HIV/AIDS MEDICINES AND RELATED SUPPLIES: Contemporary Context and Procurement TECHNICAL GUIDE

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3 HIV/AIDS MEDICINES AND RELATED SUPPLIES: Contemporary Context and Procurement TECHNICAL GUIDE February 2004

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5 WB HIV/AID TECHNICAL GUIDE TABLE OF CONTENTS 1 Table of Contents Foreword E xec utive Su m m a ry Pref ace Ack n owl ed gm en t s Abbrevi a ti on s 1. Ch a ll en ges in scaling up tre a tm en t The econ omic impact of HIV/AIDS and A RV tre a tm en t E s ti m a ting re s o u rce requ i rem en t s Lon g - term econ omic ef fect of HIV/AIDS and other con s i dera ti on s 2. In tell ectual Property Ri gh t s : A Concise Gu i de In trodu cti on to this concise guide How patents affect medicines proc u rem en t Least devel oped co u n tri e s Devel oping co u n tri e s A note on p a ra ll el import s Regi s tra ti on and data exclu s ivi ty More details fo ll ow 3. Ma n a ging the su pp ly cycle for bet ter outcom e s Who does wh a t? What tasks need to be don e? Who is alre ady carrying out these tasks? Mon i toring proc u rem ent re su l t s 4. Produ ct sel ecti on, qu a n ti f i c a ti on, and qu a l i ty assu ra n ce Produ ct sel ecti on Produ ct qu a n ti f i c a ti on Q u a l i ty assu ra n ce and su pp l i er sel ecti on Tow a rd a con s o l i d a ted prequ a l i f i c a ti on sys tem 5. Proc u rem en t Assessing capac i ty Com m od i ties that su pport the HIV/AIDS progra m Planning proc u rem en t Regi s tering produ ct s Ch oosing proc u rem ent met h od s

6 2 WB HIV/AID TECHNICAL GUIDE TABLE OF CONTENTS 6. Pri c i n g What determines drug pri ce s? Ad d i ti onal pri ce determinants in retail market s How can public purch a s ers bargain for low pri ce s? Annex A. E s ti m a ting re s o u rce requ i rem ents for AIDS tre a tm en t Annex B. In tell ectual Property Ri gh t s : How they affect proc u rem ent and what steps can be taken Annex C. HIV test kits and other diagn o s ti c s G l o s s a ry Boxe s 1. 1 The lon g - term econ omic con s equ en ces of AIDS in So uth Af ri c a 1. 2 A RV thera py and drug re s i s t a n ce 3. 1 Who can help in sel ecti on and qu a n ti f i c a ti on? 3. 2 Who can help with reg u l a tory issues of produ ct regi s tra ti on, i n tell ectual property, and import? 3. 3 Who can help with proc u rem en t? 3.4 Who can help with stora ge and distri buti on? 4. 1 Us eful referen ces for qu a n ti f i c a ti on 5. 1 Social marketi n g : a n o t h er way to distri bute 5. 2 Us eful referen ces on proc u rem en t 6. 1 Examples of poo l ed proc u rem ent initi a tive s 6. 2 So u rces of i n form a ti on on produ cti on costs and pri ce s 6. 3 Evi den ce of equ i ty pricing for anti retrovi ra l s B. 1 Pa ra ll el importi n g B. 2 Pa ra ll el imports in So uth Af ri c a u n der the rule of i n tern a ti onal ex h a u s ti on Fi g u re s 2. 1 In tell ectual property ri ghts ch eck l i s t : least devel oped co u n try 2. 2 In tell ectual property ri ghts ch eck l i s t : devel oping co u n try 2. 3 Can a co u n try use World Bank funds to proc u re gen eric A RV s? 3. 1 The medicines su pp ly cycl e 3. 2 Tasks and stages of the su pp ly cycl e 5. 1 Com m od i ties that su pport the HIV/AIDS progra m 5. 2 Proc u rem ent flowch a rt 6. 1 P h a rm aceutical su pp ly ch a i n 6. 2 D rug proc u rem ent and opti ons for lowering pri ce s

7 WB HIV/AID TECHNICAL GUIDE TABLE OF CONTENTS 3 Ta bl e s 4. 1 WHO recom m en d a ti ons for initi a ting anti retrovi ral thera py in adults and ado l e s cents with doc u m en ted HIV infecti on 4. 2 WHO first-line A RV regi m ens in adults and ado l e s cents and ch a racteri s tics wh i ch can influ en ce ch oi ce 4.3 Q u a n ti f i c a ti on met h od s 4. 4 Ca l c u l a ting proc u rem ent qu a n ti ti e s 4.5 Mu l ti s o u rce and single and limited - s o u rce produ ct s A. 1 People living with HIV/AIDS in Bu rkina Fa s o, A. 2 Proj ected cost of A RV tre a tm ent (dru gs on ly) for all people with AIDS under high cost ($1,000), l ow cost ($333) and lowest cost ($140) pri ce scen a ri o s, A. 3 Proj ected total cost of A RV tre a tm en t, per pers on per ye a r, A. 4 Proj ected total cost of A RV tre a tm ent for all people with AIDS in Bu rkina Faso under high co s t ($1,730) and lowest cost ($620) pri ce scen a ri o s, A. 5 Proj ected nu m ber of people living with HIV/AIDS in Kenya and So uth Af ri c a, A.6 Proj ected cost of A RV tre a tm ent (dru gs on ly) for all people with AIDS in Kenya under high co s t ( $ 1, ), l ow cost ($333) and lowest cost ($140) pri ce scen a ri o s, A. 7 Proj ected cost of A RV tre a tm ent (dru gs on ly) for all people with AIDS in So uth Af rica under h i gh cost ($1,000), l ow cost ($333) and lowest cost ($140) pri ce scen a ri o s, A. 8 Proj ected total costs of an A RV progra m, per pers on per ye a r, in Kenya and So uth Af ri c a

