaiser Family Foundation (KFF), theNational Alliance of State and Territorial AIDSDirectors (NASTAD), and the AIDS Treatment DataNetwork (ATDN), has been surveying ADAPs. Alljurisdictions receiving federal ADAP earmark fundingthrough the Ryan White CARE Act are surveyed on anannual basis (57 jurisdictions in FY 2003). This reportprovides the latest data on ADAPs and trends over time,based on responses from 54 of the 57 ADAPs.10 Dataare from June 2003 and FY 2003,11 unless otherwisenoted. Highlights from this year’s survey include:

• The Number of Clients Served and DrugExpenditures Continue to Increase. The number ofclients served and drug expenditures increased, but atmuch slower rates than in the early years of theADAP Monitoring Project (clients increased by 46%between 1996 and 1997, compared to 10% between2002 and 2003; drug expenditures increased by 93%between 1996 and 1997 compared to 9% in the mostrecent period).12 While most states experiencedincreases in clients served (41 ADAPs), 11 haddecreases and 1 had no change. Thirty-five states hadincreases in their monthly drug expenditures; 18 haddecreases.

Executive Summary

4

• What You Get Depends on Where You Live.Resource constraints and state discretion over ADAPprogram design have resulted in significant variationin access to ADAPs and the range of drugs offeredacross the country. Given limited resources, stateADAPs must often face difficult trade-offs, such asbetween financial eligibility criteria and drugsoffered, when operating their programs. Someexamples of variation include:

– Client eligibility for ADAPs ranges from 125% ofthe Federal Poverty Level (FPL) in North Carolina(this is a little over $11,000 in annual income for ahousehold of one) to 500% FPL or higher inDelaware, Massachusetts, New Jersey, and NewYork.

– The number of drugs on ADAP formularies rangesfrom 18 in Colorado to 474 in New York. Fourjurisdictions reported that they had open

formularies13 (Massachusetts, New Hampshire, New

Jersey, and the Northern Mariana Islands).14

– Sixteen states do not provide all FDA-approved

antiretroviral medications,15 including one state

(South Dakota) that does not provide any protease

inhibitors.

– Only 17 states provide the full set of 14 drugs

highly recommended by the Public Health

Service/Infectious Disease Society of American

(PHS/IDSA) Guidelines16 for the prevention and

treatment of opportunistic infections. Two states

(Colorado and Louisiana) do not provide any of

these drugs or drugs for other HIV-related

conditions.

• Waiting Lists and Other Cost ContainmentMeasures Affect Client Access. Due to budget

shortfalls, some states have implemented cost

Allocation of Federal Funding to ADAPs

Each year, Congress specifically earmarks funding forADAPs within Title II of the Ryan White CARE Act (3% of theearmark is set aside for grants to states with severe need—see below). The formula used to allocate federal earmarkfunding to state jurisdictions each year is based on theirproportion of the nation’s estimated living AIDS cases.Estimated living AIDS cases are determined by the Centersfor Disease Control and Prevention (CDC) and provided tothe Health Resources and Services Administration (HRSA).To determine estimated living AIDS cases, CDC appliesannual survival weights to the most recent 10 years ofreported AIDS cases. A jurisdiction’s proportion ofestimated living AIDS cases is applied to the earmark todetermine the award amount. States with 1% or more ofreported AIDS cases during the most recent two-year periodmust match (with non-federal contributions) their RyanWhite Title II award, which includes the ADAP earmark,according to an escalated matching rate (based on thenumber of years in which the state has met the 1%threshold). The state match, however, is not required to beused for its ADAP. In FY 2003, 57 jurisdictions receivedfederal ADAP earmark funding.

The CARE Act Amendments of 2000 included a newSupplemental Treatment Drug Grant, grants to states withsevere need. Three percent of federal ADAP earmarkfunding appropriated by Congress is set aside for ADAPsupplemental awards. Award amounts are based on aneligible jurisdiction’s proportion of estimated living AIDS

cases among those states eligible for and applying to receivea supplemental grant. This proportion is applied to thenumber of dollars available under the supplemental grant todetermine the award amount. States applying forsupplemental grants must provide matching dollars in anamount equal to $1 for each $4 of federal funds provided inthe grant, and the match must be put toward ADAP. In FY2003, 17 jurisdictions received ADAP supplemental awards.To be eligible for supplemental awards, states must havemet one of the following criteria as of January 1, 2000:

■ Financial eligibility at or below 200% of the FederalPoverty Level (FPL);

■ Medical eligibility criteria used (e.g., specific CD4 T-cellcount or viral load);

■ Limited formulary compositions for antiretrovirals; and/or

■ Less than ten medications on formulary to treatopportunistic infections.

