State Could Lose Some U.S. Funds for AZT Drug

It seemed a promising program when $7.6 million in federal funds were turned over to the state Office of AIDS last September to provide the drug AZT free to low-income AIDS patients in California.

The money was to have supplied AZT--which has proved effective in delaying the progression of acquired immune deficiency syndrome--for 700 to 1,000 of the state’s approximately 5,000 living AIDS victims for up to a full year. Treatment with AZT costs between $8,000 to $10,000 annually.

But as the program nears its halfway point, Office of AIDS chief Thelma Fraziear acknowledged Thursday that it has gotten off to such a slow start that unhappy federal officials have told her that they will consider, as early as next month, redistributing the money to other states.

Fraziear said in an interview that records show that only $38,000 has been spent by county health agencies to provide AZT to about 40 patients. But she said “informal” reports from Los Angeles, San Francisco and other localities indicate that the amount of distribution is higher than that and has increased this month.

Time Won’t Wait

An unamused regional federal health official, Alan Harris, said in San Francisco on Thursday:

“California has gotten off to a slow start. And knowing how important it is to the persons getting it, time isn’t going to wait. We would anticipate that at some point, if other states exhausted all the funds, the Public Health Service would move funds from slow states to fast ones.”

Actually, Fraziear said, she has been informed that two or three other states already have exhausted their federal funds, which originally were distributed according to the share of total national AIDS cases each state had reported.

The AZT situation is not the only instance in which federal funds to combat AIDS have apparently been spent more slowly in California, and specifically in Los Angeles County, than U.S. officials would like.

Dr. Sam Metheney of the Health Resources Service Administration, in a recent letter to Dr. Caswell Evans, assistant director of Los Angeles County’s health services program, expressed concern that a $400,000 federal grant made last August for county contract programs to help AIDS patients has not yet been committed by the county.

‘An Inordinate Delay’

“There has been an inordinate delay in consummating some of these contracts,” said Dr. Charles Hostetter, of the AIDS service demonstration program of the Health Resources Services Administration, in a subsequent statement.

“We’re sure that part of the reason is the county’s contracting and procurement bureaucracy,” Hostetter said. “We felt we should express our concern so we could iron out whatever problems may be standing in the way. . . . It wasn’t that we made any threats. . . . It’s just that we feel a sense of urgency and want to help remove any obstacles in the way.”

Evans, contacted for comment, said a delay in implementing programs “certainly is a problem,” but that the county has “been the victim of our own success.”

He said that the county has received so many AIDS-related grants that a backlog has developed in processing them for presentation to the Los Angeles County Board of Supervisors for authorization to spend the money.

In the case of the larger federal AZT grant, Fraziear said, the state has recently taken steps that should smooth the way toward making AZT available on the scale originally envisioned.

Before the program expires in September, she said, she expects that California will probably have spent all the federal money, although she also acknowledged asking federal officials whether the money could be “rolled over” and spent in the next fiscal year.

Fraziear said that on Feb. 1, the state raised, from $11,000 to $22,000, the amount of money an individual could earn annually and still qualify for free AZT.

She said it had been ascertained that $11,000 was really too low a figure.

In addition, she said, the qualification process has been simplified. Under present procedures, all a person has to do is submit his or her 1986 state income tax return, and if the income reported is under $22,000, then the person qualifies, as long as he or she has an AZT prescription from a licensed physician.

Fraziear said that part of the reason the program start was delayed in California is that the federal funds did not cover the counties’ costs in administering the program and some counties were slow in signing contracts with the state to carry out the distributions.

But as of Thursday, the state official said, 17 of the state’s 19 most populous counties, excepting only San Francisco and Ventura, had signed the contract.

“San Francisco will sign shortly,” she added. “But I’ve been told they’ve already started distributions there anyway.”

Fraziear said the state has already distributed about $1.8 million of the federal money to the counties, so they have plenty of money on hand to begin paying for the AZT.

“I do think it will be spent,” she said.

Times staff writers Robert Steinbrook and Marlene Cimons contributed to this story.