8 4 WB HIV/AIDS TECHNICAL GUIDE FORWARD Foreword The HIV/AIDS pandemic has been ch a racteri zed as the gre a test natu ral ch a ll en ge ever to con f ront hu m a n i ty and one of the great mora l causes of our ti m e. The pandemic is on a rapid gl obal march and is n ow impacting some of the worl d s most pop u- lous co u n tri e s. Forty mill i on people worl dwi de a re curren t ly living with the disease and another 45 mill i on may become infected by Th e disease is having a parti c u l a rly deva s t a ti n g i m p act on Su b - Sa h a ran Af rica wh ere 2.3 mill i on people died of H I V-AIDS in 2003, an esti m a ted 26.6 mill i on people are HIV po s i tive and there a re more than el even mill i on AIDS orph a n s. In ad d i ti on, an esti m a ted five to six mill i on indivi duals in devel oping co u n tries are in need of a n ti retrovi ral thera py tod ay. The world community recognizes that HIV/AIDS is a global priority and halting and reversing its spread is one of the Millennium Development Goals. The World Bank and other sources of finance, such as the Global Fund for AIDS, Tuberculosis and Malaria and the U.S. Leadership Against HIV/AIDS, Tuberculosis and Malaria Act of 2003 have committed substantial financing to fund HIV/Aids prevention, care and treatment and mitigation programs. Todate the World Bank has committed U.S. $1.6 billion to the war against HIV-AIDS through a combination of grants, loans, and credits, mostly through its Multi-Country HIV/AIDS Programs (MAPs) in Africa and in the Caribbean. Of special importance is providing treatment for the millions of people around the world who are HIV positive and whose lives would be prolonged by the use of anti-retroviral medicines. However, scaling up treatment is a major challenge. The Bank has recognized that waging war against HIV-AIDS means adopting new approaches and procedures. The Ba n k s Im p l em en t a ti on Accel era ti on Te a m was cre a ted in Ja nu a ry 2003 to do just that. It was t a s ked, a m ong other things, with cre a ting soluti ons wh erever ex i s ting procedu res and practi ce s a ppe a red inadequ a te for fast and flex i ble interventi on s. As a re su l t, s i gnificant ch a n ges have alre ady been made in a nu m ber of a re a s, su ch as the i m p l em en t a ti on of s a feg u a rd po l i c i e s, gra n t - m a k- ing aut h ori ty, k n owl ed ge shari n g, and financial m a n a gem en t, d i s bu rs em ent and reporti n g. This Technical Gu i de repre s ents an import a n t f u rt h er step in this work. While implem en ti n g a gencies are familiar with how to proc u re good s and servi ces for trad i ti onal devel opm ent project s, dealing with HIV-AIDS requ i res new are a s of ex perti s e, e s pec i a lly with rega rd to purch a s i n g a n ti - retrovi ral medicines and other medical su p- plies and devi ce s. This technical guide on proc u rem ent of HIV/AIDS medicines and su pp l i e s, wh i ch was ex ten s ively discussed wi t h, a n d revi ewed by stakeh o l ders around the worl d, i s meant as a guide for implem en ting agencies and don ors in these new are a s. The Technical Gu i de ad a pts the Ba n k s guidelines on the proc u rem en t of health goods to the HIV/AIDS con tex t. It f u rt h er sets out principles and guidance to en su re that su ch proc u rem ents wi ll fit within an overa ll well - f u n cti oning su pp ly managem en t s ys tem for HIV/AIDS medicines and rel a ted su pp l i e s. Within the con tem pora ry con tex t, t h i s requ i res that atten ti on also be paid to matters su ch as produ ct sel ecti on, qu a l i ty assu ra n ce, a n d co u n tri e s i n tell ectual property ri ghts sys tem s within the gl obal trading sys tem. The Bank and its partn ers in the Un i ted Na ti on s In tera gency Pharm aceuti c a l Coord i n a ti on Group are curren t ly working to m a ke this Gu i de an intera gency doc u m ent in order to furt h er the harm on i z a ti on of the proc u rem ent of HIV/AIDS produ ct s. For the World Bank it takes ef fect immed i a tely, and an i n ten s ive training program wi ll be ro ll ed out for task teams and rel evant staff of borrowers and grant rec i p i en t s.

9 WB HIV/AIDS TECHNICAL GUIDE FORWARD 5 HIV/AIDS is not just a cri tical health probl em it is a defining devel opm ent probl em of o u r ti m e. This Technical Gu i de materi a lly update s, a m p l i f i e s, and en h a n ces the Ba n k s capabi l i ty, and that of its mem ber co u n tri e s, to ad d re s s one of the we a kest links in the current figh t a gainst the pandem i c : a ppropri a te and ef fective tre a tm en t. We trust that it wi ll make a m a terial con tri buti on. Je a n - Louis Sa rbi b S enior Vi ce Pre s i d en t, Human Devel opm ent Netwo rk James W. Adams Vi ce Pre s i d en t, Opera tional Policy & Cou n try Servi ce s

10 6 WB HIV/AIDS TECHNICAL GUIDE EXECUTIVE SUMMARY Executive summary An ti retrovi ral thera py has rad i c a lly ch a n ged the o ut l ook for people who can pay for it or use it in well - re s o u rced health care sys tem s. L iving lon ger, h e a l t h i er live s, t h ey can become produ ctive and a ble to care for them s elve s. An ti retrovi ral thera py is not a cure, but it diminishes the vi ral load and t hus redu ces damage to the immune sys tem. It also redu ces the stati s tical risk of passing on the vi rus thro u gh wh a tever ro ute bl ood, bre a s t m i l k, and sexual or other bod i ly flu i d s. De s p i te some dra m a tic redu cti ons in the last three ye a rs, the costs assoc i a ted with anti retrovi rals and o t h er medicines for HIV- rel a ted probl ems are sti ll very high and may remain so. Sk i ll ed nego ti a ti on and lobbying on beh a l f of and by people wi t h HIV has alre ady had some ef fect in redu c i n g pri ce s. But even wh en full adva n t a ge is taken of the lowest po s s i ble pri ces on the gl obal market, the annual total cost of a n ti retrovi ral thera py is s ti ll more than the nati onal bu d get for health care in some co u n tri e s. Mu ch high er costs wi ll be incurred in co u n tri e s that cannot get low - cost su pplies for patent or o t h er market re a s on s. Costs wi ll also be high er if d rug re s i s t a n ce devel ops and more ex pen s ive a l tern a tive medicines have to be used. So for m a ny co u n tri e s, a s s i s t a n ce from the World Ba n k, the Global Fund for A I D S, TB and Ma l a ri a, a n d o t h er key don ors wi ll be essen tial to make the p u blic health promises of a n ti retrovi ral thera py a re a l i ty, at least in the fore s ee a ble futu re. P l a n n ers and dec i s i on makers must have a cl e a r u n derstanding of the import a n ce of tre a tm ent in t ackling HIV and en su re that specific servi ce s and fac i l i ties requ i red for tre a tm ent be inclu ded in the scaling up ef fort : HIV co u n s el i n g, te s ti n g, and fo ll ow-up servi ce s for ad h eren ce to tre a tm ent and psych o s oc i a l su pport. Ca p ac i ty for appropri a te managem ent of H I V and opportu n i s tic infecti on s. Labora tory servi ces for mon i toring tre a tm en t. Con ti nuous su pp ly of A RV s, o t h er med i c i n e s for HIV- rel a ted ill n e s s, su pplies for labora tory tests and preven tive prec a uti on s. Rel i a ble reg u l a tory mechanisms to en su re the qu a l i ty of tre a tm en t, while pro tecting the indivi du a l s ri ght to tre a tm en t. Proc u rem ent is on ly one link in this large network of f actors affecting the HIV ep i dem i c. Yet it is cl e a rly vi t a l. Su ccessful tre a tm ent depends on con ti nu o u s, rel i a ble su pplies of the nece s s a ry m edicines and rel a ted com m od i ti e s. Wi t h o ut su s t a i n ed access to anti retrovi ra l s, the ch a ll en ge of tre a tm ent cannot be met and the rava ges of the ep i demic wi ll con ti nu e. Estimating resource requirements E s ti m a ting the financial and re s o u rce requ i rem ents of an anti retrovi ral tre a tm ent program is a key step in assessing its fe a s i bi l i ty and su s t a i n- a bi l i ty. Re s o u rces for direct tre a tm ent are not the on ly ob s t acle to introducing and scaling up an a n ti retrovi ral progra m. The lack of physical and human health infra s tru ctu re and the inadequ ac y of s ys tems to distri bute essen tial medicines affect the ava i l a bi l i ty of d ru gs and financial fe a s i bi l i ty. In all cases, the finances for su ch a progra m would have to inclu de ex pen d i tu re on bo t h c a p ac i ty building (if it is not adequ a te) and the p u rchase of d ru gs and rel a ted medical su pp l i e s and servi ce s but in va rying proporti on s, depending on skill set s, i n come level s, ep i dem i c proporti on s, and local needs in each situ a ti on. Dealing with patents Ma ny HIV/AIDS medicines and labora tory produ cts are rel a tively new, s ti ll pro tected by p a tents gra n ted to the ori gi n a tors, u su a lly wi t h i n co u n tries wh ere the ori gi n a tor has, or ex pects to h ave, a significant market. But the patent situ a- ti on va ries wi dely ac ross co u n tri e s, a f fected by