It is important to note that the ADAP fiscal year differs fromthe federal and state fiscal year periods. The ADAP fiscalyear begins on April 1 and ends on March 31; the federalfiscal year begins on October 1 and ends on September 30;for most states, the fiscal year begins on July 1 and ends onJune 30. For example, the ADAP FY 2004 began on April 1,2004 and will end on March 31, 2005. The Federal FY 2004began on October 1, 2003 and will end on September 30,2004. The State FY 2004, in most states, began July 1,2003 and ends on June 30, 2004. ◗

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containment measures that may reduce client accessand services. As of April 2004,17 13 ADAPs had costcontainment measures in place, including: closedenrollment to new clients (11); reduced formularies(2); monthly or annual per capita expenditure limits(3); and/or increased client cost-sharing (1). Nine ofthe states with capped enrollment also had waitinglists, representing a total of 1,263 clients identified aswaiting for services. The number of clients onwaiting lists across the nation may fluctuate duringthe fiscal year, depending on resource availability andclient demand.

• Some State ADAPs Experienced Budget Decreases.Despite an increase in the overall national ADAPbudget between FY 2002 and FY 2003 (9%), largelydue to increases in the federal ADAP earmark (eachstate received an increase), some states experiencednet budget decreases and/or decreases in other keyfunding sources:

– 5 had net decreases in their overall budgets

– 12 had decreases in state general revenue support

– 17 had decreases in Title II base funds

– 4 had decreases in Title I funding

– 11 had decreases in ADAP supplemental funding

• Funding From Sources Other than the ADAPEarmark Highly Variable. By definition, all eligiblejurisdictions receive federal ADAP earmark funding

based on a formula, and the ADAP earmark is themain source of funding for ADAPs. Other fundingsources are also important, but fluctuate significantlyand each is dependent on individual state and localplanning, policy, and/or legislative decisions, and onresource availability. Not all ADAPs receive fundingfrom other sources, and in FY 2003, seven ADAPsreceived only ADAP earmark funding. Other sourcesof funding in FY 2003 included: state general revenuesupport (39 ADAPs);18 Title II base funds (24ADAPs); Title I funding (12 ADAPs); and ADAPsupplemental funding (17 ADAPs).

• Antiretrovirals are Bulk of ADAP Expendituresand Most Expensive. Antiretroviral (ARV) drugexpenditures continue to represent the bulk of ADAPdrug expenditures (86% in June 2003). While this isin part due to their high utilization (61% ofprescriptions filled in June 2003), it is also related totheir cost. Expenditure per prescription issignificantly higher for ARVs ($357 per prescriptionin June 2003) compared to non-ARVs ($94). Someclasses of ARV drugs account for higher perprescription expenditures than others, with proteaseinhibitors topping the list ($439).

DETAILED FINDINGSDetailed findings from this year’s survey are providedbelow and in the accompanying chart and tables.

The Number of Clients Served and DrugExpenditures Continue to Increase

Client Utilization and Profile• The number of clients served by ADAPs grew to

85,825 in June 2003 (see Chart 1). Client utilizationhas increased significantly since 1996, although atslower rates over time (the number of clients servedincreased by 46% between 1996 and 1997, comparedto 10% between 2002 and 2003)12 (see Chart 4).

• A greater number of clients may be enrolled in anADAP than receive services in a given month,reflecting the fact that clients may seek ADAPservices at different times of the year depending onsuch factors as their clinical needs, the length of aprescription, and availability of other resources to payfor their medications. The number of clients enrolledin ADAPs in June 2003 was 128,465, approximatelytwo thirds of whom (67%) sought services in thatmonth (see Chart 3). It is important to note thatannual client enrollment may actually be higher than

ADAP Cost Containment MeasuresState ADAPs use a variety of strategies to contain costs,some of which may affect client access and services andothers that may lead to a more efficient use of funding inan effort to serve more people. In some cases, statesmust implement cost containment measures, such aswaiting lists, multiple times over the course of a year,depending on their fiscal situation and client demand.Cost containment measures include:

■ Capping client enrollment

■ Waiting lists

■ Limiting and/or reducing ADAP formularies

■ Monthly or annual limits on per capita expenditures

■ Drug purchasing strategies (discount programs,rebates, purchasing alliances and coalitions)

■ Insurance continuation and purchasing

■ Cost recovery (drug rebates, third party billing) ◗

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monthly client enrollment since more clients mayenroll over the course of a year than are enrolled in aone-month period.

• The majority of clients served in June 2003 werepeople of color, with African Americans representingone-third (33%) and Hispanics representingapproximately one-quarter (25%) of the nationalADAP population. Asian/Pacific Islanders, AlaskanNative and American Indians combined representedapproximately 2% of the total ADAP population.White non-Hispanics represented 38% of ADAPclients in June 2003 (see Chart 9). The racial/ethnicprofile of ADAP clients has remained relativelyconstant over the last several years, but limitednational data exist to assess whether or not ADAPsare serving clients by race/ethnicity in proportion totheir need.

• More than three-quarters (79%) of ADAP clients inJune 2003 were men and 60% were between the agesof 25 and 44 (see Chart 10).

• Most ADAP clients are low-income, with eight in ten(81%) of June 2003 ADAP clients served reporting

incomes at or below 200% of FPL, including abouthalf (49%) falling at or below 100% of FPL (seeChart 11). In 2003, the FPL was $8,890 per year(slightly higher in Alaska and Hawaii) for ahousehold of one. Most ADAP clients are alsouninsured, with only small percentages reportingsome other source of coverage (13% private, 8%Medicare, and/or 7% Medicaid) (see Chart 12).Many have indicators of advanced HIV disease (42%had CD4 counts of 350 or below) (see Chart 13).

