Advocates for AIDS patients are lobbying legislators for $122,000 to buy a life-prolonging drug for sufferers of the deadly virus.

Currently, only two programs provide the drug AZT for AIDS victims without resources to buy it. One is Medicaid. The other is a federal grant program slated to run out in March.AZT, also known as azidothymi-dine or Retrovir, is the only drug federally approved for use in treating AIDS. It reduces the severity of symptoms associated with the disease and prolongs life by keeping the human immunodeficiency virus from multiplying.

David Sharpton, executive director of People With AIDS Coalition of Utah, argues that with AZT, patients are able to be more productive working members of a community - and for longer.

The federal program was devised for that purpose - to aid AIDS sufferers who don't have $8,000 a year to spend on AZT but who don't want to quit working and apply for welfare to obtain Medicaid.

Sharpton maintains that taxpayers save money by paying for the drug rather than funding the increasing medical expenses incurred by patients who don't take it.

The federal grants, established by Congress in September 1987, were divided among states based on the number of AIDS cases they reported. The program was to expire last Sept. 30, but Congress approved a last-minute reauthorization of funds.

Sen. Orrin Hatch, R-Utah, was among the principal supporters of extending the grants to March 30.

But time is running out. Officials of Utah Department of Health are concerned that in the absence of federal grants, AIDS patients will have no choice but to quit their jobs and go on Medicaid to attain the drug.

State Medicaid, already faced with cutting back medical services in order to serve the growing number of needy Utahns, doesn't want more clients.

An option, health officials said, is for patient advocates to lobby the insurance industry, as well as the Legislature.

"Insurance companies cover hospitalization but not AZT," said Rod Betit, director of the Division of Health Care Financing. "We tracked the medical records of people with AIDS and have seen lower costs per person annually and fewer hospitalizations in the long run when people are on AZT."

Health care financing analysts said the cost of caring for someone with AIDS was $44,000 a year before AZT came into use. Six months after patients began taking AZT, their average costs dropped to $19,000.

After nine months on AZT, patients' annual medical bills fell to $9,000.

Medical costs are expected to continue sliding the longer patients on AZT survive, Sharpton says.