11 WB HIV/AIDS TECHNICAL GUIDE EXECUTIVE SUMMARY 7 su ch intern a ti onal agreem ents as the Agreem en t on Trade - Rel a ted As pects of In tell ectual Property Ri ghts (T R I P S ). That makes it important for staff re s pon s i ble for proj ect implem en t a ti on to assimi l a te the inform a ti on in this guide. E a rly cl a ri f i c a- ti on of the intell ectual property ri ghts situ a ti on (and of regi s tra ti on requ i rem ents and import reg u l a ti ons) wi ll prevent fru s tra ti on, w a s ted ti m e and mon ey, and po s s i ble liti ga ti on. As a con s equ en ce of the Doha Decl a ra ti on on the TRIPS Agreem ent and Pu blic He a l t h, adopted by Mem bers of the World Trade Orga n i z a ti on in Novem ber 2001, least devel oped co u n tri e s a re aut h ori zed to for go the en forcem ent of p a tents on ph a rm aceutical produ cts at least unti l Ja nu a ry 1, Wh en a least devel oped co u n try govern m ent and its proc u rem ent aut h ori ty take adva n t a ge of this maximum flex i bi l i ty, HIV/AIDS medicines may be imported (or loc a l- ly produ ced) wi t h o ut con cern abo ut wh et h er p a tents on these medicines have been gra n ted within the co u n try. For devel oping co u n tries that are not least developed, the most important tool for dealing wi t h po ten tial ob s t acles pre s en ted by patent holders is com p u l s ory licen s i n g or govern m ent use a ut h ori z a ti on. A patent is a govern m ent gra n t that permits its holder to exclu de third parti e s f rom the market for a produ ct, su ch as an H I V / A I D S - rel a ted med i c i n e. A com p u l s ory l i cen s e is an aut h ori z a ti on by the govern m ent to i t s el f or to a third party to use the patent wi t h o ut the perm i s s i on of the patent holder. Wh en the govern m ent is aut h orizing its own use, this is also c a ll ed a govern m ent use a ut h ori z a ti on or l i cen s e, wh i ch is a form of com p u l s ory licen s e. Im portant HIV/AIDS medicines or su pplies are covered by one or more patents in many co u n- tri e s. If the proc u rem ent aut h ori ty wishes to proc u re a bi oequ iva l ent medicine (a gen eric vers i on ) f rom a party other than the patent holder or its a ut h ori zed distri butor, i n cluding by importi n g the med i c i n e, it may need to aut h ori ze proc u rem ent under a com p u l s ory licen s e. The TRIPS Agreem en t, in Arti cle 31, a ut h ori zes every govern m ent to grant com p u l s ory licen s e s. Managing the supply cycle for better outcomes The medicines su pp ly cycle com prises all el e- m ents requ i red for the establ i s h m ent and con tinu i ty of su pplies for health del ivery, i n clu d i n g m edicines and rel a ted com m od i ti e s. It inclu de s four key stage s, with a cen tral requ i rem ent for good managem ent su pport, an understanding of the policy and legal fra m eworks for the su pp ly c ycl e, and an apprec i a ti on that medicines are s pecial com m od i ties that have con s traints concerning qu a l i ty assu ra n ce, s tora ge, and use. Two key el em ents of the cycle are sel ecti on and proc u rem en t. But to get good re su l t s, it is cl e a r that these must not happen in isolati on. All el e- m ents of the cycle must functi on well, and the broader con text must be unders tood so that a h o l i s tic and re a l i s tic approach can be taken to ach i eve the best po s s i ble re sults in each set ti n g. In many co u n tri e s, a nati onal drug policy wi ll set o ut approaches to ach i eving these pri ori ti e s within the nati onal con tex t. Su ch policy is also l i kely to inclu de set ting requ i rem ents for regi s trati on of d ru gs and limiting who may pre s c ri be, d i s pen s e, or sell them. Na ti onal HIV/AIDS tre a t- m ent policies must also be con su l ted, s i n ce these s et out guidelines for approving HIV tre a tm en t regi m ens and who is en ti t l ed to pre s c ri be them. Some key policy or legal issues that affect proc u rem ent inclu de : In tell ectual property (patent) legi s l a ti on of m edicines the nati onal patent situ a ti on wi ll d i rect ly affect what produ cts can be proc u red f rom wh i ch su pp l i ers and what scope there wi ll be for nego ti a ti on on pri ce s.

