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The end of AIDS? Who will pay for it?

Posted on by Laurie Garrett

This week inside the World Bank headquarters a debate was staged, in honor of the XIXth International AIDS Conference. In a room packed with economists Columbia University’s Jeffrey Sachs and Michel Sidibe, Executive Director of the UNAIDS Programme argued for the proposition: Accelerated, exceptional funding for HIV/AIDS programs should be encouraged, despite the world recession. Arguing against the proposal was Mead Over of the Center for Global Development and Roger Englund, a UK development expert. Before the debate began moderator Richard Horton, the editor of The Lancet, polled the audience, finding well over 95 percent favored the proposal. But when the debate was over, that support had fallen to perhaps 80 percent.

What happened in the colorfully staged World Bank debate mirrors an unfolding shift in the Big Picture of global health. Amid recession and declining donor support, the clamor for an “AIDS Free Generation” is coming up head-on against demand for greater integration of HIV services with other medical programs, and debate over where money is best spent to save lives.

Sachs rejects the debate entirely, arguing that, “take all of what we need for poor countries; we’re talking about 40 billion bucks or so, not just for AIDS but for all primary health systems. $40 billion? That’s 20 days of Pentagon spending. So let ‘em take a month off, c’mon!”

Englund claims the entire $16 billion HIV/AIDS budget has accomplished little more than, “create an AIDS industry, like the trade fair you are now in,” at the AIDS Conference. “The unprecedented increase in HIV spending has constrained other health – family planning, reproductive health, oral rehydration services,” and so on, at length.

“That is a simplistic answer,” Sidibe counters to Englund. “It’s not $1 here and $1 there. We have a $7 billion gap and it’s killing millions of people.”

But Over sees the situation from the point of view of a typical Minister of Finance in a poor or middle income country: “Resources are scarce for him. He’s looking at how many life-years can be saved with his money – child health or more for HIV? Which do you do? It’s true that $150 can save one child’s life from mother-to-child transmission of HIV. But 20 kids’ lives can be saved by investing that $150 in vaccines.”

The four men neatly captured the arguments heard among health economists. But the larger debate is a global sense of justice: How much death and suffering is acceptable in a world in which wealth is increasingly concentrated in the hands of a tiny minority? On the eve of the conference a McKinsey study was released that found $32 trillion is hidden in tax havens around the world, representing the wealth of just 50 banks and 150,000 individuals. That certainly fueled the Sachs position: There’s plenty of money in the world, it simply needs to be better distributed. But Over is quick to note that a Minister of Finance in a small African country is never going to get his hands on that magical $32 trillion, but he does quite immediately have to make tough choices, with the little money he has.

The recurrent theme of the XIXth International AIDS Conference is that the end of the pandemic that has plagued humanity since the late 1970s is finally in sight. Whether it is Secretary of State Hillary Clinton calling for an “AIDS Free Generation” or Senator John Kerry envisioning complete eradication of the HIV virus, the dominant mantra is that the end of AIDS is within reach – however, getting there requires quite a bit more cash.

But beneath the surface of this conference of some 25,000 people from at least 150 countries is a rumble of anxiety: Can this be done, and who will pay for it?

“I think it is best to view this goal as aspirational, but achievable,” Dr. Kevin De Cock, head of global health for the U.S. Centers for Disease Control and Prevention said. “But we need to balance this with a bit of realism. We must not make the mistake of over-promising.”

Money, Money, Money

Regardless of the political and scientific reservations I have expressed regarding the “end of AIDS” mantra, there are very immediate reasons to worry about financing. Since the 2008 financial crisis the overall economic picture for global health, generally, and HIV in particular is stagnation, and in many specific areas, cuts. Numerous donor nations, now overwhelmed with their own budgetary crises, have either ceased donating to the HIV pandemic effort, or reduced their commitments to merely symbolic millions of dollars. The UNAIDS Programme estimates the global budget for AIDS will have to increase by $7 billion over the next three years, reaching $23-26B per year, in order for the epidemic to show real declines in size and scope.