Expenditures and Prescriptions• ADAP drug expenditures grew to $77,392,171

million in June 2003 (see Chart 2), an increase of 9%over June 2002. If annualized, this representsapproximately $928.7 million or most (97%) of theFY 2003 national ADAP budget. As with clients,drug expenditures have increased significantly since1996, but generally at slower rates over time (anincrease of 93% between 1996 and 1997 compared to9% between 2002 and 2003)12 (see Chart 5).

• Per capita drug expenditures were $902 in June 2003,a slight increase over last year ($838 in June 2002)(see Chart 6). If annualized, this represents $10,824.Per capita expenditures in June 2003 ranged from$319 in Ohio to $1,402 in Wyoming (see State-by-State Summary ADAP Profile).

• ADAPs filled a total of 300,540 prescriptions in June2003 (see Chart 7).

What You Get Depends on Where You Live

Eligibility Criteria• All states require that individuals document their HIV

status. Four states reported additional clinical criteriafor client access to ADAPs (e.g., specific CD4 orviral load ranges) (see State-by-State SummaryADAP Profile).

• Financial eligibility for ADAPs ranged from a low of125% FPL in North Carolina to 500% FPL or more inDelaware, Massachusetts, New Jersey, and New York.(see State-by-State Summary ADAP Profile).

ADAP Formularies• ADAP formularies ranged from 18 drugs covered in

Colorado to 474 in New York. Four jurisdictionsreported that they had open formularies13

(Massachusetts, New Hampshire, New Jersey, andthe Northern Mariana Islands14) (see State-by-StateSummary ADAP Profile).

Key Dates in the History of ADAPs1987: First antiretroviral, AZT, approved by the FDA;Federal government gives grants to states to help thempurchase AZT, marking beginning of federally-funded, stateadministered AIDS Drug Assistance Programs

1990: ADAPs incorporated into Title II of the newly createdRyan White CARE Act

1995: First Reauthorization of CARE Act; first proteaseinhibitor approved by FDA, and highly active antiretroviraltherapy (HAART) becomes standard of care

1996: Federal ADAP earmark begins; first non-nucleosidereverse transcriptase inhibitor (NNRTI) approved by FDA

2000: Second Reauthorization of CARE Act, changes forADAPs include—insurance purchasing and maintenanceflexibility, flexibility to provide other limited services (e.g.,adherence support), and ADAP supplemental awardcreated

2003: NASTAD’s ADAP Crisis Task Force formed tonegotiate with pharmaceutical companies on pricing ofantiretroviral medications

2003: First fusion inhibitor approved by FDA ◗

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• Sixteen states do not provide all approvedantiretroviral medications,15 including one state thatdoes not provide any protease inhibitors (SouthDakota) (see State-by-State Summary ADAP Profile).

• Seventeen states offer all 14 drugs highlyrecommended for prevention and treatment ofopportunistic infections, according to the PHS/IDSAGuidelines,16 up from 15 states last year. A total of 39states now cover 10 or more of these recommendedOI drugs, the same number as last year. Two states donot provide any medications for the prevention andtreatment of opportunistic infections or for any otherHIV-related conditions (Colorado and Louisiana).(see State-by-State Summary ADAP Profile).

• A majority of ADAPs (33) provide Fuzeon, the firstFDA-approved drug in an new class (fusioninhibitors). This is a notable formulary expansiongiven its cost and only recent approval by the FDA(see State-by-State Summary ADAP Profile). MostADAPs that offer Fuzeon use guidelines that are

either clinically-based or limit access to a fixednumber of clients.

• Twenty states reported coverage of drugs for thetreatment of hepatitis C (HCV), a major co-morbidityfor people with HIV, and one that is now consideredto be an opportunistic infection. Twenty-two statesoffer Hepatitis A and B vaccines, recommended forthose at high risk and living with HIV (see Chart 26).

Some State ADAPs Experienced Budget Decreases

• The FY 2003 national ADAP budget grew to $961.5million, an increase of approximately $83 million or9% over FY 2002 (see Chart 15).

• The ADAP earmark represents the largest componentof the national ADAP budget, accounting for nearlythree-quarters (72%) of the national ADAP budget inFY 2003.19 State general revenue support representsthe second largest share of the ADAP budget 18 (18%)(see Chart 14). Each of these two sources of fundingincreased overall between FY 2002 and FY 2003.

ADAP Waiting ListsSince the beginning of the AIDS Drug AssistanceProgram, many state ADAPs have had to make difficulttrade-off decisions between client access and services. Insome cases, states have capped enrollment to theirprograms until more resources become available. Whenenrollment is capped, the next individual who seeksservices cannot get them through the ADAP. States thathave enrollment caps have turned to waiting lists, inorder to facilitate client access when the program canaccommodate them. In April 2004, 9 ADAPs had waitinglists, representing 1,263 people identified as needingservices.

