AIDS: more money, less impact

The World Health Organisation (WHO) and UNAids hope to put 10 million Aids patients on drug treatment by 2010, up from approximately 1.7 million today. But reaching this target will require vastly more cash than these organisations have predicted. The cost of caring for Aids patients is set to rocket and will ultimately prove too expensive for aid donors. Meanwhile, such vast sums of hard foreign currency pouring into poor countries would wreak all kinds of economic damage and undermine any small improvements in health.

Despite this, donors are casting around for new ways of raising money for Aids drugs. One new mechanism was proposed by France at the St Petersburg G8 meeting in July, recommending a "solidarity tax" on airline tickets to buy drugs for Aids, tuberculosis and malaria patients. Subsequently, the United Kingdom, Brazil, France, Chile and Norway agreed in September to set up an International Drug Purchase Facility (IDPF), to be known as UNITAID, to provide US$300 million (Bt10.75 billion) a year.

UNITAID will pay the WHO 13 per cent for office support and a 6-per-cent commission on procurement to Unicef and the Clinton Foundation. It will "boost the marketing of generic drugs by accelerating their WHO pre-qualification", a process that has already in Thailand led to an increase in drug resistance because of poor copycat drugs propagated by charities.

Despite the G8 rhetoric about solidarity and helping Aids patients, UNITAID is a solution to a problem that doesn't exist. Its founders believe that drug prices are the main reasons the poor have little access to drugs, so one of its main objectives is to stimulate the creation and manufacture of new or cheaper medicines.

But the WHO itself has explained how this is not the real problem. In July, the director of WHO's Aids programme told Reuters: "The elephant in the room is not the current price of drugs. The real obstacle is the fragility of the health systems." UNAids said in its 2006 report: "Barriers to providing widespread HIV prevention and treatment, such as the lack of infrastructure, poor transportation, or shortages of trained workers, are substantial and can only be overcome through our greatest collective efforts."

Even activist groups concur. The International Treatment Preparedness Coalition reported in November 2005 that "scale-up of treatment will not happen unless countries fulfil their responsibilities - and be the primary engine for increasing access to care".

Clearly, the ability of governments to provide functioning health infrastructure is more important than the cost and supply of drugs. Without clinics, doctors and nurses, drugs can be given away for free to no effect. It is these things that are the most expensive - a factor UNITAID does not begin to address.

For 2005, the WHO recorded global expenditure of $8.3 billion on Aids. UNAids says the world will need $14.9 billion in 2006, $18.1 billion in 2007 and $22.1 billion in 2008. These estimates do not include the costs of actually running the many new hospitals required, or the rising costs of treating patients who have become drug resistant. These two items alone could increase projections by an eye-watering 40 per cent.

In June 2004, the International Monetary Fund (IMF) expressed serious concerns about the influx of all this aid money, at a time when expenditure on Aids was only $8 billion. It warned that large aid flows could lead to high inflation and interest rates. Both of these hinder growth and act like a tax on the poor.

Nearly half of the poorest countries are already receiving aid worth more than 50 per cent of government expenditure and more than one-fifth get more than 75 per cent. As these levels continue to increase, it is projected that two-thirds will rise above the 50-per-cent level and one-third above 75 per cent. These vast aid flows give governments even less incentive to improve governance and plenty more opportunities for corruption. Ethiopia has more donor funds for Aids than its entire national health budget.

In November, Cornell University published a report on the cost of Aids patient care in the US, saying it would be $12.1 billion annually for just 40,000 patients. This is a harbinger of things to come in the rest of the world.

Pressure by the UN and the WHO to treat 10 million Aids patients by 2010, without considering the financial, economic and healthcare consequences, will damage fragile governments and hurt the poor. Healthcare and treatment are best helped by allowing poor countries the economic freedoms to develop and to be able to afford sustainable health infrastructure.

The creation of UNITAID is an expensive irrelevance: HIV/Aids cannot be reduced by yet another UN bureaucracy focussing on treatment because drugs just keep people alive for a few years: only prevention can reduce the spread of the disease.

Jeremiah Norris is director of the Centre for Science in Public Policy, Hudson Institute, a policy think-tank in Washington DC. He specialises in health and scientific matters.