12 8 WB HIV/AIDS TECHNICAL GUIDE EXECUTIVE SUMMARY Health ri ghts and access to HIV- rel a ted tre a t- m ent wh en limited su pp l i e s, p a rti c u l a rly of A RV s, a re ava i l a bl e, el i gi bi l i ty cri teria wi ll be a pp l i ed to sel ecti on of wh i ch mem bers of t h e pop u l a ti on qualify for tre a tm en t. This wi ll a f fect produ ct sel ecti on and qu a n ti f i c a ti on and m ay ch a n ge as scaling up proceed s. Security issues antiretroviral medicines for HIV treatment are high in value and thus vulnerable to theft and diversion to illegal markets or to individuals who are not priority recipients of HIV treatment programs. So, planning the supply cycle will have to incorporate effective security measures and a legal framework that allows for sanctions against theft or diversion. Deciding who does what An assessment should be made at an early stage to find out who is alre ady carrying out the tasks rel a ted to the su pp ly cycle and to test wh et h er the Bank needs to fund the set ting up of n ew sys tem s and pers on n el, the use of ex i s ting on e s, or a com bi n a ti on of bo t h. A prel i m i n a ry mapp i n g exercise could be used to iden tify different systems and pers on n el rel evant to the HIV proc u rem en t s. The strengths and weaknesses of e ach on e should be ex a m i n ed, e s ti m a ting their wi ll i n gn e s s and capac i ty. Bear in mind that a peri od of ra p i d growth wi ll be a fe a tu re of most HIV tre a tm en t programs du ring scaling up. This may strain the c a p ac i ties and funding of a ll those who have a p a rt in tre a tm ent del ivery. It may thus have u n fore s een ef fects on their abi l i ty to provi de coopera ti on as programs devel op. Wh en it is clear who can do what for Ba n k - f u n d- ed HIV proc u rem ent in a specific co u n try, a furt h er assessment of the propo s ed proc u rem en t s ys tems should be carri ed out. An assessment of the initial situ a ti on should also lead to the set ti n g up of m on i toring and eva lu a ti on cri teria and tools for the on going perform a n ce mon i toring of proc u rem en t. Perform a n ce indicators and mon i- toring procedu re s, re s pon s i bi l i ti e s, and finance wi ll be ex pected. How dru gs should be sel ected for H I V- rel a ted tre a tm en t Pu blic health cri teria for sel ecting anti retrovi ra l d ru gs and dru gs for opportu n i s tic infecti on s focus on dru gs of the gre a test import a n ce to satisfy the health needs of the majori ty of the pop u- l a ti on of H I V- po s i tive peop l e : The sel ecti on of d ru gs should be carri ed out by a mu l ti d i s c i p l i n a ry gro u p, i n cluding repre s en t a- tives of the nati onal AIDS com m i t tee or co u n c i l and the nati onal drug formu l a ry com m i t tee, toget h er with an HIV specialist doctor, an HIV s pecialist nu rs e, a ph a rm acist with knowl ed ge of ava i l a ble HIV- rel a ted med i c i n e s, and a proc u rem ent spec i a l i s t. Ad d i ti onal mem bers may be co - opted on an ad hoc basis. Dru gs should be iden ti f i ed in any pri n ted m a terial by their gen eric name, or intern a ti on a l n on propri et a ry name. But abbrevi a ted ch em i c a l names and brand names wi ll also be used wh en a ppropri a te. Drug sel ecti on should be based on predeterm i n ed cri teri a, as recom m en ded by the W H O or any ex i s ting guidelines of the nati onal dru g or AIDS progra m s. Deciding on quantities It is important to re a l i ze that in situ a ti ons wh ere the HIV/AIDS ep i demic or re s ponses to it are ex p a n d i n g, c a reful ju d gm ent wi ll be nece s s a ry to a rrive at the correct qu a n ti ties of e ach com m od i- ty needed for proc u rem ent and deciding how mu ch to buy. Un dere s ti m a tes wi ll deprive peop l e of n ece s s a ry tre a tm ents or te s t s. Overe s ti m a te s m ay waste re s o u rces if l i m i ted shel f l i fe produ ct s ex p i re unu s ed, e s pec i a lly as tre a tm ent pro toco l s and diagn o s tic preferen ces ch a n ge.

13 WB HIV/AIDS TECHNICAL GUIDE EXECUTIVE SUMMARY 9 Th ree met h ods can be used for qu a n ti f i c a ti on : The usage (con su m pti on) met h od that relies on past use (con su m pti on) records to esti m a te f utu re need. The ad ju s ted usage (ad ju s ted con su m pti on ) m et h od that uses data from other fac i l i ti e s, regi on s, or co u n tri e s, ad ju s ted or ex tra po l a ted to the specific situ a ti on on the basis of pop u l a ti on covera ge or servi ce level. The pati ent morbi d i ty - s t a n d a rd tre a tm en t m et h od that esti m a tes the need for spec i f i c d ru gs, b a s ed on the ex pected nu m ber of a t tend a n ce s, the preva l en ce or inciden ce of d i s e a s e s, and standard tre a tm ent guidelines for the health probl ems that are to be tre a ted. Assessing capacity In many co u n tries the implem en ting agen c i e s m i ght lack the capac i ty to forec a s t, proc u re, s tore, and distri bute anti retrovi ral medicines and o t h er rel a ted medical su pplies of the HIV/AIDS c a re pack a ge. It is therefore essen tial to ex a m i n e the proc u rem ent capac i ty of the cen tral med i c a l s tores for this category of s pec i a l i zed dru gs and su pplies before deciding on the proj ect s proc u rem ent stra tegy and plan. If the cen tral medical store is to t a lly def i c i ent and poorly managed, a third altern a tive must be sough t ( su ch as em p l oying a spec i a l i zed proc u rem en t a gency or UN agen c y ). This agency can be requ i red, as part of its con tractual obl i ga ti on s, to i n clu de a tra i n i n g, c a p ac i ty bu i l d i n g, and tech n o l o- gy tra n s fer com pon ent inten ded to stren g t h en the c a p ac i ty of the cen tral medical store. Commodities that support the HIV/AIDS program The HIV/AIDS com m od i ties pack a ge is more com p l ex than other produ cts and su pplies mana ged in the public sector: A functi oning lab infra s tru ctu re is essen tial to su pport servi ce del ivery (equ i pm en t, su pp l i e s, and human re s o u rce s ). The su pp ly chain must be agile and re s pon s ive in ch a n ging situ a ti on s, del ivering produ ct s before they ex p i re or are diverted. Servi ce del ivery and provi der, cl i en t, a n d com mu n i ty edu c a ti on are in the early stage s of devel opm en t, u n l i ke more establ i s h ed health progra m s. A set of com preh en s ive, i n terdepen dent servi ce s n eeds to be provi ded. Decen tralizing interven ti ons to the com mu n i ty adds to com p l ex i ty of p l a n n i n g, coord i n a ti on, d i s tri buti on, and managem en t because the technical skills for managing these produ ct s m ay be lacking or insu f f i c i en t. The HIV/AIDS care pack a ge com prises three main produ ct categori e s : mu l ti s o u rce or gen eri c produ ct s, l i m i ted - s o u rce produ ct s, and singl e - s o u rce produ ct s. E ach category corre s ponds to a d i s ti n ct proc u rem ent stra tegy: Mu l ti s o u rce produ cts are ph a rm aceuti c a lly equ iva l ent produ cts that may or may not be t h era peuti c a lly equ iva l en t, ava i l a ble from different manu f actu rers. Th ey are well establ i s h ed, n orm a lly of f p a ten t, and not re s tri cted by conti nuing intell ectual property agreem ents or other exclu s ive market arra n gem en t s. Th ey are gen era lly ava i l a ble from a wi de ra n ge of produ cers, h ave publ i s h ed ph a rm acopoeial qu a l i ty stand a rd s, and ava i l a ble referen ce standards for qu a l- i ty - con trol te s ti n g. Limited - s o u rce produ cts are ph a rm aceuti c a lly equ iva l ent produ cts ava i l a ble from a limited nu m ber of m a nu f actu rers. Newer, t h ey are produ cts usu a lly pro tected by patents or market - exclu s ivi ty arra n gem ents in some co u n tri e s. P h a rm acopoeial qu a l i ty standards and publ i cly ava i l a ble referen ce standards for qu a l i ty con tro l te s ting may not yet be ava i l a bl e.