When an individual is on a waiting list, they may not haveaccess to HIV-related medications. Or, they may haveaccess through other mechanisms, but these are oftennot very stable. Some on waiting lists can getmedications through other state pharmacy assistanceprograms, if their state has one, or throughpharmaceutical manufacturer assistance programs(PAPs). PAPs, however, require people to apply as oftenas every month and separate applications must be sent tothe manufacturer of each medication needed. Forsomeone on a multiple drug regimen, this process can be

quite cumbersome and may not provide them with thefull range of drugs needed.

To date, no state has eliminated current clients fromADAP or reduced their level of service when faced withthe need to implement a waiting list for new applicants.Nevertheless, states are faced with difficult challengesconcerning their waiting lists, including: how to monitorthose on waiting lists; should criteria be developed tobring people off the waiting list into services or shouldnew clients be accommodated on a first come, first servebasis; and what kinds of future decisions need to bemade to reduce or eliminate waiting lists (e.g., choosingnot to add a newly approved medication).

It is important to note that waiting lists are only onemeasure of unmet need for ADAP services. Some peoplewho need ADAP services may not be counted on awaiting list. And, the level of services provided by ADAPsand the number of clients they serve is already quitevariable across the country, so those receiving ADAPservices in a state with a limited formulary may haveunmet needs compared to others receiving services in astate with a more expansive formulary. ◗

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• While the ADAP budget increased overall, largelydue to increases in the federal ADAP earmark (eachstate received an increase), some states experiencednet decreases in their overall budgets and/or decreasesin other key funding sources, including: net decreasesin their overall budgets (5 ADAPs); decreases in stategeneral revenue support (12); decreases in Title IIbase funds (17); decreases in Title I funding (4);decreases in ADAP supplemental funding (11).Nationally, funding from Title II base funds decreasedby 23%, dropping to $22.2 million.20 Contributions toADAPs from Title I Eligible Metropolitan Areas(EMAs)21 decreased by 11% and totaled $17.5 million(see Appendix X).

Funding From Sources Other than the ADAPEarmark Highly Variable

• Not all ADAPs receive funding from sources otherthan the ADAP earmark and in FY 2003, sevenADAPs received only ADAP earmark funding. Othersources of funding in FY 2003 included: state generalrevenue support (39 ADAPs); Title II base funds (24ADAPs); Title I funding (12 ADAPs); and ADAPsupplemental funding (17 ADAPs) (see Appendix X).

• State contributions to ADAPs ranged from 0%, inthose states that did not provide such support, toalmost two-thirds of the ADAP budget in one state;Title II base funding as a proportion of the ADAPbudget ranged from 0% to 81%; Title I fundingranged from 0% to 57%; and ADAP supplementalfunding ranged from 0% to 11%.

Waiting Lists and Other Cost ContainmentMeasures Affect Client Access

• As of April 2004,17 13 ADAPs—Alabama, Alaska,Arkansas, Colorado, Idaho, Indiana, Kentucky,Montana, North Carolina, Oklahoma, South Dakota,Washington, and West Virginia—had costcontainment measures in place, some of which mayreduce client access and services. These include:closed enrollment to new clients (11); reducedformularies (2); monthly or annual per capitaexpenditure limits (3); and/or increased client cost-sharing (1). Nine of the states with cappedenrollment also had waiting lists, representing a totalof 1,263 clients identified as waiting for services (seeState-by-State ADAP Summary Table). The number

of clients on waiting lists across the nation mayfluctuate during the fiscal year, depending onresource availability and client demand.

• Ten ADAPs anticipate the need to implementadditional cost containment measures in the nextfiscal year.

• ADAP Drug Purchasing Models. The federal 340Bprogram enables ADAPs to purchase drugs at thestatutorily defined 340B ceiling price. Most ADAPsparticipate in the 340B program (50 of the 54jurisdictions reporting data). ADAPs can eitherpurchase drugs directly (27 ADAPs) or purchasethrough a pharmacy network and seek manufacturerrebates (27) (see Chart 23).

• ADAP Insurance Purchasing/Maintenance. The RyanWhite CARE Act allows states to use ADAP earmarkdollars to purchase health insurance and payinsurance premiums for individuals living with HIV.In FY 2003, 22 states provided insurancepurchasing/maintenance for a total of $29.7 million,or 3% of the national ADAP budget. In June 2003, anestimated 7,167 ADAP clients were served by sucharrangements (see Chart 21). This represents anestimated $345 in per capita expenditures for June2003, compared to $902 for per capita drugexpenditures.

Antiretrovirals are Bulk of ADAP Expenditures andMost Expensive

• Antiretroviral (ARV) drug expenditures continue torepresent the bulk of ADAP drug expenditures (86%in June 2003) (see Chart 7).

• While this is in part due to their high utilization, it isalso related to their cost. ARVs represent a greaterproportion of expenditures than prescriptions (86%compared to 61% in June 2003) (see Chart 7).

• Expenditure per prescription is significantly higherfor ARVs ($357 per prescription in June 2003)compared to non-ARVs ($94). Some ARV drugclasses account for higher per prescriptionexpenditures than others, with protease inhibitorstopping the list ($439), followed by nucleoside analogreverse transcriptase inhibitors (NRTIs) ($343) andnon-nucleoside reverse transcriptase inhibitors(NNRTIs) ($306) (see Chart 8).

