Doug Rose has been living with HIV for nearly a decade. Eight series of drug cocktails have kept the New Yorker healthy all that time, and an extensive public health insurance plan for people with the virus has made those medications, which run about $14,000 a year, affordable.

The drugs work for only so long, though. Every two or three years, he and his doctor must tweak his regimen. Having been on his current six-drug cocktail for two years, Rose says he is running out of options. A new class of drugs slated to come on the market this spring could be his next best hope–but they could also mean financial ruin for the state’s AIDS treatment insurance program.

Rose is enrolled in the AIDS Drug Assistance Program, a.k.a. ADAP–a national network of state-run treatment subsidy programs for people with HIV who are uninsured and do not qualify for Medicaid. ADAP is a political football that federal and state legislators toss around during budget battles every few years. This year, however, marks the first time Rose is really worried: Both the local and national economies are tight, President Bush wants to go to war, and unemployment and the number of Americans without any health insurance is rising.

Come early this year, Rose and about 17,000 other HIV-positive New Yorkers might lose access to some of the hundreds of drugs, nutritional supplements and extensive primary health care New York’s ADAP provides. The state Department of Health recently projected a $50 million shortfall in the program next fiscal year if funding is not increased. ADAP already carries a deficit this year because of a growing caseload, rising drug prices and flat funding from the feds. While several AIDS drug companies recently implemented a two-year price freeze on their meds, the budget shortfall is still expected to rise.

For New York, this is a wake-up call about a crisis most states across the country have been dealing with for a few years. Thirteen states currently have waiting lists for patients to enter their AIDS insurance programs, according to the AIDS Treatment Data Network, an information clearinghouse. The group expects that another six–including New York–will start making people wait or will create stricter eligibility requirements early this year.

In November, state health officials began publicizing a contingency plan. It would restrict coverage of medications and nutritional supplements and limit the number of doctor visits a client can make in a year.

As the state delves deeper into its cost-containment plan, AIDS activists fear, there could be a real crisis. “These are people who have been on therapy for a very long time, are dealing with wasting syndromes and need nutritional supplements to keep their weight up,” warns Lei Chou, director of the Access Project at the Data Network. “There would be a slow slope downward.”

Chou says health department officials have shared with him some of their as-yet-unpublished plans for worst-case scenario cuts, and they go so far as requiring that all clients reapply for the program.

More support from Washington is not likely to come. The new Congress is expected to approve President Bush’s proposal to keep ADAP funding at its current level, which would mark the first time in ADAP’s 15-year history that the feds did not increase the program’s budget at all.

That puts the pressure back on Albany. Says Chou, “We’re going to have to do something drastic if the state doesn’t step up to the plate.”

But with the state predicting a $2 billion gap in its overall budget for the current fiscal year and analysts warning of a gap reaching as high as $10 billion next year, ADAP may have to wait in line behind other spending priorities. The Pataki administration has been leaning heavily on the feds until now: State officials have cut New York’s contribution from 14 percent of the state’s ADAP budget in fiscal year 1997 to 6.2 percent this year, according to the Data Network. California, by comparison, with the largest caseload of any state, gives 40 percent.

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The AIDS safety net concept was born from the treatment crisis of the late 1980s, when the first HIV drug, AZT, came on the market at a cost of more than $6,000 a year. Recognizing that comprehensive reform in drug pricing and health care was too far off to benefit dying AIDS patients, activists opted to work with the drug companies and the feds to cobble together a government drug-purchasing program. In 1990, with ACT UP busy shutting down the New York Stock Exchange to demand movement on treatment access, Congress formalized the AIDS Network under the landmark Ryan White Comprehensive AIDS Resources Emergency Act.

For those without private insurance who did not qualify for Medicaid–specifically people who were not disabled by the virus or who earned more than the poverty level–ADAP was literally a life-saver.

Since then, ADAP costs have skyrocketed. In 1995, enrollment and spending in the program both exploded, as protease inhibitors and combination therapies hit the market at a cost of about $12,000 for a year’s worth of medication. Thanks to those drugs, people with HIV are now living longer–annual death rates have dropped by 70 percent and an estimated 1 million people in the U.S. currently live with the virus. As a result, the combined federal and state budgets for the AIDS drug insurance system have grown 314 percent since 1996, to $969 million this year. The program covers about 140,000 people nationally.