As Dr. Bernhard Schwartlander, the top scientist for UNAIDS put it in a speech here at the conference, “Tax payers want to know that money is used as efficiently as possible. But cost reductions alone cannot ensure that we will reach our ambitious prevention and treatment goals for the coming decade. We need to find additional resources. To do so, we need to think new. And to think new, we need to understand the way the world is changing around us.”

First, the Good News

On the treatment side, there is very good news. More than 150 different formulations of anti-HIV drugs now exist, and prices for many of them have plummeted. Francisco Viegas Neves da Silva of the Brazilian Ministry of Health told the conference that his country began imposing compulsory licensing on patented anti-HIV drugs in 1999, forcing manufacturers to allow generic production of their drugs. As a result, each year Brazil can afford to treat more patients, for less money. In 1999 one leading antiretroviral drug (ARV) cost the country $772 per patient per year: That drug today costs the government $294/patient/year. Thanks to shifting to cheaper generic ARV production Brazil has since 1999 saved $103,600,000.

Jean-Paul Moalti, Director of France’s Institute of Health, surveyed ARV prices paid by the Global Fund to Fight AIDS, TB and Malaria and dozens of other large purchasers, as well as by the governments of 128 countries. “Today,” he told the conference, “more than 95 percent of the market is generic. And generally we see prices decreasing.” He argues that first-line therapies for HIV treatment have hit the marginal cost points – they can’t get any cheaper. Most low income countries are now able to provide pills for less than 60 cents/day/person. Most governments can afford that. Prices are also falling for the second-line drugs, Moalti insisted, and are about halfway now to their marginal cost points.

For patients that acquire highly drug resistant forms of HIV or suffer side effects from their first and second line therapies the picture is gloomy, as few such compounds are generically manufactured. But these, too, will predictably plummet in price over the next five years.

Countries have also learned that volume = low cost, and bulk purchasing is further improving the price picture. So the pills, themselves, are no longer the cost-driver for control of the pandemic in most poor countries. The greatest expenses are healthcare workers, clinics, hospitalizations, mobilizing populations to undergo HIV tests and take precautions to protect themselves against infection. HIV is increasingly a health systems problem, as it has shifted from death-watch medicine to chronic care for people that survive years, hopefully decades.

Governments are trying to identify ways to deliver more services, for less money. Itamar Katz of USAID told the conference that his agency is helping governments set priorities based on cost-efficiency. For example, in South Sudan the government asked USAID which was the better vehicle for disseminating AIDS education – radio, or billboards? Katz’s team figured out that billboards would reach people at the cost of roughly $0.05/person, while radio cost $0.003/person. Multiply this simple example times thousands and real savings emerge.

No “End of AIDS,” but Maybe End of Dependency?

Countries are also trying to wean off donor dependency. In Kenya in 2009, 87 percent of the nation’s $687 million AIDS budget came from donors. The government created an innovative insurance financing scheme and this year handles AIDS with a $1 billion budget, 73 percent of which comes from donors, according to Minister of Finance Robinson Njeru Githae. South Africa is committed to being self-reliant within five years, but is struggling to drive down its ARV budget. Unlike Brazil, South Africa still pays about $600/person/year for medicines and has the largest HIV population in the world.

“Estimated global HIV funding leveled off due to a flat lining in international funding since 2009,” UNAIDS top scientist Dr. Bernhard Schwartlander told the conference. “However, global resources were up 11% in 2011 because of a steady increase of domestic resources in low- and middle-income countries, with Brazil, South Africa, China, the Russian Federation, and India leading the way. This means a remarkable turning point. Overall, a 15 percent growth in domestic resources more than made up for the stagnation in international funding. In fact, 81 countries increased domestic funding by more than 50% between 2006 and 2011. For the first time ever, domestic resources exceed international funding!

“The lives of more than 80% of the people, who receive AIDS treatment in Africa, depend every morning on whether or not a donor writes another check. That is unacceptable. Such dependency simply must end,” Schwartlander concluded to thunderous applause.