14 10 WB HIV/AIDS TECHNICAL GUIDE EXECUTIVE SUMMARY Si n gl e - s o u rce produ cts are gen era lly under p a tent with no licensing agreem ents that all ow o t h er firms to manu f actu re the dru gs. Si n gl e - s o u rce ava i l a bi l i ty may be due to paten t s, m a r- keting exclu s ivi ty, technical ch a ll en ges of produ cti on, or a lack of econ omic incen tives for produ cti on by other manu f actu rers. P h a rm acopoeial qu a l i ty standards and publ i cly ava i l a ble referen ce standards for qu a l i ty - con tro l te s ting might not be publ i cly ava i l a bl e. Choosing procurement methods The market situ a ti on of e ach produ ct, the natu re of the medicines and medical su pp l i e s, and the c ri tical dates for del ivery a ll are major factors determining the ch oi ce of proc u rem ent met h od. Ch oi ces are re s tri cted by the ch a racteri s tics of m edicines and su pplies of the HIV/AIDS care p ack a ge. As alre ady noted, the majori ty of a n tiretrovi rals and some other HIV- rel a ted dru gs are ei t h er singl e - s o u rce or limited - s o u rce produ ct s. Ot h er dru gs and com m od i ties for opportu n i s ti c i n fecti ons or for basic or pall i a tive care may be mu l ti s o u rce but ef fectively re s tri cted to limited s o u rces in many set ti n gs. So, i n tern a ti onal (or n a ti onal) com peti tive bidding wi t h o ut prequ a l i f i- c a ti on typ i c a lly cannot be the preferred met h od of proc u rem en t. In s te ad, l i m i ted intern a ti onal bi d- d i n g, d i rect con tracti n g, or shopping may be the most appropri a te. The key is to understand wh a t s i tu a ti ons are su i t a ble for each of t h em. Pricing The pri ce of m ed i c a ti ons can be a sign i f i c a n t b a rri er to HIV/AIDS tre a tm en t, e s pec i a lly for a n ti retrovi ral thera py, a ch ronic tre a tm ent that requ i res the daily intake of a com bi n a ti on of ph a rm aceutical com po u n d s. The covera ge of health insu ra n ce in devel oping co u n tries is of ten l i m i ted. And wh en dru gs are purch a s ed out - of - pocket, the pri ce of a n ti retrovi rals can make a vital differen ce for poor peop l e s abi l i ty to afford tre a tm en t. Even the lowest ava i l a ble pri ces are u n a f ford a ble for most pati ents in the devel op i n g worl d, wh ere abo ut 3 bi ll i on people live on less than $2 a day. Ma ny HIV- i n fected pati ents rely on the su b s i d i zed or free provi s i on of a n ti retroviral tre a tm ent by the public sector. For re s o u rce - con s tra i n ed govern m ents in poor co u n tri e s, t h e p u rchase pri ce for the ph a rm aceutical compounds direct ly affects the nu m ber of p a ti en t s that can be tre a ted. And lower pri ces leave more room for inve s tm ents in com p l em en t a ry health i n f ra s tru ctu re needed to make anti retrovi ra l tre a tm ent ef fective. Assessing the economic impact of antiretroviral therapy A pri m a ry ch a ll en ge facing po l i c ym a kers is estim a ting the ben efits of a n ti retrovi ral thera py. In the short term simple models of re s o u rce esti m a- ti on can be used to determine the immed i a te bu d get a ry implicati ons of a n ti retrovi ral thera py. G iven the re s o u rces requ i red for ad m i n i s teri n g a n ti retrovi ral thera py, it is essen tial to en su re ef fectiveness and safety. Tre a tm ents must be proven to work not on ly in i de a l clinical tri a l s, with cl o s ely mon i tored p a ti ents in a hospital set ti n g, but also in a con tex t l i kely if the program is scaled up. A re a l i s tic stu dy should con s i der com p l i a n ce and ad h eren ce to tre a tm ent under altern a tive stra tegi e s, su ch as DOT (direct ly ob s erved thera py) stra tegi e s, to account for the po ten tial misuse of d ru gs. E con omic con s traints the fact that other health con s i dera ti ons need to be ad d re s s ed c a ll for a c ri tical appraisal of the pros and cons of a ll techn i c a lly fe a s i ble interven ti on s, and put a prem iu m on ra ti onal re s o u rce all oc a ti on so that health n eeds can be ad d re s s ed holisti c a lly.

15 WB HIV/AIDS TECHNICAL GUIDE PREFACE 11 Preface This Gu i de sets out principles and advi ce for the proc u rem ent of HIV/AIDS medicines and rel a ted su pplies for programs scaling up anti retrovi ra l t h era py (ART) and assoc i a ted health servi ce s, su ch as basic and pall i a tive care, disease preven ti on, tre a tm ent of opportu n i s tic infecti on s, and laboratory te s t s.a RT inclu des the tre a tm ent of i n fected adults and ch i l d ren and the preven ti on of m o t h erto - child tra n s m i s s i on. A wi de ra n ge of o t h er comm od i ti e s p a rti c u l a rly con doms and su pport for basic living and care a re also essen tial to su pport the tre a tm ent and preven ti on of H I V. The pri m a ry audien ce for this guide is Worl d Bank staff and those re s pon s i ble for proc u ri n g HIV/AIDS medicines and rel a ted su pplies in Ba n k - f u n ded programs and proj ect s. That co u l d i n clu de ei t h er proc u rem ent agency staff or technical agency staff. Po l i c ym a kers and Bank partn ers wi ll also ben efit from the inform a ti on and advi ce in the guide. The ad ded value of this guide Al t h o u gh there alre ady are guidance doc u m en t s covering the proc u rem ent of health good s, t h i s g u i de spec i a l i zes in proc u rem ent for HIV- rel a ted programs bec a u s e : It focuses on re s o u rce - poor set ti n gs with little ex peri en ce of tre a tm ent programs that inclu de A RT. It discusses newer and more ex pen s ive dru gs and tests requ i red for A RT, wh i ch because of cost or scale, h ave not yet become part of e s s ential medicines policy in many co u n tri e s. It draws atten ti on to some of the unpred i ct a bl e f actors assoc i a ted with the scaling up of A RT su ch as rapid growth in dem a n d, the appe a r- a n ce of n ew medicines and te s t s, and su d den ch a n ges in market s. It provi des practical advi ce on intell ectual property ri gh t s, a com p l ex but important su bj ect, and it lays out in simple terms the array of opti ons ava i l a ble to nati onal govern m en t s. It provi des referen ces to va lu a ble materi a l s and of fers links to re ad i ly ava i l a ble instru c- ti ons and doc u m en t a ti on. Key re s o u rces in the devel op m ent of this guide The aut h ors of this guide gra tef u lly ack n owl ed ge the assistance and coopera ti on of a nu m ber of or ga n i z a ti ons ex peri en ced in re s ponding to the HIV ep i demic and in managing and proc u ri n g m edicines and other health good s. Ma ny of t h ei r re s o u rces are ava i l a ble on their web s i te s, and re aders of the guide are recom m en ded to those site s for furt h er inform a ti on. We parti c u l a rly ack n owled ge : World Health Orga n i z a ti on dep a rtm en t s : Essen tial Medicines (W H O / E D M ) w w w. wh o. i n t / m ed i c i n e s / def a u l t. s h tml HIV/AIDS (W H O / H I V) w w w. wh o. i n t / h iv / en/ Regi onal Office for Af rica (AFRO ) h t tp : / / w w w. a f ro. wh o.int/ Bl ood Sa fety and Clinical Tech n o l ogy The In tern a ti onal Di s pen s a ry As s oc i a ti on ( I DA) w w w. i d a. n l / en gel s / i d a. h tm l Orga n i z a ti on of E a s tern Ca ri bbean State s (OECS) Pharm aceutical Proc u rem ent Servi ce h t tp : / / w w w. oec s. or g / u n i t s _ pp s. h tm Ma n a gem ent Scien ces for He a l t h w w w. m s h. or g / proj ect s / rpm p lu s / h tm Médicins Sans Fron ti è res w w w. acce s s m ed - m s f. or g UNICEF w w w. u n i cef. or g UNFPA w w w. u n f p a. or g John Sn ow In corpora ted w w w. j s i. com