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ConclusionAs demonstrated by this year’s ADAP MonitoringProject Report, ADAPs are serving more clients andadapting to changing treatment environments; however,they are not always doing so without challenges.Although the ADAP budget has increased over time,allowing ADAPs to serve more people and increaseexpenditures on medications, this has not met the needin all states. Several ADAPs have waiting lists in place,or other cost containment measures that may affectclient access, and access varies significantly across thecountry. These trends will likely continue for theforeseeable future. Looking forward, there are severaldevelopments to pay particular attention to:

• The Reauthorization of the Ryan White CARE Act:The Ryan White CARE Act is due to be reauthorizedin FY 2005. While any changes that could affectADAPs would not go into effect until that time, thecurrent status of ADAPs—their challenges andsuccesses—will likely play a key role inReauthorization. In particular, the important andreinforcing relationship between ADAPs and otherparts of the CARE Act needs to be better understood.The Institute of Medicine’s recently released report onHIV/AIDS financing provides information that caninform this process as well.

• The State Fiscal Environment, Medicaid, and ADAPs:States have faced difficult fiscal conditions over thelast few years, and most have responded to budgetpressures by implementing Medicaid costcontainment strategies, such as pharmacy cost

controls. Temporary federal fiscal relief to stateMedicaid programs, which helped them stave offadditional changes to their Medicaid programs, is dueto end in June 2004.22 These factors, coupled withcontinuing state fiscal pressures, may lead toincreases in ADAP demand.

• The Medicare Prescription Drug Benefit. In late2003, the Medicare Prescription Drug, Improvement,and Modernization Act of 2003 (P.L. 108-173) waspassed, adding outpatient prescription drug coverageto the Medicare program, effective January 1, 2006.A temporary Medicare prescription drug discountcard will be available before the law is fullyimplemented. Ultimately, how the new law, and thetemporary prescription drug cards, will play out andwhat effect they will have on people with HIV/AIDSand the other programs that serve them, includingADAPs, remains unclear.

One issue that will always face ADAPs is that theirhealth and fiscal benefits, such as improved clienthealth status which often leads to delayed diseaseprogression and disability and therefore eligibility forother programs (e.g., the Medicaid, SupplementarySecurity Income, and Social Security DisabilityInsurance programs), result in savings to these otherprograms that do not accrue to ADAPs directly. Thismakes demonstrating the larger impact of ADAPs achallenging task. Yet ADAPs remain a key part of thedelivery system providing such treatment to people withHIV/AIDS, particularly those who are low-income, inthe United States.

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1 HRSA, HIV/AIDS Bureau, Ryan White CARE Act AIDS Drug Data Report,2002.

2 The CDC estimates that there are approximately 445,000 people living withHIV/AIDS in the U.S., who are receiving care. The annual ADAP clientpopulation of approximately 136,000 represents about 30% of thispopulation (see: Fleming, P., et.al., HIV prevalence in the United States,2000, 9th Conference on Retroviruses and Opportunistic Infections, Abstract#11, Oral Abstract Session 5, February 2002, for CDC estimates).

3 ADAPs operate in all 50 states, the District of Columbia, Puerto Rico, theU.S. Virgin Islands, three U.S. Pacific Territories (Guam, the Commonwealthof the Northern Mariana Islands, and American Samoa) and one AssociatedJurisdiction (the Republic of the Marshall Islands).

4 Public Law No. 101-381.

5 Centers for Disease Control and Prevention, HIV/AIDS Surveillance Report,Vol. 14.

6 Kaiser Family Foundation, Trends in U.S. Funding for HIV/AIDS, March2004.

7 Three percent of the ADAP earmark is set aside for the ADAP SupplementalTreatment Drug Grant, grants to states with severe need. See box on“Allocation of Federal Funding to ADAPs.”

8 The term “state” is used in this report to include states, territories andassociated jurisdictions.

9 Funding for entitlement programs, such as Medicaid and Medicare, generallychanges (increases or decreases) based on the number of eligibles who enrollin these programs and the costs of providing them care.

10 Not all 54 jurisdictions responded to each question and therefore responseson any single measure may not add up to 54 jurisdictions.

11 The federal fiscal year and ADAP fiscal year periods differ—see box on“Allocation of Federal Funding to ADAPs.”

12 Based on monthly snapshot comparisons of ADAPs reporting data over thewhole period.

13 An open formulary provides access to any FDA-approved HIV-relatedprescription drug.

14 Although these 4 states reported having open formularies, 2 had not yetadded Fuzeon, and 1 had not yet added a newly approved protease inhibitorat the time of the survey.

15 Not including Fuzeon.

16 U.S.PHS/IDSA, Guidelines for the Prevention of Opportunistic Infections inPersons Infected with Human Immunodeficiency Virus, November 2001.Available: www.aidsinfo.nih.gov/guidelines/op_infections/OI_112801.pdf.

17 These measures were instituted at some point during the ADAP FY 2003,and were still in place as of April 2004.

18 It is important to note that in some cases, there are state matchingrequirements for receipt of Ryan White dollars. See box on “Allocation ofFederal Funding to ADAPs”.

