What are ADAPs?¹

AIDS Drug Assistance Programs (ADAPs) provide HIV-related prescription drugs to low-income people with HIV/AIDS who have limited or no prescription drug coverage. With more than 250,000 enrollees in calendar year (CY) 2015, ADAPs reached approximately one third of people with HIV receiving care nationally, and provided HIV medications to half of all people with HIV on treatment in the U.S.^2,3

ADAPs began serving clients in 1987, when Congress first appropriated funds to help states purchase the only approved antiretroviral (ARV) drug at that time, AZT.⁴  In 1990, they were incorporated into the newly enacted Ryan White Comprehensive AIDS Resources Emergency (CARE) Act, now known as the Ryan White Program.^5,6 Since Fiscal Year (FY) 1996, Congress has specifically earmarked funding for ADAPs through Part B of Ryan White, which is allocated by formula to states.⁷ Ryan White has been reauthorized by Congress four times since first created and changes have been made to ADAPs over time. While the current authorization has lapsed, there is no sunset provision in the law. Therefore, ADAP, and the Ryan White Program more broadly, can continue to be funded through annual Congressional appropriations.

All states, Washington, D.C., and other U.S. territories receive federal ADAP earmark funding through Part B of Ryan White. In addition to the ADAP earmark, ADAPs receive state funding and contributions from additional sources, including other parts of Ryan White, but this support is highly variable and largely dependent on local decisions and resources. ADAPs are not entitlement programs – annual federal appropriations and, where available, other funding, determine how many clients ADAPs can serve and the level of services they can provide. Each state operates its own ADAP, including determining eligibility criteria and other program elements, such as formularies, resulting in significant variation across the country.

ADAP Budget

ADAP funding and budget composition is highly variable from year to year, and influenced by a broad range of factors. In recent years, the budget has also included transfers from other parts of Ryan White, as well as emergency funding to help alleviate ADAP waiting lists and unmet program needs.

• The national ADAP budget (including all funding sources) was $2.02 billion in FY 2016, lower than it was in FY 2015 ($2.24 billion).
• Through FY 2012, the federal ADAP earmark was the largest component of the budget.⁸ It has declined as a share of the budget in recent years, and accounted for 39% of the FY 2016 budget, behind drug rebates.
• Drug rebates accounted for 40% of the overall ADAP budget in FY 2016, a drop from the previous year.
• State funding accounted for 6% of the budget.
• Other funding, including ADAP emergency funding; Part B ADAP supplemental awards; Part B supplemental contributions directed to ADAPs; transfers to ADAPs from state Part B base awards and from Part A; and other state/federal funding accounted for 16% of the overall ADAP budget.
• In FY 2016, 59 jurisdictions – all U.S. states, Washington, D.C., and other U.S. territories – received federal ADAP earmark funding. In addition: 38 ADAPs received drug rebates; 28 received state funds; 20 received other state/federal funding; 17 ADAPs received Part B base contributions; 15 states received Part B supplemental awards (not specific to ADAP) and, of those, 10 directed some of that supplemental funding to ADAP; 14 received emergency funds; 13 received direct Part B supplemental treatment funds; and 6 received transfers of Part A funds.
• Among the states reporting data in both FY 2015 and FY 2016, 30 experienced net decreases in their budgets.

ADAP Formularies

ADAP formularies (the list of drugs covered) vary significantly across the country. In 2016:

• 6 states had an open formulary
• All offered all of the drugs identified in the “recommended regimens” in the nation’s HIV treatment guidelines.⁹
• Of the 45 ARVs currently available (including multi-class combination products and generics), ADAP formularies covered between a low of 37 drugs in Arkansas to all 45 in 27 states.
• In addition to ARVs, many ADAPs provide access to drugs to treat opportunistic infections and HIV co-infection (e.g. treatment for hepatitis).

ADAP Expenditures and Prescriptions

In FY 2015:

• Drug expenditures totaled $1.315 billion, with an additional $310 million spent on insurance assistance (premiums and cost sharing).
• Annual per capita drug spending was $8,663 for drug purchases and co-payments and $2,720 for insurance purchasing and continuation.

ADAP Eligibility Criteria

The Ryan White Program requires all ADAP clients to be HIV-positive, low-income, and under- or uninsured, but no income level is specified under current law. Each ADAP determines its own eligibility criteria. As of January 1, 2015:

• All ADAPs have state residency requirements and many require proof of residency.
• Financial eligibility ranges from 200% FPL in 4 states to 500% FPL in 10 states.¹⁰ In some cases, eligibility differs for the various program components within individual ADAPs (e.g., the insurance purchasing program vs. the direct medication program).

ADAP Clients

ADAP client enrollment and utilization have grown over time and are now at their highest levels to date. Client demographics vary by state and region, but nationally have remained fairly constant over time.