16 12 WB HIV/AIDS TECHNICAL GUIDE ACKNOWLEDGMENTS & ABBREVIATIONS Acknowledgments This Technical Gu i de was prep a red by a team led by Yolanda Tayl er and com prising Frederi ck Abbo t t ( Profe s s or of L aw, F l orida State Un ivers i ty ), Ca rm en Perez Casas (Pharm aceutical Policy Con su l t a n t ), Ca rs ten Fink (World Ba n k ), Ca ro lyn Green (Pharm aceutical Con su l t a n t ), Achal Prabhala (Worl d Ba n k ), and Juan Rovi ra (World Ba n k ), with ad d i ti onal con tri buti ons by Ru do l f Van Puym broeck and Joan Mac Neil (World Ba n k ). Bru ce Ro s s - L a rs on assisted the team as the principal ed i tor. The work was c a rri ed out under the gen eral directi on of Arm a n do Araujo and Debrework Zewd i e. The fo ll owing indivi duals provi ded hel pful com m ents and su gge s ti on s : Cl ive Bell, Ha n s Bi n s w a n ger, Jonathan Brown, Mam Ch a n d, Al i s on Mi ch el i, Ok Pa n n en bor g, Sa n geeta Ra ja, Na t a ra jan Ra m a n, Mi riam Sch n ei d m a n, Susan Sto ut (World Ba n k ), Guy - Mi ch el Gers hy - D a m et, Vi n cent Ha biya m bere, Lem bit Ra go, An d re van Zyl (World Health Orga n i z a ti on ), Ad rian Ot ten, Jaya s h ree Watal (World Trade Orga n i z a ti on ), Wi l bert Ba n n en berg (Pharm aceutical Po l i c y Con su l t a n t ), Henk den Be s ten, Jo s eph Spiteri Gon z i, Pascal Verh oeven (In tern a ti onal Di s pen s a ry As s oc i a ti on)and Francis Bu rn ett (Eastern Ca ri bbean Drug Servi ce s ). Abbreviations A RV E U I DA M A P An ti retrovi ra l Eu ropean Un i on In tern a ti onal Di s pen s a ry As s oc i a ti on Mu l ti - co u n try HIV/AIDS Progra m T R I P S U NA I D S U N I C E F W H O Trade - Rel a ted As pects of In tell ectual Property Ri gh t s Joint Un i ted Na ti ons Programme on HIV/AIDS Un i ted Na ti ons Ch i l d ren s Fu n d World Health Orga n i z a ti on P LW H A People living with HIV/AIDS WTO World Trade Orga n i z a ti on P M TC T Preven ti on of Mo t h er- to - Child Tra n s m i s s i on

17 CHAPTER 1. CHALLENGES IN SCALING UP TREATMENT 13 CHAPTER 1. CHALLENGES IN SCALING UP TREATMENT 1. 1 The HIV ep i demic is an unpreceden ted ch a l- l en ge to gl obal public health. The preva l en ce and i n c i den ce of HIV are sti ll rising ra p i dly in many p l ace s. And although a few co u n tries have ach i eved a measu re of su ccess in con tro lling inciden ce, the nu m ber of people needing tre a tm en t con ti nues to ri s e. 1 Even so, a n ti retrovi ral thera py ( A RT) has rad i c a lly ch a n ged the out l ook for those who can pay for it or use well - re s o u rced health care sys tem s. L iving lon ger, h e a l t h i er live s, t h ey can become produ ctive and able to care for t h em s elve s A RT is not a cure, but it diminishes the vi ra l l oad and thus redu ces damage to the immune system. It also redu ces the stati s tical risk of p a s s i n g on the vi rus thro u gh wh a tever ro ute s exual or o t h er bod i ly flu i d s, bl ood, and breast milk. Tre a tm ent to prevent mother- to - child HIV tra n s- m i s s i on du ring bi rth or thro u gh bre a s tfeeding can redu ce ped i a tric infecti on ra tes by as mu ch as 70% wh en com bi n ed with care for the mother and ch a n ges in feeding practi ce s. So tre a tm ent is also a preven tive measu re, reducing the ch a n ces of tra n s m i s s i on by infected pers ons and en a bl i n g people with HIV to resist opportu n i s tic infecti on s, con s i dera bly reducing ill n e s s e s. 1.3 Most people with HIV are in poorer co u n- tries or in marginal groups and do not have access to A RT. Some 40 mill i on people live wi t h HIV in devel oping co u n tri e s, a bo ut 6 mill i on in n eed of tre a tm en t. But by 2003 on ly 400,000 people actu a lly had access to tre a tm en t, repres en ting a tre a tm ent covera ge of 7 %. Un til recen t- ly, it was fe a red that poor infra s tru ctu re and lack of re s o u rces would prevent A RT from being su c- cessful in these situ a ti on s. Not so. Pilot stu d i e s h ave poi n ted to good ad h eren ce levels and su s- t a i n ed tre a tm en t. The cost of A RVs has also d ropped and wi ll likely drop furt h er for use in these situ a ti on s The Un i ted Na ti ons Gen eral As s em bly S pecial Se s s i on on HIV/AIDS in 2001 em ph a- s i zed the com p l em en t a ri ty of HIV care and preven ti on, u r ging govern m ents to provi de the h i ghest attainable standards of c a re, i n clu d i n g A RT. Ma ny govern m en t s, and the world of bu s i- n e s s, a re now looking for ways to re s pon d. Th e World Bank and other insti tuti ons have made su pport for A RT an important el em ent of t h ei r su pport for improving public health and containing the HIV ep i dem i c But scaling up of tre a tm ent with A RVs and o t h er HIV- rel a ted medicines pre s ents seri o u s practical ch a ll en ge s. Co u n tries and com mu n i ti e s n a tu ra lly have many other com peting pri ori ti e s. S c a rce re s o u rces and limited capac i ty means that m a ny co u n tries face probl ems in re aching ex i s t- ing goals for health servi ces and social su pport. L ack of i n f ra s tru ctu re is not a re a s on to del ay A RT, but scaling up must inclu de measu res to i m prove the gen eral con text of health care and su pport. And plans for scaling up A RT have to be devel oped within the local con text to be accepta ble and ef fective. Those in aut h ori ty and peop l e f rom com mu n i ties can toget h er provi de powerf u l su pport for tre a tm ent programs and be instrum ental in their su cce s s P l a n n ers and dec i s i on m a kers must have a clear understanding of the import a n ce of tre a t- m ent in tackling HIV and en su re that spec i f i c s ervi ces and fac i l i ties requ i red for tre a tm ent be i n clu ded in the scaling up ef fort : HIV co u n s el i n g, te s ti n g, and fo ll ow-up servi ce s for ad h eren ce to tre a tm ent and psych o s oc i a l su pport. Ca p ac i ty for appropri a te managem ent of H I V and opportu n i s tic infecti on s. Labora tory servi ces for mon i toring tre a tm en t. 1 For more detail, see

