National RWHAP Part B and ADAP Budgets

Based on a formula and eligibility-based distribution mechanism, state and territorial RWHAP Part B programs are eligible to receive the following categories of federal funding: Part B Base, Part B Supplemental (if applicable), Part B ADAP Earmark, Part B ADAP Supplemental (if applicable), and ADAP Emergency Relief Funding (if applicable). In FY2022, RWHAP Part B programs (n=59) were Congressionally appropriated a total of $1.29 billion, with $900 million (69%) awarded by HRSA to ADAP specifically (i.e., via Part B ADAP Earmark (n=58), Part B ADAP Supplemental (n=6), and ADAP Emergency Relief Funding (n=18)). By comparison, RWHAP Part B programs and ADAPs were awarded $1.27 billion and $900 million in FY2021, representing a 1.6% and 0% change for each.

The CARE Act was last reauthorized in 2009. In the absence of Congressional action on authorization, the program has and will continue to operate as Congress maintains annual appropriations to the program following the end of the most recent authorization sunset on September 30, 2013.

RWHAP Part B programs may choose to allocate a portion or all their Part B Base and/or Part B Supplemental to ADAP. For FY2022, 33 RWHAP Part B programs reported having allocated at least some portion of their RWHAP Part B Base and/or Part B Supplemental to ADAP. As the largest component to the RWHAP Part B program, ADAPs represented 79% of the overall Part B budget in FY2022.

Federal awards alone do not meet the needs of RWHAP Part B programs or their clients. Jurisdictions must often use other funding streams to sustain their infrastructure and service delivery, both to meet the goals of federal EHE efforts and challenges associated with emerging health care system dynamics, including the unwinding of the Medicaid continuous coverage requirement associated with the end of the COVID-19 Public Health Emergency (discussed in greater detail in Section 4).

Rebates make up the largest proportion of the overall ADAP budget for FY2022 (47%), compared with federal ADAP earmark funding constituting 34% of the overall ADAP budget. Rebates – payments received by many ADAPs from pharmaceutical manufacturers after paying for medications for clients – account for both the repayment to ADAP from a manufacturer for a drug expenditure and any additional savings generated, which may be used to offset ADAP expenditures and/or allocated to the state or territorial Part B program for allowable services and activities outlined by HRSA.

Separately from rebates, ADAPs may also generate program income, which includes payments received from third-party payers for the usual and customary cost of 340B-discounted medications filled for insured ADAP clients. In FY2022, $82 million was the amount of program income contributing to the budgets of eight ADAPs, representing 3.5% of the total ADAP budget. Six RWHAP Part B programs reported receiving program income from their ADAPs, totaling $38.7 million.

Additional sources that may be available to ADAPs include RWHAP Part A allocations (4 states in FY2022), carry-over from prior Part B Base or ADAP Earmark awards, state general revenue funding, and private donations.