19 Not including the ADAP supplemental, a 3% set aside of the total amountearmarked for ADAPs by Congress.

20 States can choose to use some of their Ryan White Title II base funds fortheir ADAPs.

21 Under the Ryan White CARE Act, an EMA’s Ryan White HIV ServicesPlanning Council can decide to allocate Title I dollars to their state’s ADAP.

22 Kaiser Commission on Medicaid and the Uninsured, Fact Sheet: State FiscalConditions and Medicaid, April 2004.

References

MethodologySince 1996, the National ADAP Monitoring Project, aninitiative of the Kaiser Family Foundation (KFF), theNational Alliance of State and Territorial AIDS Directors(NASTAD) and the AIDS Treatment Data Network (ATDN),has been surveying state and territorial ADAPs. All statesreceiving ADAP earmark funding through the Ryan WhiteCARE Act are surveyed (the number of states receivingsuch funding has increased over the course of theproject). In FY 2003, 57 jurisdictions received earmarkfunding and all 57 were sent the ADAP survey.

The survey is sent to states on an annual basis. Itrequests data and other program information for themonth of June of that year, for the fiscal year, and forother periods as specified. After the survey is sent out,extensive follow-up is conducted by NASTAD to ensurecompletion by as many ADAPs as possible. Fifty-four of57 ADAPs responded to the current survey. Data used inthis report are from June 2003 and FY 2003, unless

otherwise noted (for example, some data aresupplemented through other NASTAD data collectionefforts, such as its bi-monthly “ADAP Watch” survey).

Due to differences in data collection and data availabilityacross ADAPs, some ADAPs did not answer all surveyquestions. Where trend data are presented, only statesthat provided relevant data in all periods are included. Inaddition, in some cases, ADAPs have provided revisedprogram data from prior years and these revised data areused where possible. Therefore, data from prior yearreports may not be comparable for assessing trends.Every effort has been made to ensure that the annualreport represents the current status of ADAPs as reportedby survey respondents; however, some data may havechanged between data collection and this report’s release.Data issues specific to a particular ADAP are provided onrelevant charts and tables. ◗

11

Data

in p

aren

thes

es a

re fr

om th

e pr

ior r

epor

t, if

stat

es m

ade

chan

ges

sinc

e th

at ti

me.

The

2003

fede

ral p

over

ty le

vel w

as $

8,89

0 (s

light

ly h

ighe

r in

Alas

ka a

nd H

awai

i) fo

r a h

ouse

hold

of o

ne.

NR =

Dat

a no

t rep

orte

d.

(con

tinue

d on

nex

t pag

e)

2003

Sta

te-b

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ate

Sum

mar

y AD

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rofil

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Alab

ama

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3110

(9)

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(6)

3 (2

)$1

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%(2

5%)

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pped

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ent /

wai

ting

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Alas

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10 (9

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30

1429

(30)

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17%

(0%

)28

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Capp

ed e

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lmen

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NRNR

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NRNR

NRNR

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NRNR

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10(9

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(6)

31

65

(3)

$8,8

61,5

4011

%(1

2%)

720

$879

Arka

nsas

300%

CD4

<350

or

4510

(9)

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)3

111

(10)

12 (1

5)$3

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0% (1

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350

$856

Capp

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nrol

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810

(9)

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112

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(42%

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rado

300%

189

63

00

(12)

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(16%

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pped

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form

ular

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Conn

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110

(9)

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113

147

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)$1

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114

187

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D.C.

400%

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%)

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111

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78

Flor

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350%

5810

(9)

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% (1

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Geor

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300%

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0,50

10 (8

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29%

(31%

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646

$877

VL >

20,0

00

Guam

NRNR

NRNR

NRNR

NRNR

NRNR

NRNR

NR

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400%

8910

(9)

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)3

014

54(5

3)$2

,370

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19%

(21%

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1$7

73

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0%38

10 (9

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(6)

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143

$1,8

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% (1

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%(2

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2,89

9$4

68

Indi

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173

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0%50

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338

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71

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4810

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shal

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NRNR

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10 (9

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864

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annu

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neso

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4$4

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Stat

eFi

nanc

ial

Elig

ibili

ty a

s %

of F

PL

Med

ical

Elig

ibili

ty(C

D4=C

D4 C

ell

Coun

t, VL

=Vira

lLo

ad)

Tota

l Num

ber o

fDr

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onFo

rmul

ary

Nucl

eosi

deRe

vers

eTr

ansc

ripta

seIn

hibi

tors

(10

Drug

s Ap

prov

ed)

Prot

ease

Inhi

bito

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vere

d (8

Dru

gsAp

prov

ed)

Non-

nucl

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des

Cove

red

(3 D

rugs

Appr

oved

)

Fusi

onIn

hibi

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Cove

red

(1 D

rug

Appr

oved

)

OI P

roph

ylax

isCo

vere

d (1

4 PH

SRe

com

men

ded

Drug

s)

Othe

rM

edic

atio

nsCo

vere

d

June

200

3 Pe

rCa

pita

Dru

gEx

pend

.

Tota

l FY

2003

Est.