18 14 WB HIV/AIDS TECHNICAL GUIDE Con ti nuous su pp ly of A RV s, o t h er med i c i n e s for HIV- rel a ted ill n e s s, su pplies for labora tory tests and preven tive prec a uti on s. Rel i a ble reg u l a tory mechanisms to en su re the qu a l i ty of tre a tm en t, while pro tecting the indivi du a l s ri ght to tre a tm en t. 1.7 Access to ART by a large cross-section of the population will be partly constrained by the rate at which health services develop. But there is likely to be pressure for treatment, with more people seeking HIV-testing to be eligible for it. Official estimates of HIV-prevalence are thought to be only the tip of the iceberg in many countries real levels are estimated to be up to 10 times the official figures in some countries. Other related services must also be scaled up: counseling, HIV-testing, laboratory monitoring, information and education for patients, health care support, local community support, and general awareness campaigns De s p i te some dra m a tic redu cti ons in the last t h ree ye a rs, the costs assoc i a ted with A RVs and o t h er medicines for HIV- rel a ted probl ems are s ti ll very high and may remain so in the futu re. Sk i ll ed nego ti a ti on and lobbying on beh a l f of and by people with HIV has alre ady had som e ef fect in reducing pri ce s. But even wh en full adva n t a ge is taken of the lowest po s s i ble pri ce s on the gl obal market, the annual cost of A RT is m ore than the nati onal bu d get for health care in s ome co u n tri e s. Mu ch high er costs wi ll be i n c u rred in co u n tries that cannot get low - co s t su pplies for patent or other market re a s on s. Costs wi ll also be high er if d rug re s i s t a n ce develops and more ex pen s ive altern a tive med i c i n e s h ave to be used. So far in many co u n tri e s, a s s i s- t a n ce from the the World Ba n k, t h e G l obal Fu n d to fight A I D S, Tu berculosis and Ma l a ria and o t h er key don ors is essen tial to make the publ i c health promises of A RT a re a l i ty, at least in the fore s ee a ble futu re But the su s t a i n a bi l i ty of an A RT program is on ly part ly a qu e s ti on of ex ternal funding. Th e con tri buti ons of d i f ferent sectors of s oc i ety wi ll be vi t a l, providing active accept a n ce and use of A RT and invo lvem ent in servi ce provi s i on and s h a ring of i n form a ti on, u n ders t a n d i n g, and less on s. In ra p i dly ch a n ging situ a ti on s, m e a su res for su s t a i n a bi l i ty are impo s s i ble to qu a n ti f y, but the o utcomes of su ccessful tre a tm ent programs mu s t at least be : Reducing HIV- rel a ted morbi d i ty and mort a l i- ty to redu ce the bu rden of disease on the com mu n i ty. Im proving the qu a l i ty of l i fe for people wi t h HIV and their families to redu ce the bu rden of c a re and increase the abi l i ty to be produ ctive. Reducing levels of the vi rus in the com mu n i- ty to redu ce the inciden ce of n ew or rei n fected cases. Re s toring family and social stru ctu res fractu red by high ra tes of death and ill n e s s Proc u rem ent is on ly one link in this large n et work of f actors affecting the HIV ep i dem i c. Yet, it is cl e a rly vi t a l. Su ccessful tre a tm en t depends on con ti nu o u s, rel i a ble su pplies of t h e n ece s s a ry medicines and rel a ted com m od i ti e s. Wi t h o ut su s t a i n ed access to anti retrovi ra l s,t h e ch a ll en ge of tre a tm ent cannot be met and the rava ges of the ep i demic wi ll con ti nu e. The econ omic impact of HIV/AIDS and A RV tre a tm en t A pri m a ry ch a ll en ge facing po l i c ym a kers is e s ti m a ting the ben efits of a n ti retrovi ral (ARV) t h era py. In the short term simple models of re s o u rce esti m a ti on can be used to determine the i m m ed i a te bu d get a ry implicati ons of A RV therapy. G iven the re s o u rces requ i red for ad m i n i s tering A RV thera py, it is essen tial to en su re ef fectiveness and safety. One way to do this is to start

