AIDS2031LONG TERM COSTS AND FINANCING FOR HIV/AIDS

ICAAP12 AUGUST 2009BALI INDONESIA

Farzana Muhib, Results for Development Institute

Overview

Main findings of the Cost and Financing Working Group

Global estimates Regional estimates for Asia Cambodia case study

aids2031 Costs and Financing –main objectives

Globally and through two country case studies:

1. Estimate the long-term costs of AIDS, using a range of distinct scenarios

2. Make recommendations in setting priorities for resource allocation, based on evidence of intervention and program cost-effectiveness

3. Construct and evaluate financing scenarios that are adequate, equitable, predictable, and sustainable

4. Encourage global and national dialogue – promote positive policies that will result in financing a successful long-run AIDS response at the lowest possible cost.

Main findings – our current top 5

1. Global AIDS funding needs will continue to grow rapidly – Asia will account for one-third, treatment over a fifth, of future spending

2. Cost trajectory changed with action today. Policy choices lead to different price tags for 2031 – $19 to $38 billion annually(globally)

3. With our current intervention tool kit, epidemic attenuated but not extinguished – nearly one million infections in 2031. Technological and/or behavioral game changers needed.

4. Huge scope for spending better – technical efficiency gains potentially large but hard to realize, allocative efficiencies increasingly clear but politically difficult. We must fix both, starting with allocations..

5. Sustained long-term financing for AIDS in serious jeopardy, especially for HP/LIC, but even for some HP/MICs – domestic capacity limited and donor prospects uncertain. Low prevalence, middle income countries may rapidly move to self-financing

Four scenariosPolicy choices today have very different price tags in the futureHuge variance in the price tagsTreatment = 25%+

Resource needs estimates

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

1975

1977

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1981

1983

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1991

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Num

ber

of N

ew A

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New Infections Among Adults 15-49

Current Trends

Rapid Scale-up

Hard Choices

Structural Change

1 million + infections under the best scenarios- unless we have a vaccine, a cure, or a social/sexual revolution

Impact on incidence

Availability of Donor Financing

A gap still exists in both the pessimistic and optimistic scenariosThis gap would need to be filled, but by who?

Projections of GDP growth= 2%

Potential funding from OECD countries 2006 2015 2031

Pessimistic --No change in ODA as share of GDP (0.25%) US$ billions

Total ODA 92 113 155

Donor assistance for HIV/AIDS 6 8 11

Global Resource Needs for AIDS (rapid scale up) 10 27 38

GAP in Funding 4 19 27

Optimistic -- Donors increase ODA to 0.7% of GDP

Total ODA 92 315 433

Donor assistance for HIV/AIDS 6 22 30

Global Resource Needs for AIDS (rapid scale up) 10 27 38

Gap in Funding 4 5 8

Resource needs and impact in Asia

Current funding in Asia

Potential sources of funding for Asia

Potential ODA from BRIC countries in 2015 and 2030

2015 2030Pessimistic --No change in ODA as share of GDP (0.25%) US$ billionsTotal ODA* 22.4 28.9Donor assistance for HIV/AIDS 1.56 2.02

Optimistic -- Donors increase ODA to 0.7% of GDP    Total ODA 62.8 80.9Donor assistance for HIV/AIDS 4.39 5.66

*World Bank, Global Economic Prospects Group

•BRIC countries start to donate, they will reduce the gap. •Specific regional preferences may influence the distribution of ODA from these countries•Philanthropists may play an increasing role in funding AIDS programs. 28 of 40 youngest billionaires reside in Asia

Sustained long-term financing is in serious jeopardy but the picture in Asia is not so bleak

Low prevalence, middle income countries could self-finance, without donors

Potential for Domestic Financing of AIDS in Asia

Our case studies

South Africa: 5.7 million HIV+ (18% prevalence), 350K deaths , $1-2 billion annual spending

Cambodia: ~ 1% prevalence, high treatment coverage, $44 million annual spending (2006)

Generalized Concentrated

MiddleSouth AfricaBotswana

UkraineBrazil

LowZambiaMalawi

CambodiaSenegal

Epidemic Type

Income

Currently Available and Needed Resources for Cambodia

Millions US$

Cambodia case study objectives

How much will it cost to address the epidemic in the future? Model 4 scenarios- modifying them to fit the epidemic pattern in

Cambodia. Key questions to consider: What are hard choices? What is structural

change? How will the epidemic change?

How to mobilize domestic/external, public/private resources for a sustained response? Donor mapping exercise to determine current levels of funding Fiscal space analysis – How much can we reasonably ask govts to

contribute in the future?

Stimulating dialogue and search for improved national policies

What we can do today in Asia?

Policy choices impact the ultimate price tag $4-14B Asia New/better prevention approaches are needed Consider a focus on the hard choices of cost effective

interventions Focus on Most at Risk Populations Evaluate impact of prevention interventions

Start to develop sustainable funding mechanisms Expand portfolio of funders Domestic funding of HIV/AIDS programs

Thank you.

For more information please visit our website:

www.resultsfordevelopment.org

Or

www.aids2031.org