Tanzania experienced a dramatic fall-off in donor support following the 2008 financial crisis, the government’s Fatma Mrisho said at the conference, which was crushing because the country’s AIDS program was 95 percent donor-dependent in 2009. Under a strategic plan for 2013-2017 the government intends to reduce donor dependency by 40 percent, primarily through efficiencies in AIDS services.

But there are limits to what governments are willing to do – political ones. For example, Zimbabwe’s 1999 AIDS tax levy, which finances its program through a 3 percent take on incomes and profits, has been decimated by the hyperinflation that renders the country’s currency meaningless. Under the leadership of Robert Mugabe since 1980, Zimbabwe is a brutal place from which millions have fled. Corruption, inflation have rendered income from the AIDS Levy insignificant, the government’s Albert Manenji told the conference. The recent discovery of diamonds in the country opens the possibility that Zimbabwe could follow Botswana’s example, designating half of all mineral profits for public goods and services, including healthcare and AIDS. But Manenji dismissed that possibility, and it is widely reported that Mugabe and his top cronies are walking away with the diamond wealth.

Where there is will, PEPFAR is trying to help countries find a way, according to Deborah von Zinkernagel. In 2009 the average HIV+ individual received care from PEPFAR at a cost of $796/year. By the end of 2011 a combination of lower drug costs and country efficiencies brought the cost to PEPFAR down to $201/year.

Looming Costs, Not Accounted For in Projections

But the AIDS epidemic is transforming, thanks to better treatment and prevention programs – and that means new costs are regularly introduced. The longer patients take ARVs and stay alive with HIV infection, the greater their risks for a long list of difficult and expensive ailments. Some of the problems are side effects of the ARVs, and switching medicines can reduce risks. But most seem to be related to damage to the immune system caused by HIV, leading to inflammatory reactions throughout the body. Among the hundreds of presentations related to these emerging medical problems – found all over the world, including in poor countries – here is a brief list:

  • Inside cells all over the body the energy engines are the mitochondria, and their ability to generate the body’s ATP fuel is impaired, leading to muscular and aerobic weakness.
  • At the tips of cells’ gene-holders, the chromosomes are segments called telomeres. In all human beings those telomeres shorten as people age. For people infected with HIV the telomere shortening process appears to be more rapid, possibly indicating their cells are literally aging faster.
  • Most HIV+ individuals lose their ability over time to properly absorb Vitamin D, and the reductions in D lead to poor maintenance of their bones. As a result, they are significantly more likely to suffer osteoporosis and bone fractures.
  • Kidney stones and kidney failure are turning out to be hallmarks of HIV infection, increasing with the age of the patient.
  • A long list of cardiovascular problems is showing up with alarming frequency, including sudden onset heart attacks, hypertension, stroke, and lipidistrophy.
  • With time many HIV+ individuals evidence declining neurocognitive function, leading to dementia, forgetfulness, and disorientation.
  • Psychologically, the combined burdens of aging, stigma, living with HIV and social isolation prove to be more than many can bear: Depression and suicide are the result.

According to the recently published report of the OAR Working Group on HIV and Aging (J Acquir Immune Defic Syndr 60:S1, July 1, 2012) the net effect with time is increasing frailty, a wide range of inflammatory responses and the need for highly personalized, complex medical care. It is almost impossible to imagine how these issues can be managed in middle income countries like South Africa, much less poor ones like Malawi or Cambodia. For example, a large survey presented at the conference by researchers from the University of North Carolina compared age-matched HIV- and + individuals for neurocognitive function. More than half of the HIV+ individual displayed cognitive dysfunctions, versus just 17 percent of their matched HIV- cohort. Can anybody imagine the costs and complexities of handling increasing dementia and declining cognitive function in half the HIV patients of Zambia?

In the U.S. several large cohorts of HIV+ individuals have been studied since the early days of the epidemic, and a combined analysis of findings for 46,275 people, most of them men with a mean age of just 39 years, showed rising cancer rates. Interestingly, most of the cancers are types known to be caused by viruses, and correlate with viruses that have plagued the gay American community alongside HIV: hepatitis B and C, Epstein - Barr virus, and HPV. Knowing which viruses may be lurking in communities around the world may serve as a predictor of the types of cancers various countries or populations are likely to experience.

