January–March 1998
Volume 9, Number 1The economics of AIDS policy
In developing policy on treatment options for AIDS, governments must choose among a range of conflicting demands on scarce public resources. A major new study has examined how developing country governments and the international community can identify public priorities in confronting this global epidemic.
HIV/AIDS has taken a terrible human toll. An estimated 6 million people have died of AIDS worldwide, and 30 million more have contracted HIV (figure 1). Nearly half those infected are women, and one million are children. Every day 16,000 people become infected with HIV. The enormous cost of dealing with the epidemic has strained public resources in many developing countries, and governments everywhere are struggling to determine how to confront the problem without neglecting other, equally compelling problems. How much money, personnel, and attention should governments in developing countries devote to HIV/AIDS? And how should those resources be spent?
A global and growing epidemic
Some 90 percent of HIV infections occur in developing countries, where AIDS is projected to become the second leading infectious cause of death in prime-age adults by 2020, after tuberculosis. In many countries, Côte d'Ivoire and Zimbabwe among them, the AIDS epidemic has already robbed the population of more than 10 years of expected life.The epidemic is at different stages in different parts of the world. In the early stages the virus typically spreads quickly among people with the riskiest behavior, those who have unprotected sex with many partners and those who inject drugs and share unsterile needles. Later the virus spreads to their partners with lower-risk behavior and from mothers to their children.
According to the 1997 World Bank Policy Research Report Confronting AIDS: Public Priorities in a Global Epidemic, 250 million people—about 5 percent of the population of the developing world—live in countries with "generalized" epidemics. In these countries the rate of HIV infection is high among those with the riskiest behavior and at least 5 percent of women attending prenatal clinics—a group presumed to have lower-risk behavior—are infected with HIV. Countries in this group include most of the countries of eastern and southern Africa, a few West African countries, and Guyana and Haiti.
Another 1.6 billion people live in countries with "concentrated" epidemics. In these countries more than 5 percent of those with the riskiest behavior are infected with HIV, but the rate of infection among pregnant women remains low. Most of Indochina, Latin America, and West Africa falls into this category, as do Yunnan Province in China and about half of India.
Half the population of the developing world, or 2.3 billion people, live in areas with "nascent" epidemics, where rates of infection among those with the riskiest behavior remain low. This category includes Bangladesh, Indonesia, the Philippines, most of the countries of the former Soviet Union, and large parts of China and India.
Acting immediately is critical
Governments in countries in which HIV has not yet spread can save millions of lives by acting now, before they are faced with a crippling crisis. By investing in prevention when few people are infected, governments can contain the epidemic at relatively low cost. Even in countries in which the virus has already spread widely, effective prevention now can save the lives of many people who would otherwise become infected.Early action is critical because HIV spreads exponentially early in an epidemic. Medical researchers suspect that HIV is most infectious in the first few months of infection, suggesting that early in an epidemic a large proportion of people with HIV will be highly infectious. Because of the long lag between HIV infection and appearance of the symptoms of AIDS—about 10 years—if governments wait to act until there are many cases of AIDS, it will be too late to avert an epidemic. HIV will have spread widely.
As the number of people with HIV/AIDS mounts, access to medical care will become more difficult and more expensive for everyone, including people not infected with HIV, and total health spending will rise. For many developing countries these costs will devastate already fragile health care systems. Prevention now is therefore critical.
Why is government action needed?
Although the health impacts of HIV/AIDS are themselves ample cause for concern, there are additional reasons why policymakers and the development community should be concerned about the epidemic. First, widespread poverty and unequal distribution of income appear to accelerate the spread of HIV. Second, the rapid labor migration, urbanization, and cultural modernization that often accompany economic growth can facilitate the spread of HIV. Third, at the household level, AIDS deaths exacerbate the poverty that is conducive to the spread of the disease, thus creating a vicious circle.Active government involvement is crucial if AIDS is to be contained. Only governments have the means and mandate to finance the monitoring and control of the virus—the epidemiological surveillance, research on risky behavior that spreads HIV, and evaluation of the costs and effectiveness of different interventions. Private behaviors that spread infectious diseases like AIDS are said to create negative "externalities" because they impose costs not only on those who engage in them but also on others or on the society at large. Governments have a unique responsibility to intervene to reduce the negative externalities of high-risk behavior while preventing discrimination that would inhibit behavioral changes. Without these government efforts, those at high risk of contracting and spreading HIV are unlikely to reduce risky behaviors sufficiently to prevent the acceleration of the epidemic. The government also has a role to play in ensuring that the poorest members of society have access to services to prevent and treat HIV/AIDS.
What should governments do to prevent HIV?
