The National ADAP Working Group is a unique ad hoc coalition of HIV/AIDS community-based organizations, health care providers, biotechnology and pharmaceutical research companies. Our mission is to ensure adequate access to HIV/AIDS-related therapies through the AIDS Drug Assistance Program (ADAP), funded under Title II of the Ryan White CARE Act.

ADAP has played a key role in the federal and state response to the U.S. domestic AIDS epidemic. Since the advent of Highly Active Anti-Retroviral Therapy (HAART) in 1996, ADAP has provided preventative medications to hundreds of thousands of Americans living with HIV who are uninsured or underinsured, keeping them out of costly hospital care and off Medicaid. With advances in treatment research, managing HIV disease has become a life-long commitment. Combined with new HIV infections at the rate of 60,000 per year, the demand for ADAP continues to grow.

In order to quantify this growing need, the National Alliance of State and Territorial AIDS Directors (NASTAD), working with national ADAP experts,
have utilized a pharmacoeconomic model¹ to project the amount of funding needed to adequately treat Americans eligible for ADAP in upcoming fiscal cycles. Using current utilization trends as reported in a June 2007 survey through the National ADAP Monitoring Project², this model computes the increased annual cost of pharmaceuticals to ADAP, based on current program dispensing patterns, increases in new ADAP clients at historical rates and drug cost inflation.

This pharmacoeconomic model enables us to estimate the economic need of the ADAP program for the upcoming fiscal year. This “need” number represents the amount that would allow each state to provide treatment for ADAP clients under the current eligibility rules for each individual state.

For the next fiscal cycle, however, two recent changes to the environment in which ADAP operates suggested the need for a revised approach to estimating the budget need. First, reauthorization of the Ryan White Care Act has resulted in a significant shifting of ADAP Earmark funds between states due to a revised distribution formula and an increased proportion of the allocation set aside for ADAP Supplemental funds to address access disparities in FY07. Waiting lists have been eliminated, and formularies and income eligibility criteria have been increased in states, where access has been limited for years.

The second change that has impacted ADAPs nationally is implementation of Medicare Part D. Many individuals who had previously relied on ADAP for access to medications have enrolled in Part D. Those eligible for the Low Income Subsidy (LIS) have the vast majority of their drug expenses paid by Part D. However, many other individuals with Part D coverage continue to receive assistance from ADAPs to meet their deductibles and co-payments, and receive full coverage from ADAP when they reach the “donut hole”.

Due to both of the environmental changes (Ryan White funding changes and Medicare Part D) and an increase in State appropriations for ADAP and increased rebates from drug companies, ADAPs nationally were in a state of budget “equilibrium” in FY07 and were able not only to reduce formulary and eligibility disparities between states but to provide access to medications to all eligible individuals. This has led to a revised focus of the projection model, to estimate the incremental costs required to provide coverage for new clients enrolled in ADAPs in FY08 and FY09. Total funding is calculating by adding the incremental costs to the inflation-adjusted drug costs for the base population of ADAP clients enrolled in FY07. Additionally, rather than estimating medication costs through modeling, ADAP drug expenditure data are used to calculate the average monthly medication cost per client.

The analyses does not attempt to account for further possible changes in eligibility criteria; drug formularies; changes in state Medicaid or other public health insurance programs; or other possible variables that could impact state ADAPs in the future.

1 J Acquire Immune Defic Syndr. 2000 Apr 1;23(4):302-13. Impact of zidovudine-based triple combination therapy on an AIDS drug assistance program. Mauskopf JA, Tolson JM, Simpson KN, Pham SV, Albright J. Research Triangle Institute, Research Triangle Park, North Carolina, USA.
2 The National ADAP Monitoring Project is a collaborative project of the Kaiser Family Foundation and the National Alliance of State and Territorial AIDS Directors (NASTAD).

Projection Summary

For FY2009, ADAP needs a federal increase of $134,845,718 to adequately meet the projected program demand. In addition, the model estimates a federal ADAP shortfall in the amount of $39,591,618 for FY2008.

Summary Table

	FY 2008	FY 2009
Model Projected Cost for New ADAP clients Based Program Drug Inflation Component FY08 Revenue Need Remaining	$25,207,129 + $43,282,393	$73,810,172 $45,257,453 $49,489,522
Total ADAP Budget Increase Required FY2007 Federal Appropriation Increase	$68,489,522 - $19,000,000	$168,557,147 -$0
Total Revenue Increase Needed 80% Federal Share of Increase 20% State Share of Increase	$49,489,522 $39,591,618 $9,897,904	$168,557,147 $134,845,718 $33,711,429

Projection Model Details

1. Base population and estimated monthly program growth - Using annual ADAP utilization data (number of clients who have filled at least one prescription), from June 2006-June 2007, the monthly program growth rate is estimated to be approximately 386 clients. The increase in new clients is shown in the accompanying chart, starting at the beginning of FY08 (April 2008). Also shown is the total client population, based on the 101,049 clients utilizing ADAP in June 2007. Monthly client utilization is projected forward from the beginning of ADAP FY2008 (April 1, 2008) to the end of FY2009 (March 31, 2010).