Sadly, little is known about baseline disease rates in most poor and middle income countries. Only recently, for example, have health authorities in Ghana realized that a third of the country’s rural population has hypertension, according to Dr. Peter Lamptey, head of Family Care International. So it is impossible to anticipate the scale of secondary problems likely to emerge over the next 5-10 years in HIV populations around the world in order to forecast additional costs.

No, Dependency Will Not End, But Money Will Have to Come From New Sources

UNAIDS reckons that continued improvements in countries’ abilities to finance their own healthcare, based on greater budget allocations to health, efficiencies, and economic growth of local economies, could bring significant resources to the HIV table, but not enough. The current shortfall of $7 billion will likely swell with time as patients evidence side effects, drug resistance and the plethora of secondary ailments described above.

The world is changing, wealth is moving around the planet, and the traditional model of raising HIV funds by screaming at the G8 nations no longer makes sense.

Broadly speaking there are two ways to generate additional resources: Through novel global mechanisms, or inside countries through innovative taxations.

Andrew Hill of Liverpool University described a country innovation concept at the conference: High taxation of tobacco and alcohol products. Because tobacco kills about 6 million people annually, and alcohol an estimated 2.5 million, both recreational or lifestyle compounds are reasonable targets for generation of health monies. Hill has found that the products are grossly under-taxed in poor and middle income countries. In the UK a pack of cigarettes is taxed at 80 percent (up to $9.00), versus a mere $0.47 tax in Kenya. Hill suggests a Global Health Charge levied at a rate of 1 cent per liter of alcohol and 10 cents per pack of cigarettes would generate sufficient revenue in most countries hard hit by HIV to cover much of their HIV budgets. For example, such a Charge levied in Kenya would generate $63 million in funds to provide HIV treatment. This sort of “sin tax,” as it is called in the U.S., if applied in Nigeria, Uganda, Botswana, Thailand, Vietnam, India, Brazil, Russia, Ukraine and China would, combined, generate $2.57 billion/year, Hill says.

If applied globally, the Global Health Charge on tobacco and alcohol would generate $11 billion/year, according to UNAIDS. A modest levy on airlines, mirroring France’s Unitaid tax on flights landing and taking off from the country’s airports, would generate $3 billion/year if applied in all OECD nations. A further $11 billion could be garnered from a levy on shipping and airplane fuel. And $35 billion could come from taxing large currency exchanges; $150 billion could be generated from a small tax on every massive financial transaction, UNAIDS says.

Of course, if any of these innovations were implemented great competition for the funds would ensue. HIV is hardly the sole cause searching for billions of dollars: Climate change adaptation, a long list of other health systems and disease issues, refugee and humanitarian response, water scarcity issues, agricultural development and food security, and dozens more. When the numbers are tallied it looks like “problem solved,” but none of the finance innovations can be enacted without significant political support, and decisions regarding disbursements will be equally politically charged.

Back to the World Bank

HIV has changed our world – and our World Bank. A former AIDS researcher, Jim Kim, is now President of the Bank, and at the urging of the Obama Administration the Bank now collaborates of health financing decisions with USAID, PEPFAR, UNAIDS, the Global Fund and other major agencies. But the Bank’s resources are pitiful compared to the scale of need. It is in a better position to offer ideas for smart financing and cost efficiencies, than actual largesse.

So it was interesting that the World Bank marked the XIXth International AIDS Conference with a debate over spending for HIV/ADS in an era of diminishing resources.

Jeffrey Sachs drew thunderous applause when he opened the debate: “The proposition is a sham,” he declared. “Because we are not in a resource constrained environment. The whole thing is a sham – rich people don’t want to pay even when they have more money than they can dispose of in 20 lifetimes. This is so much bunkum, this whole idea that we have a budget constraint.”

“Sachs is inspiring,” Mead Over responded. “If he was running for President I might vote for him. I agree we should have a stronger progressive tax. But a Minister of Finance of a poor country can’t get at Mitt Romney’s tax haven money.”

And so it goes…