Because no effective cure has been found, prevention must be the preeminent objective in AIDS policy in developing countries. Governments have two key responsibilities in preventing the spread of HIV/AIDS: reducing the negative externalities of high-risk behavior and producing public goods, such as information about the disease. Given the immense impact of HIV/AIDS on health and life expectancy and the possibility that AIDS will exacerbate problems of poverty and inequality, the need for governments to confront the epidemic is critical. But can governments prevent people from contracting HIV?The key is to focus prevention efforts on changing the behavior of people at highest risk for contracting the virus and unknowingly passing it to others. Programs that aim to prevent infection among people with the riskiest behavior, such as sex workers, others with many sexual partners, and intravenous drug users, are controversial because they require dealing directly with socially taboo topics. They also require working with segments of the population considered in some ways marginal in order to change their behavior. Because in most societies commercial sex and drug use are illegal and socially abhorred, some communities oppose prevention programs targeting these groups, and politicians may see little to gain in standing up to this opposition. Without such efforts, however, the epidemic cannot be stopped.
In countries with low rates of HIV infection, prevention efforts directed to people with the riskiest behavior may be enough to prevent a major epidemic. In countries where the epidemic is already widespread, focusing prevention efforts on high-risk groups is also essential and likely to be the most cost-effective response (box 1). But behavioral change in the broader population will also be necessary to rapidly reduce infection rates in countries with generalized epidemics.
Dissemination of information about HIV/AIDS is critical. In Africa, for example, well over 90 percent of the population knows that HIV is spread sexually. But only 40Ð70 percent of men who had recently had sex with a casual partner identified condom use as a means of protection against HIV. This kind of evidence suggests that governments need to do more to educate their populations about HIV/AIDS.
Do people who engage in high-risk behavior respond to information about how to prevent infection? A substantial body of research, most of it in developing countries, suggests that improved information about preventive measures does affect behavior. Knowledge about the levels of HIV infection in the population, how HIV is transmitted, and how to avoid contracting the virus can induce some people who engage in high-risk behavior to adopt safer sexual and injecting practices or to refrain from casual or commercial sex and drug injection altogether. In Thailand, for example, the announcement that 44 percent of sex workers in the city of Chiang Mai were infected with HIV is believed to have contributed to the growing use of condoms in commercial sex, even before large-scale government condom programs began.
Simply increasing awareness of HIV transmission is not enough, however. Researchers have identified a number of related factors that affect how people use knowledge to assess the costs and benefits of risky behavior and internalize it. These factors include the extent to which people understand how HIV infection might affect them personally, the extent to which they perceive their own behavior to be risky, and the extent to which they have the skills and power to negotiate safer behavior with partners and to resist social pressures. Interventions that address these issues can produce substantially more behavioral change than knowledge alone. They can take many forms, from public information campaigns using mass media to training and education programs conducted face to face.
Lowering the cost of condom use
Condoms are highly effective in preventing HIV transmission. But many people, even those who recognize the risks of HIV, do not use them, because of the price of condoms, the potential inconvenience and embarrassment of obtaining them, and, for some people, reduced pleasure. Policies that lower these costs—by lowering the price of condoms, improving their availability, and increasing their social acceptability—can reduce HIV transmission.Some countries heavily subsidize and market condoms and make them readily available at nontraditional outlets, such as truck stops, bars, and hotels. They have increased the social acceptability of condoms with advertising campaigns and grassroots activities, such as street theater, that show condom use as normal, healthy, even fun. Mass marketing of subsidized condoms in 60 developing countries has increased men's willingness to use them.
Lowering the cost of unsafe injecting behavior
Because HIV is easily transmitted through shared injecting equipment, it spreads rapidly among injecting drug users. In 1988, for example, HIV was virtually nonexistent among drug users in Myanmar. Just one year later 75 percent of injecting drug users were infected with the virus. The infection has spread almost as rapidly among this group in China, India, Thailand, and Ukraine.Some countries have tried to reduce unsafe injecting behavior by legalizing the purchase of needles and syringes; distributing bleach, which can be effectively used to clean needles; and establishing needle exchange programs, in which used syringes are exchanged for sterile ones. As a result of needle exchange programs, fewer than 5 percent of injecting drug users in Glasgow, Scotland, and Tacoma, Washington, in the United States, are infected with HIV, while in neighboring cities without these programs 40 percent or more are infected.
What should governments do to help people with AIDS?
Unlike AIDS prevention, treatment of people with AIDS is primarily a private good, since the benefits of treatment accrue largely to the person being treated. How much government contributes to financing AIDS treatment depends on the society's assessment of its responsibility to the sick and of the citizen's right to health care and the country's income. In the poorest countries health care spending by the government and private individuals amounts to less than $20 per person a year, compared with more than $2,000 in industrial countries. Whatever level of subsidy for health care is deemed appropriate and feasible, people with HIV-related illnesses should have the same access to care and pay the same share of their health care costs as patients with other terminal diseases whose treatment is equally expensive and uncertain. Fairness and compassion require governments to act decisively to improve access to treatment for AIDS patients and prevent discrimination against them.Governments in developing countries must consider the costs and benefits of alternative AIDS therapies relative to those of preventive, curative, and treatment programs for the range of public health threats. Three types of care can be provided to AIDS patients—palliative care, which is relief of symptoms such as headache, pain, and diarrhea; treatment of opportunistic infections, such as tuberculosis and pneumonia, which can be fatal to people with weak immune systems; and antiretroviral therapy, which attacks the virus directly.