Budg

et(F

eder

al/S

tate

Sour

ces)

Stat

e $

Cont

ribut

ion

as%

of T

otal

Budg

et

ADAP

Clie

nts

Serv

ed In

June

200

3

Cost

-Con

tain

men

t Mea

sure

s In

Pla

ce a

s of

Apr

il 20

04

Data

in p

aren

thes

es a

re fr

om th

e pr

ior r

epor

t, if

stat

es m

ade

chan

ges

sinc

e th

at ti

me.

The

2003

fede

ral p

over

ty le

vel w

as $

8,89

0 (s

light

ly h

ighe

r in

Alas

ka a

nd H

awai

i) fo

r a h

ouse

hold

of o

ne.

NR=

Data

not

repo

rted.

Puer

to R

ico

was

onl

y ab

le to

pro

vide

clie

nt e

nrol

lmen

t dat

a bu

t not

clie

nts

serv

ed in

Jun

e 20

02 a

nd J

une

2003

. Th

eref

ore,

the

num

ber o

f clie

nts

serv

ed a

s a

prop

ortio

n of

thos

e en

rolle

d na

tiona

lly w

as u

sed

to e

stim

ate

clie

nts

serv

ed in

Pue

rto R

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in th

ese

perio

ds.

12

(con

tinue

d fro

m p

revi

ous

page

)

2003

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Sum

mar

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400%

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16$1

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(12%

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5$9

07

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sour

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510

(9)

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112

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(240

)$9

,926

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7% (2

2%)

1,13

7$8

42

Mon

tana

330%

(300

%)

134

10 (9

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(6)

30

1110

2 (2

0)$4

75,0

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50$6

76Ca

pped

enr

ollm

ent /

wai

ting

list

Nebr

aska

200%

2710

(9)

8 (6

)3

02

(0)

4 (0

)$1

,426

,808

11%

154

$575

Neva

da40

0%58

10 (9

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(6)

30

1027

$5,8

50,8

5823

% (2

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525

$810

New

Ham

pshi

re30

0%op

en fo

rmul

ary

10 (9

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(6)

30

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en fo

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ary

$2,2

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174

$1,0

66

New

Jer

sey

500%

open

form

ular

y10

(9)

8 (6

)3

114

open

form

ular

y$4

2,15

3,02

80%

3,62

5$1

,360

New

Mex

ico

300%

9810

(9)

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65 (3

0)$5

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62%

(50%

)32

7$8

72

New

Yor

k<$

44,0

00 g

ross

47

410

(9)

8 (6

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113

439

(432

)$1

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1413

% (6

%)

12,3

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,202

annu

al in

com

e

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a12

5%55

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(6)

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(41%

)1,

898

$1,0

96Ca

pped

enr

ollm

ent /

wai

ting

list

North

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879

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330%

21$6

23

N. M

aria

na Is

land

sNR

open

form

ular

y10

(9)

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open

form

ular

y$2

4,62

70%

1$6

20

Ohio

500%

(300

%)

7410

(9)

8 (6

)3

111

41 (4

0)$1

3,11

6,77

920

% (2

7%)

1,94

1$3

19

Okla

hom

a20

0%48

10 (9

)8

(6)

30

1413

(33)

$5,4

04,8

1915

% (1

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504

$850

Redu

ced

form

ular

y &

ann

ual p

er

capi

ta e

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ditu

re c

aps

Oreg

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10 (9

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(6)

31

1423

(24)

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329%

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5$3

95

Penn

sylv

ania

<$30

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gro

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10 (9

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(6)

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14 (1

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27%

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478

$1,0

55an

nual

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to R

ico

certi

fied

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r 11

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(9)

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dige

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land

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6310

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111

31 (2

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0%26

0$6

64

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31

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4210

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03

09

20$2

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95Ca

pped

enr

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wai

ting

list &

an

nual

per

cap

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ap

Tenn

esse

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10 (9

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(6)

31

950

(16)

$9,9

27,5

660%

356

$764

Texa

s20

0%39

10 (9

)8

(6)

30

711

$66,

539,

023

17%

7,00

7$7

49

Utah

200%

4010

(9)

8 (6

)3

114

(0)

4 (0

)$2

,345

,455

0% (4

%)

173

$1,2

21

Verm

ont

200%

7710

(9)

8 (6

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112

43 (3

9)$5

56,7

4031

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$470

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in Is

land

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8 (7

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(6)

30

511

(5)

$693

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0%65

$892

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inia

300%

/333

% in

CD4

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6110

(9)

8 (6

)3

114

(11)

25 (2

2)$1

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5,67

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% (1

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1,57

1$8

75No

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n VA

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ton

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148

10 (9

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31

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5 (1

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720,

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t Virg

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3110

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8 (6

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160

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g lis

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10 (9

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31

12 (1

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4$7

61

Wyo

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g20

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10 (8

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(5)

30

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02

Stat

eFi

nanc

ial

Elig

ibili

ty a

s %

of F

PL

Med

ical

Elig

ibili

ty(C

D4=C

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ell

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t, VL

=Vira

lLo

ad)

Tota

l Num

ber

of D

rugs

on

Form

ular

y

Nucl

eosi

deRe

vers

eTr

ansc

ripta

seIn

hibi

tors

(10

Drug

s Ap

prov

ed)

Prot

ease

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bito

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vere

d (8

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red

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oved

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roph

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vere

d (1

4 PH

SRe

com

men

ded

Drug

s)

Othe

rM

edic

atio

nsCo

vere

d

Tota

l FY

2003

Est.