ADAP, in short, has been damned by its own success. “The programs are being driven by–guess what–the drugs work,” says William Arnold, chair of the ADAP Working Group, a national coalition of AIDS activists and drug companies.

Now, ADAP is facing another drug price explosion: The first new class of meds since protease inhibitors, called fusion inhibitors, is slated to debut this spring as a treatment for people whose bodies are no longer reacting to the existing meds.

“They are essential for people whose current regimens are not working,” says Rose, an organizer with the Save ADAP Campaign, a coalition of grassroots activists. He expects that once his current six-drug cocktail stops working, these new meds–the first of which is called T-20–“could become crucial to me in my continued survival.”

Hoffman-La Roche, the company which will market T-20, has yet to announce a price, and many activists fear that Roche’s recent pricing of an upcoming Hepatitis C medication, Pegasys, is a bad indication of what’s to come: Pegasys will sell for close to $14,000 a year.

The New York State health department estimates that adding T-20 and the Hepatitis C drug to its ADAP coverage would cost an additional $12 million a year.

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Everyone nevertheless expects that New York’s ADAP will cover the new drugs. The state arguably has the most progressive program in the country: A single adult earning up to $44,000 a year is eligible to receive any of the hundreds of meds the program covers, and the state has never had a waiting list. (By comparison, North Carolina’s income limit is set at about $10,700, and Alabama has a waiting list more than 170 people long.)

New York is also one of 11 states that cover all meds recommended by the U.S. Public Health Service for fighting off opportunistic infections like Hepatitis C, which cause the majority of deaths among people with AIDS.

The health department did not return calls for this story. But Chou says that if the state does decide to cover T-20, it will likely come at the expense of these other drugs. Officials have made it clear to him that only antiretroviral medications such as protease and fusion inhibitors are safe from cuts.

Before going that far, though, Albany officials are starting to cut costs by pushing ADAP clients to sign up for Medicaid and other health insurance programs like Family Health Plus. New York is one of a handful of states that allows people with HIV who do not have full-blown AIDS to receive Medicaid, as long as their medication expenditures bring their income below the poverty level. Washington has granted New York a waiver to help pay for those clients. In 2000, the most recent year for which data is available, 64,700 New Yorkers with HIV/AIDS were on Medicaid, at a cost of $1.8 billion. Half of that is paid by the feds.

For now, experts agree that Medicaid is a great option for clients–once they get on. “New York has a very generous Medicaid program,” says Christine Lubinski of the HIV Medicine Association.

But getting into Medicaid is not so easy. Income requirements would prevent a number of current ADAP clients from qualifying. And ADAP also often becomes crucial, many of its advocates note, because it can take a few months for the state to process Medicaid applications.

There is also concern for undocumented immigrants living with HIV and AIDS: For them, ADAP is their only health care option. Federal law prohibits them from receiving Medicaid. And with Bush and Congress increasingly tightening immigration laws since the September 11 attacks, some advocates fear that Albany’s efforts to cut costs will make undocumented New Yorkers an obvious target.

Tata Traore of Harlem United helps dozens of HIV-positive immigrants from West Africa get treatment. “None of them were taking medication before they got ADAP because they couldn’t afford it,” she says.

Exactly how the state health department’s cost-cutting contingency plan will play out is still unclear. Officials have said they plan to first limit the number of clinic and dental visits a client can make in a year, allow only five refills per prescription, mandate certain generic drugs and restrict daily quantities of nutritional supplements.

From there the state will look to eliminate coverage of nonessential drugs and, should all else fail, reduce drugs and covered services even further.

While Arnold of the AIDS Working Group says the initial tier of changes shouldn’t create any real harm, he fears that as the cuts go deeper things will get more serious. And he’s adamant that New Yorkers won’t let ADAP wither away. Long before it does, he says, “we will have people chaining themselves to the fence of the White House.”