Box 1
The multiplier effect of preventing HIV/AIDS among sex workers in NairobiA simple calculation illustrates how reducing HIV transmission among those with the highest rates of partner change can dramatically reduce infection rates in the overall population. A highly successful HIV prevention program in Nairobi, Kenya, provided free condoms and treatment of sexually transmitted diseases to 500 sex workers, 80 percent of whom were already infected with HIV. The women had an average of four partners a day. Following the intervention, condom use rose from 10 percent to 80 percent, averting an estimated 10,200 new HIV infections a year. One-third of the prevented cases were among clients of the sex workers and two-thirds were among the clients' other partners, including their wives. If instead the program had increased condom use to 80 percent among 500 men chosen at random from the low-income community in which the sex workers lived, a mere 88 new HIV infections would have been prevented each year.
Although not a cure, triple-drug antiretroviral therapy has improved the health of many AIDS patients in high-income countries and reduced mortality. But it is very expensive: the drugs and necessary medical services amount to about $20,000 per patient a year. In Thailand, a middle-income developing country, the costs are less—$9,000 to $13,000 per patient a year, depending on the combination of drugs used. Moreover, following the complex regimen for triple-drug therapy is extremely difficult: patients must take up to 20 pills a day according to a complicated schedule related to sleep and meal times. Failure to follow the schedule increases the chance that the virus will become resistant to treatment. Some patients are too sickened by the drugs to continue. And patients in the early stages of HIV infection are sometimes unwilling to take drugs that make them nauseous when they still feel healthy. In clinical trials in industrial countries as few as a third of patients complied with instructions. Because weaker support systems, both clinical and in the home, impair the patient's ability to stick to the regimen, problems with compliance are likely to be worse in low-income countries. Periodic shortfalls in public finance for triple-drug therapy can also threaten its success by interrupting treatment.
In the poorest countries treatment of the rapidly mounting number of people with HIV with triple-drug antiretroviral therapy would pose a serious challenge to health care systems because of its extraordinarily high cost and its technical complexity. Commitment to the costliest HIV/AIDS treatments is likely to reduce the effectiveness of overall health care programs and drain resources from other health problems and other sectors. For these reasons triple-drug therapy does not offer realistic hope in the near term for the millions of people infected in the poorest developing countries. As the World Bank's World Development Report 1997 (New York: Oxford University Press, 1997) notes, the government's role must match its capability.
There are lower-cost, effective treatments that offer substantial benefits to AIDS patients in the poorest countries, improving the quality of life and extending lives by up to four years. Treatment of the full range of HIV symptoms and opportunistic infections costs less than $500 per patient a year in African countries; in Thailand the costs are about $1,600. Thus for the cost of treating one patient with triple-drug antiretroviral therapy for a year, the lives of 12–20 patients could be extended using simpler technology to treat their opportunistic infections. Further, because some of the opportunistic infections, such as tuberculosis and pneumonia, are infectious, there is a strong rationale for governments to subsidize their treatment. Even if governments cannot afford subsidies, some drugs used for treatment are privately affordable. Sadly, in the poorest countries hardest hit by the epidemic, even these drugs are often unavailable, from public or private sources. Where treatment is provided also affects cost. An alternative to hospital-based care is community-initiated care provided at home. This greatly reduces costs—though it shifts them from national taxpayers to the local community—while improving the quality of the last years of life for people with AIDS.
What role should donors play?
National governments bear the responsibility for protecting their citizens from the spread of the HIV/AIDS epidemic and of mitigating its worst effects once it has spread. But they are not alone in the effort. Bilateral and multilateral donors have provided both leadership and major funding for national AIDS prevention programs in developing countries. Donor funding for AIDS programs is estimated to have been about $300 million in 1996. Most of this aid came from the United States ($117 million), the European Union ($55 million), and Japan ($40 million). The World Bank provided $45 million in new loan commitments in 1996, most at concessional rates. Local and international nongovernmental organizations have also stepped forward to help fight the epidemic, sometimes prodding governments into action.Donor support for national AIDS programs is important and often critical. But donors also are in a unique position to mobilize international support for research on low- cost treatments and development of an HIV vaccine that can be effective in developing countries. And donors should invest more in disseminating information on the costs and effectiveness of interventions to prevent the epidemic.
Drawn primarily from World Bank, Confronting AIDS: Public Priorities in a Global Epidemic (New York: Oxford University Press, 1997). Further information may be obtained by writing to the authors, Martha Ainsworth and Mead Over, at the Bank's main address. Or visit the Website http://www.worldbank.org/aids-econ.
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