Budg

et(F

eder

al/S

tate

Sour

ces)

Stat

e $

Cont

ribut

ion

as%

of T

otal

Budg

et

ADAP

Clie

nts

Serv

ed In

June

200

3

12

June

200

3 Pe

rCa

pita

Dru

gEx

pend

.

Cost

-Con

tain

men

t Mea

sure

s In

Pla

ce a

s of

Apr

il 20

04

1313

OR

AZ

HI

AK (9)

NM

TX

OK

AR L

AM

S

AL

(304

)G

A

SC

NC

(449

)

VAM

D DC

NJ

MA

CT

WV

(34)

UT

CO

(292

)

OK

MT

(4)

CA

WA

ID (5)

WY

TN

KY

(123

)M

O

IL

MN

WI

ND

SD

(43)

IN

MI

OH

PA

ME

VT

NH

NY

DE

Sta

tes/

terr

ito

ries

wit

h w

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ng

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s in

pla

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(9 s

tate

s).

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tal o

f 1,

263

ind

ivid

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n w

aiti

ng

list

s n

atio

nw

ide.

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te A

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Ps

wit

h W

aiti

ng

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ts, a

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f A

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l 200

4 Am

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arsh

all I

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the

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rth

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erto

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o

U.S

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gin

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nd

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14

OR

AZ

HI

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AM

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AL

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SC

NC

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D

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MA

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WV

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CO

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WY

TN

KY

MO

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MN

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ND

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OH

PA

ME

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te A

DA

Ps

wit

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nn

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ost

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inm

ent

Mea

sure

s (o

ther

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ng

list

s), a

s o

f A

pri

l 200

4

Sta

tes/

terr

ito

ries

wit

h c

urr

ent

cost

-co

nta

inm

ent

mea

sure

s in

pla

ce

and

an

tici

pat

e th

e n

eed

to

imp

lem

ent

add

itio

nal

mea

sure

s in

FY

200

4 (1

sta

te).

Sta

tes/

terr

ito

ries

wit

h c

ost

-co

nta

inm

ent

mea

sure

s in

pla

ce (

7 st

ates

).

Sta

tes/

terr

ito

ries

wit

ho

ut

curr

ent

cost

-co

nta

inm

ent

stra

teg

ies

in p

lace

bu

t an

tici

pat

ing

th

e n

eed

to

imp

lem

ent

such

mea

sure

s in

FY

200

4 (9

sta

tes)

.

No

te:

Th

e A

DA

P F

isca

l Yea

r ru

ns

fro

m A

pri

l 1 t

hro

ug

h M

arch

31.

Am

eric

an S

amo

a

Gu

am

Rep

ub

lic o

f th

e M

arsh

all I

slan

ds

Co

mm

on

wea

lth

of

the

No

rth

ern

Mar

ian

a Is

lan

ds

Co

mm

on

wea

lth

of

Pu

erto

Ric

o

U.S

. Vir

gin

Isla

nd

s

RI

15

AD

AP

Fo

rmu

lary

Cov

erag

e as

of

end

FY

200

3

Sta

te/t

erri

tori

al A

DA

Ps

that

off

er A

RV

s an

d m

edic

atio

ns

to t

reat

/pre

ven

t o

pp

ort

un

isti

c in

fect

ion

dru

gs

(OIs

) (2

4 A

DA

Ps)

.

Sta

te/t

erri

tori

al A

DA

Ps

that

off

er A

RV,

OI a

nd

oth

er m

edic

atio

ns

(28

AD

AP

s).

Sta

te/t

erri

tori

al A

DA

Ps

that

off

er a

nti

retr

ovir

als

(AR

Vs)

on

ly (

2 A

DA

Ps)

.

No

te:

Am

eric

an S

amo

a, G

uam

an

d t

he

Mar

shal

l Isl

and

s n

ot

incl

ud

ed.

Th

e A

DA

P f

isca

l yea

r ru

ns

fro

m A

pri

l 1 t

hro

ug

h M

arch

31.

OR

AZ

HI

AK

TX

OK

AR L

A

MS

A

LG

A

SC

NC

VAM

D

DC

NJ

MA

CT

WV

UT

CO

MT

CA

WA

ID

WY

TNKY

MO

IL

MN

WI

ND

SD

IN

MI

OH

PA

ME

VT

NH

NY

DE

NM

U.S

. Vir

gin

Isla

nd

s

Co

mm

on

wea

lth

of

Pu

erto

Ric

o

RI

The National Alliance of State and Territorial AIDS Directors444 North Capitol Street, NW

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Washington Office:1330 G Street, NW

Washington, DC 20005(202) 347-5270 Fax: (202) 347-5274

www.kff.org

Additional copies of this report (#7076) are available on the Kaiser Family Foundation’s website at

www.kff.org, or at www.atdn.org/access/adap, and at www.nastad.org.