'The business of public health': new research on financing of HIV programmes

Rebecca Hodes
Published: 27 July 2010

At the International AIDS Conference in Vienna, a session on the financing of HIV programmes yielded important results about the long-term costs and health impacts of continued Global Fund financing of ART. John Stover, from the Futures Group, presented the findings of a model on the future financing required for Global Fund-supported cohorts of ART patients.

Stover explained: “The Global Fund provides grant funding to 140 countries, costing a total of about $11 billion so far. A large proportion of this money is spent on ART. By the end of 2009, the Global Fund was supporting 2.5 million people on ART. This is going to increase to 3.5 million by the end of 2011.”

The key objective of Stover’s study was to answer the question: “How much funding is required to maintain support for these 2.5 million ART patients for as long as they need treatment? And what is the impact of providing this support?”

Stover and colleagues estimated that the total cost per patient on first-line ART was $147 per annum, and $1,521 per total annual cost per patient on second-line ART. He also noted that the Global Fund currently pays about $150 per ART patient per year. “The Global Fund is therefore not the sole provider. Drug and service delivery was also contributed to by ministries of health, PEPFAR, and other financing bodies”, Stover explained.

The cost of treatment maintenance

Stover concluded that to provide ongoing support to people already on ART would cost between US$1.6 and 1.9 billion per year. He explained that this was a “baseline commitment”, and that additional sources of funding were required to increase ART coverage.

Stover explained: "The price of second-line drugs is a major component. Any progress in reducing second-line prices will make a significant difference, as will improving first-line regimens so people can stay on first-line treatment for a lot longer."

When questioned about the validity of costing models that indicate that the failure to invest in ART will be more costly to countries in the long run, Stover emphasised that: “Models unequivocally show that ART is a good investment. The benefits of ART can be clearly ascertained if you look at the number of productive years that are gained from treatment.”

Stover went on to explain: “Since the year 2000, the price of ART has plummeted. If it costs $600 to treat someone for a year, which is more than the estimated cost of the World Health Organization recommendations, that’s less than the GDP per capita of most countries and certainly less than the average productivity of an adult in sub-Saharan Africa.”

However, he added that, “The trouble is who is paying, and who is getting the benefit. With PEPFAR and the Global Fund, they are financing health initiatives, although the benefit of these accrues somewhere else. But that’s okay, because PEPFAR and the Global Fund aren’t in the business of making money. They are in the business of public health."

Costing Nigeria’s unmet demand for treatment

A second study, presented by Dr Michael Kayode Ogungbemi, examined the financial, human resources and infrastructural gaps in Nigeria’s national ART programme in order to understand the cost of programme’s unmet need. Ogungbemi explained that Nigeria’s current ART coverage is “only about 40%”, and that donor financing accounts for over 80% of its financing. Ogungbemi concluded: “There is a massive gap in funding. To achieve universal access in Nigeria, we will need $3.4 billion.”

When challenged by an audience member about why Nigeria is so reliant on external funding sources for its ART programme, Ogungbemi explained: “The country has enough resources to give all the people who require ART access to treatment. But there are so many priorities in the country. The priorities of government are sometimes not informed by evidence or by rational decisions. This calls for advocacy from all of us. We continue to advocate that the government does what it’s supposed to do and fund HIV and AIDS in the country. Whether you are in Nigeria and London, you have a role to play.”

Lessons from Brazil

Two presentations about the national ART programme in Brazil shared positive findings about how government negotiations can significantly lower the cost of national treatment programmes.  A researcher from Brazil’s Department of Health explained: ‘We have a strong system of price negotiation and we work a lot with local producers. It is important to consider which medicines we are able to produce locally without patent, and which medicines can be produced locally but are patented. We have to manage these patent systems in Brazil. We have used the flexibilities available in TRIPS to issue compulsory licences on drugs, including efavirenz.”

The researcher explained that all ARVs in Brazil are procured centrally by the Ministry of Health, and that rigorous negotiations are conducted between pharmaceutical corporations and the Ministry in order to reduce the cost of patented medicines. She also noted that Brazil had established partnerships with Argentina, Russia, Thailand and other states in order to develop new ARV formulations.

"Double standard of HIV care"

Constance Meiners, whose research analysed the evolution and determinants of ARV drug prices in Brazil, noted that new drugs are far more expensive than older ones. Explaining how patent protection pushes up the prices of drugs, Meiners stated: “Patent protection leads to an increase of 92% in the price of drugs, as opposed to non-patented drugs.”

Meiners argued that, as countries move towards replacing d4T with efavirenz and tenofovir, in line with WHO recommendations, the cost implications are considerable, especially for middle-income countries that may not benefit from patent arrangements designed to deliver lower prices for the poorest countries. Brazil cancelled the patent on tenofovir (Viread) in 2008 and issued a compulsory licence on efavirenz (Sustiva, Stocrin) so that a generic equivalent could be imported from India. This led to a reduction in the prices of these two drugs.

Meiners concluded that: "The decrease in the cost of ARVs has resulted mainly from non-branded drug competition. Patent protection, due to its effect on prices, is an important obstacle to accessing the new generation of ARVs. The increasing cost of these ARVs imposes a double standard of HIV care in the world, in which people living in rich countries can access quality drugs that are unavailable in the poor world due of their expense."

TRIPS flexibilities provide an important means for decreasing cost, but their full application is limited due to political pressure on countries not to challenge the global order on international trade laws. Meiners stated: “My recommendation to countries that wish to follow the example of Brazil is to consider local production on an integrated basis.” She maintained that Brazil’s health infrastructure and its capacity for local production were the key ingredients in its achievement of universal ART coverage.