Population Growth Chart

Year	Month	Cumulative New Clients	Total Clients
2008	April May June July August September October November December	386 771 1157 1542 1928 2313 2699 3084 3470	104,904 105,290 105,675 106,061 106,446 106,832 107,217 107,603 107,988
2009	January February March April May June July August September October November December	3855 4241 4626 5012 5397 5783 6168 6554 6939 7325 7710 8096	108,374 108,759 109,145 109,530 109,916 110,301 110,687 111,072 111,458 111,843 112,229 112,614
2010	January February March	8481 8867 9252	113,000 113,385 113,771

2. Cost of therapy per-member-per-month (PMPM) - The cost of providing drugs to ADAP clients (inflation adjusted for the projection period) is based on the weighted average cost ($997.54) reported by ADAPs in June 2007. This approach takes into account the variability of client needs for ADAP support for both ADAP full pay and “partial pay” (e.g., partial private insurance and Medicare Part D) clients. The cost is adjusted based on the rate (19.1%) of additional “discount” that ADAPs are able to achieve through rebates and cost recoveries to arrive at a net cost of $807.01 in June 2007. For FY2009 the PMPM for drugs is calculated to be $862.46.

3. Base program drug cost inflation component - In FY2007, the total reported budget of all ADAPs was $1,502,860,871. Under the Federal 340B Drug Program, in which all ADAPs participate, the increase in drug prices is limited to the Consumer Price Index for All Urban Consumers (CPI-U). An annual inflation rate of 2.88%, the average CPI-U for the past five years, was applied to the total budget to project the cost of maintaining coverage for the ADAP “base” population.

4. Health system costs - The model estimates the impact on health care system costs as a function of clients’ health status and their access to antiretrovirals and medicines for the prevention and treatment of opportunistic infections. When individuals are not provided access to these medications their HIV disease continues to progress, resulting in an increased incidence of opportunistic infections, and increased medical treatment and hospitalization costs. The model was used to estimate the FY2009 health system costs that would be incurred if funding is not available to cover new client growth. The disease status of these new clients was modeled using the CD4 count distribution of new clients in 2007 from four large states (CA, FL, NJ and NY) which represent 44.5% of June 2007 clients served. If funding limitations for ADAP in FY2009 were to leave the estimated 386 clients per month without access to medications, it is projected that 7,375 additional cases of opportunistic infections would occur. This includes 5,000 more cases of cancer (Kaposi’s sarcoma and lymphoma) and an additional 1,251 cases of pneumocystis carinii pneumonia (PCP), a fungal infection that is a major cause of death in people with HIV. In this scenario the national health care system would spend $83,944,327 on medical treatment for opportunistic infections. This represents an increase of $58,496,443 over what would be spent on such treatment if ADAPs had sufficient funding to enroll and provide medications to these clients.

5. Funding needs and clients - The following chart illustrates the number of ADAP clients that could be served by the model's estimate of needed revenues in FY09:

Funding Source	Need Amount	Number of Clients
Federal Share (80%)	$134,845,718	13,029
State Share (20%)	$33,711,429	3,257
Total Need	$168,557,147	16,286

Conclusions

• ADAPs achieved a measure of stability in FY2007 due to environmental changes and increased revenues, which allows a revision in the model to focus on the future incremental costs to ADAP.
• The revised methodology reduces the number of assumptions required and provides more accurate assessment of actual drug costs.
• There is an estimated need for $49,489,522 in additional revenue in FY2008 to allow continued growth.
• The Federal Need in FY2009 is estimated to be $134,845,718 to allow ADAPs to continue to meet the enrollment demands of new clients, as well as pay for the annual inflation costs for drugs to their base population.
• The model estimates that the national health system would avoid costs of $58,496,443 for medical treatment of opportunistic infections if ADAPs are able to provide access to antiretroviral therapy for new clients in FY2009.

The ADAP Working Group endorses the enclosed budget estimates as an accurate projection of the costs of providing necessary HIV/AIDS treatments to uninsured and underinsured ADAP clients in Fiscal Year 2009, (April 1, 2009 - March 31, 2010). It is not possible to anticipate changes in the standard of HIV care that may occur within the timeframe of this projection. The projection will be updated whenever new and validated information that impacts the projection becomes available. It is not possible to anticipate all potential Medicare and Medicaid actions which have the potential to change access to drugs for thousands of HIV+ patients in state level Medicaid “cutback” actions or all possible impacts of the evolution of Medicare Part D in FY2008 & 2009. What we can say is ADAP history clearly indicates that “normal conditions” have produced a net monthly increase in the number of HIV+ Americans who will need ADAP services in every state, territory and political jurisdiction. With adequate ADAP resources we will be able to treat them. If resources to ADAP are inadequate –ADAPs will NOT be able to treat them, but health care costs will increase in other areas as medical providers seek to treat opportunistic infections resulting from disease progression.