ADAP Shortfall Relief - The Arizona Department of Health Services seeks ADAP Emergency Relief Funds (ERF) to sustain vital HIV treatment and coverage for 2,200 low-income, uninsured, or underinsured Arizonans living with HIV. The program aims to prevent an ADAP waiting list, preserve its comprehensive drug formulary—including Long-Acting Antiretroviral Therapy (LAART) and Hepatitis C medications—and maintain insurance assistance as resource pressures escalate. Arizona’s ADAP serves as a payer of last resort, affording critical medication and premiums support for those who cannot access adequate private or public coverage. Environmental factors driving urgent need include a substantial, ongoing reduction in rebate revenue due to Medicare’s $2,100 maximum out-of-pocket policy, sharply raising ADAP’s prescription costs. Resistance by uninsured clients to enrolling in alternative insurance coverage means ADAP incurs full 340B pricing for medications, further straining the budget. At the same time, premium increases in the state’s Federally Facilitated Marketplace are projected for late 2025–2026, increasing the per-client cost of insurance support and challenging coverage continuity. Current annual copay costs are estimated at $1,212,105, and only 75% can be supported by base funding; the requested $688,934 in ERF funds will help cover copays for approximately 554 clients. Monthly medication costs (including dispensing fees) total $66,519 for 1,367 clients, with an average annual dispensation cost per client of $583.92. Pharmacy Benefits Management (PBM) administrative fees total $19,500 per month, while eligibility processing services cost $65,000 monthly. These fixed costs stretch capacity as the client population grows through new HIV diagnoses and re-engagement in care, and as more people lose income or health insurance. ERF support will allow Arizona ADAP to: (1) Prevent a waiting list and maintain uninterrupted access to life-saving HIV and HCV drugs for all eligible clients; (2) Offset anticipated copay shortfalls ($688,934), premium inflation, and higher drug pricing; (3) Sustain PBM and streamlined eligibility processes (PBM: $19,500/mo; eligibility: $65,000/mo); (4) Continue insurance premium assistance, including support for Medicare Part D; (5) Avoid staff and service reductions that could slow eligibility, enrollment, and timely client access; (6) Enhance enrollment and benefits for new and existing clients, leveraging improved eligibility confirmation and income verification tools; (7) Reinforce collaborative cost-saving measures (e.g., contracting with Cardinal Health, AIDS Crisis Task Force, MMCAP Group Purchasing, 340B pricing, and maximizing Medicaid enrollment). Arizona requests ERF funds to stabilize operations amid funding volatility, ensure continuity of care, and support the state’s contributions to ending the HIV epidemic. The requested resources will be targeted to close operational gaps, meet new demand, and protect vulnerable client groups from coverage, medication, or adherence interruptions, especially those facing financial hardship or experiencing housing instability.