• 257,396 people were enrolled in ADAPs in CY 2015, ranging from 140 in Wyoming to more than 35,000 in California.
• Of CY 2015 clients enrolled, ADAPs provided medications only to 101,418 clients and insurance coverage (or insurance coverage and medications) to 124,099 clients.
• A majority of clients were people of color (69%) and most were male (78%).
• Three quarters (76%) had incomes at or below 200% of the Federal Poverty Level, (FPL), including over half (58%) with incomes at or below 138% FPL.
• Half of clients were between 45-64 years of age (50%), followed by those ages 25-44 (40%).
• Three quarters (77%) of all ADAP clients were virally suppressed (having a viral load of below 200 copies/ml), which is a higher share than for people with HIV nationwide (57% of those in care).¹¹ Viral suppression is higher among clients receiving insurance assistance (88% of whom are virally suppressed) compared to those receiving only medications from ADAPs (73% of whom are virally suppressed). Viral suppression is critical to achieving optimal individual health outcomes and research has shown there are also preventive benefits – when an individual with HIV is virally suppressed, the risk of sexual transmission is negligible.^12,/sup>13<

Cost-Containment Measures and Waiting Lists

ADAPs must balance client demand with available resources on an ongoing basis. Because of recent economic conditions, instituting cost-containment measures or management practices is common. In the past, waitlists were used as a primary cost-containment measure. Waitlists peaked in September 2011 when 9,298 individuals in 11 states were eligible for ADAPs yet unable to access medications. Currently, waitlists have been eliminated as a result of an influx of reprogrammed Ryan White funding and separate emergency funding between 2010 and 2013. In some cases, ADAPs received higher rebates from drug companies and individual ADAPs implemented stricter cost-containment measures such as capped enrollment and reduced eligibility and formularies. Few states currently have cost-containment measures (e.g., enrollment caps and waiting lists) in place, although as they were more common in the past when ADAPs faced budget crises, their use will be important to monitor their use moving forward.

Drug Purchasing Models

All ADAPs participate in the 340B program, enabling them to purchase drugs at or below the statutorily defined 340B ceiling price. ADAPs conduct drug purchasing through different mechanisms:

• 7 ADAPs centrally purchase and dispense medications through their own pharmacy or contract pharmacy (known as “direct purchase”).
• 21 ADAPs pay retail pharmacies for drugs and subsequently bill manufacturers for the 340B rebate amount.
• 7 purchase through a “hybrid model,” using an existing entity to purchase drugs and submitting rebate claims for any additional discount amount.
• 14 use a “dual model,” purchasing medications through their own pharmacy or contract pharmacy and paying retail pharmacies for drugs, later filing for rebates.
• Insurance Purchasing & Coordination

Clients have gained access to new coverage opportunities under the Affordable Care Act (ACA). In adjusting to the new health coverage landscape and in complying with Ryan White’s payer of last resort requirement, ADAPs have intensified their efforts to coordinate with other health coverage entities, including private insurance marketplaces and Medicaid.¹⁴ In many cases, providing insurance assistance is more cost effective for ADAPs (the average per capita cost of a client enrolled in insurance coverage is about one third of that of clients enrolled in direct drug programs) and doing so provides clients with robust coverage. ADAPs assisted with insurance coverage for 124,099 clients in 2015, at a cost of $310 million.

Only 3 ADAPs (ID, MS, SD) did not use funds for purchasing health insurance in 2015. The remaining states offer varying forms of insurance purchasing/coordination, including assisting with Medicare, employer-based coverage, and individual market coverage. While most ADAPs seek to leverage the opportunities provided by the ACA, not all ADAPs with insurance purchasing infrastructures use them to purchase qualified health plans in the health insurance marketplaces created by the law.

Medicare Part D

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) added an outpatient prescription drug benefit, Part D, to the Medicare program.  As the payer of last resort, ADAPs must ensure that any Medicare Part D-eligible client is enrolled in Part D and that ADAP is not paying directly for prescription drug expenses. However, ADAPs can help with clients’ out-of-pocket costs associated with Part D coverage. In CY2015, 13% of clients were served by Part D.

Under the ACA, as of January 1, 2011, payments made by ADAPs on behalf of a Medicare Part D beneficiary count toward “TrOOP” (a beneficiary’s true out-of-pocket costs), allowing the client to pass through the “doughnut hole” (or, coverage gap) into catastrophic coverage.¹⁵

Looking Ahead

ADAPs continue to play a critical role in providing prescription drugs and a pathway to insurance coverage for low- and moderate-income people with HIV who would otherwise have limited access. In addition, ADAPs often serve as a bridge to other care and support services. As the number of people living with HIV has increased in the U.S., so too has the need for ADAPs.  While ADAPs have faced challenging national and state fiscal conditions in the past, leading to the creation of waiting lists, emergency funding, increased rebates from manufacturers, and the implementation of the ACA have relieved much of this pressure. Looking ahead, as lawmakers continue to debate the future of the ACA, as well as federal spending more generally, it will be important to monitor the impacts of any policy changes on ADAPs and the clients they serve.