19 CHAPTER 1. CHALLENGES IN SCALING UP TREATMENT 15 by revi ewing the evi den ce on the ef f i c acy and s a fety of A RV thera py in set ti n gs com p a ra ble to those of the co u n try wh ere A RV tre a tm ent is to be scaled up. E f fects of m a l nutri ti on and other i llnesses should also be assessed. If no clear eviden ce is ava i l a bl e, an appropri a te ex peri m en t a l s tu dy should be con s i dered, i nvo lving clinical trials with a con trol gro u p Tre a tm ents must be proven to work not on ly in i de a l clinical tri a l s, with cl o s ely mon i- tored pati ents in a hospital set ti n g, but also in a con text likely if the program is scaled up. A re a l- i s tic stu dy should con s i der com p l i a n ce (reg u l a rity in taking tre a tm ent) and ad h eren ce (lon g - term con ti nu i ty) to tre a tm ent under altern a tive s tra tegi e s, su ch as DOT (direct ly ob s erved therapy) to account for the po ten tial misuse of d ru gs Because ex peri m ental data are ex pen s ive and difficult to obt a i n, a simu l a ti on model could be devel oped in the short term to esti m a te the econ om i c, dem ogra ph i c, and health impacts of a l tern a tive HIV/AIDS stra tegi e s. Su ch a model wo u l d con s i s ten t ly proj ect the evo luti on of the ep i dem i c and its ef fects using the best inform a ti on ava i l a bl e. It could also become a learning tool for assessing the med iu m - term and lon g - term ef fects of i n terven ti ons and stra tegi e s. The obj ective would not be to pretend that acc u ra te forecasts are po s s i bl e, but to get a sense of the magn i tu de of the ef fects of i n terven ti ons for planning and policy de s i gn,i n rel a ti on to a basel i n e. Su ch a model could also hel p in co s t - ef fectiveness and co s t - ben efit analyses of H I V / A I D S - rel a ted interven ti on s E con omic con s traints the fact that other health con s i dera ti ons need to be ad d re s s ed c a ll for a cri tical appraisal of the pros and cons of a ll tech n i c a lly fe a s i ble interven ti on s, and put a prem ium on ra ti onal re s o u rce all oc a ti on so that health needs can be ad d re s s ed holisti c a lly To satisfy the po l i tical demand and soc i a l ex pect a ti ons for A RV thera py, pilot proj ect s could pave the way for a futu re scaling up. Su ch pilots might have a strong re s e a rch and eva lu a- ti on com pon ent to increase knowl ed ge on the fe a s i bi l i ty and perform a n ce of A RV tre a tm en t opti ons in limited - re s o u rce set ti n gs, su ch as ru ra l a re a s. The pilots should provi de evi den ce on su ch issues as com p l i a n ce and ad h eren ce to tre a t- m ents and the ef fectiveness of c a re that preven t s a divers i on of m ed i c a ti on to uninten ded peop l e or bl ack market s Wh a tever the scale of A RV thera py con s i d- ered, the purchase of qu a l i ty dru gs at the lowe s t fe a s i ble pri ces is a key issu e. G en erics now co s t bet ween fifteen and thirty percent of the bra n ded ( ori gi n a tor s) dru gs. So the same drug bu d get would buy bet ween three and six times as many gen erics as ori ginal produ ct s. Estimating resource requirements 1.17 Estimating the financial and resource requirements of an ARV treatment program is a key step in assessing its feasibility and sustainability. Resources for direct treatment are not the only obstacle to introducing and scaling up an ARV program. The lack of physical and human health infrastructure and the inadequacy of systems to distribute essential medicines affect the availability of drugs and financial feasibility. In all cases, the finances for such a program would have to include expenditure on both capacity building (if it is not adequate) and the purchase of drugs and related medical supplies and services but in varying proportions, depending on skill sets, income levels, epidemic proportions, and local needs Some key qu e s ti on s : Who should receive care? Wh i ch are the tre a tm ents to be provi ded? What is the adequ a te time hori zon of the estim a ti on?

20 16 WB HIV/AIDS TECHNICAL GUIDE What is the degree of acc u racy requ i red? Planning and esti m a ting the cost of com preh en s ive anti retrovi ral tre a tm ent progra m,s h o u l d s t a rt with the ga t h ering of b a s eline data con cerning dem ogra phic tren d s, ep i dem i o l ogical and m edical inform a ti on and any ex i s ting cost data. In ad d i ti on, data on nu m ber of p a ti ents to be tre a t- ed, pro tocols for the all oc a ti on of f ac i l i ty space and staff ti m e, tre a tm ent pro tocols for opportu n i s tic infecti on s, s econd line tre a tm ent regi m e s for drug resistant pati en t s, and the preven ti on of m o t h er- to - child tra n s m i s s i on should also be en tered into the model. With these input s, a proper co s ting model can produ ce esti m a tes for to t a l costs and re s o u rce requ i rem ents under the va ri o u s policy scen a rios for an A RV progra m The World Bank con su l t a ti on in Bu rk i n a Faso here illu s tra tes su ch an exerc i s e. See annex A. The uses and implicati ons of su ch co s ting estim a tes must be caref u lly con s i dered. A proj ected i n c rease in health care costs or an ad d i ti onal bu r- den on the state exch equ er (even with low pri ced m edicines) might be bet ter interpreted as an u r gent signal for ad d i ti onal don or funds than a s i tu a ti on wh ere meaningful interven ti on is beyond re ach. Long-term economic effect of HIV/AIDS and other considerations One important econ omic impact of HIV/AIDS is the po ten ti a lly disastrous decline in human capital. A team of s ch o l a rs esti m a ted the l on g - run econ omic costs of AIDS in So uth Af ri c a ( Bell, Deva ra ja n, and Gers b ach 2003) 3 : Ex i s ting esti m a tes of the mac roecon omic co s t s of A I D S, as measu red by a redu cti on in the growth ra te of G D P, a re modest (bet ween 0.3% and 1.5% annu a lly ). Th ey are undere s ti m a te s. HIV/AIDS does more than de s troy ex i s ti n g human capital. Because it affects mainly yo u n g adu l t s, it we a kens the mechanism for one genera ti on to transmit knowl ed ge and abi l i ties to the nex t. Cu mu l a tively, this we a kening ac ro s s mu l tiple gen era ti ons can be deva s t a ti n g. With high prem a tu re adult mort a l i ty, t h ere may be a progre s s ive co llapse of human capital and produ ctivi ty. The policy instru m ents ava i l a ble to a governm ent in this situ a ti on are : Spending mon ey to contain the disease and tre a ting those infected Su pporting orph a n s, p a rti c u l a rly their edu c a ti on Using taxes to finance these ex pen s e s App lying this model to So uth Af rica yi el ded the fo ll owing re su l t s. Wi t h o ut A I D S, the co u n try s h owed modest econ omic growth and univers a l edu c a ti on in three gen era ti on s. Wi t h o ut a nyt h i n g being done to combat the ep i demic as it curren t- ly exists in So uth Af ri c a, the stu dy esti m a ted a com p l ete econ omic co ll a p s e in three gen erati ons (Bell, Devera ja n, and Gers b ach 2003) Im port a n t ly, the stu dy also foc u s ed on the rel a tive lon g - term econ omic ben efits of d i f feren t l evels of i n terven ti on. With optimal spending on the ri ght progra m s, it was esti m a ted that growt h wi ll con ti nu e, t h o u gh at a slower ra te than wi t h- o ut A I D S. Wi t h o ut pooling (def i n ed as a soc i a l pro tecti on sys tem wh ere all ch i l d ren are cared for by ex ten ded mem bers of the family ), growth wi ll be slower. Wi t h o ut sch ool atten d a n ce su b s i d i e s, f utu re econ omic growth was esti m a ted as d i s- ti n ct ly slu ggi s h. 2 Partners for Health Reformplus (PHRplus) project, the U.S. Agency for International Development's flagship project in health policy and systems strengthening, has developed the AIDSTREATCOST (ATC) antiretroviral modeling software to determine costs of implementing ARV Programs. For further information readers should consult: 3 Clive Bell, Shantayanan Devarajan, and Hans Gersbach (2003), The Long-run Economic Costs of AIDS: Theory and Application to South Africa, World Bank, Washington D.C. Available at www1.worldbank.org/hiv_aids/docs/bedege_bp_total2.pdf