Will the world pay up to end HIV? Global AIDS funding

We are at a critical point in the history of the HIV epidemic. We potentially have the tools to end it but, asks guest writer Laura Lopez Gonzalez, where will the money come from?

This year, the Global Fund to Fight AIDS, TB and Malaria marked its tenth birthday. Conceived at the 2000 G8 summit in Japan, the Fund garnered more than US$2bn in pledges from donors when it was launched in 2002. By 2009, it had put almost 2.5 million people on HIV treatment and was underwriting the cost of about half of all HIV treatment in developing countries. It had also grown to account for two-thirds of TB funding worldwide, in an effort to tackle the leading cause of death among people living with HIV.

Just a year after the Fund’s creation, George W Bush created the President's Emergency Plan for AIDS Relief (PEPFAR). The United States is now the largest government donor to the HIV response globally, accounting for about 54% of international funding, according to the Joint United Nations Programme on HIV/AIDS (UNAIDS). In its first five years, PEPFAR prevented more than 740,000 AIDS-related deaths in the African countries in which it worked and had, on average, almost halved general mortality in people living in these countries.¹

But in 2008, the global recession hit and both the Fund and PEPFAR began to feel the repercussions. In 2009, almost 15% of donor pledges to the Fund went unpaid; in 2010, almost a quarter failed to materialise.

PEPFAR funding, which had increased on average by about US$0.9 billion annually since its creation, also began to flatline in 2009 and hovered around US$6.8 billion for the next three years.

The story of the Global Fund is the story of the international response to HIV: born ten years ago amid times of plenty, the Fund was successful beyond its founders’ dreams. As this sense of plenty has waned, the Fund has faced shortfalls and tough choices in a shifting aid paradigm, with new debates, including who should be giving, how much and to whom. At a time when the world knows more than ever before about how to stop HIV, funding shortfalls threaten not only the gains made during the life of the Fund, but also the possibility of capitalising on recent scientific findings regarding HIV prevention. Securing the future of international HIV funding is likely to put more pressure on mechanisms such as the Fund to show value-for-money results to donor countries dealing with domestic economic downturns.

The crisis comes to a head

The impact of the global economic crisis on HIV funding became clear in 2011, when the Fund cancelled Round 11 after donors failed to deliver US$2.2 billion. Some donors – Spain, Italy and Ireland – cited domestic recessions. Others, including Germany, temporarily suspended aid after media reports highlighted alleged fraud among Fund recipients, identified by the Fund’s Office of the Inspector General.

This retreat may have been heavy-handed, says Michael Gerson. He was Bush’s former speechwriter and a strong advocate for PEPFAR’s creation; he has since joined ONE, an international campaigning organisation addressing preventable disease and poverty, as a senior adviser.

“When the Global Fund exposed corruption in a few of its own country programmes in 2011, some legislators and countries used this information to indict the entire programme,” he says, speaking in a personal capacity. “If we want transparency and accountability in aid programmes, we can’t punish transparency when it happens. Fraud can be deadly and should be punished, but the exposure of fraud is an achievement – an essential commitment of effective aid.” 

The alleged fraud was neither new nor specific to the Global Fund. Both the Global Alliance for Vaccines and Immunisation (GAVI) and USAID have seen similar cases in recent years but, for Michel Kazatchkine, the Executive Director of the Fund at the time, the backlash was a sign of the times.

“In that economic context, the donors said: ‘Okay, we can’t explain to our people why we are funding countries that misuse money, so we will withhold our contributions.’ That decision was somehow unilaterally taken and I think the collective effort suffered from that.

To me, the main collateral damage of the economic financial crises has been the decrease in political mobilisation…we’ve lost the concept of global solidarity in the discourse. Michel Kazatchkine

“I think the big lesson is that collective effort is possible and yet hugely fragile and this economic and financial context is putting immense pressure on that,” he adds. “To me, the main collateral damage of the economic financial crises has been the decrease in political mobilisation…we’ve lost the concept of global solidarity in the discourse.”

Although the amount of money affected by the alleged fraud was relatively small, the Fund instituted a review of its financial risk management and addressed falling donor confidence. As part of resulting reforms, Colombian banker Gabriel Jaramillo assumed the newly created position of General Manager. After criticism regarding his leadership of the Fund, Kazatchkine resigned.

Jaramillo’s position is expected to reduce the heavy demands placed on former executive directors, which may have contributed to the criticism of Kazatchkine.

Laurie Garrett is Senior Fellow for Global Health at the Council of Foreign Relations, a US think-tank on international affairs. She says: “We set up these multilateral systems to look at global health problems, of which the Fund is one of the newest, but we expect these executive directors to spend their lives on planes, to appear at every ribbon-cutting and be in every village. At the same time, they can’t run their organisations… we burn these people out.”

Following the reforms, and as donors returned, the Fund announced US$1.6 billion would be available for new commitments as donors returned and the Bill and Melinda Gates Foundation pledged a further US$750 million.

Newly announced funds are also partly a result of a cost-saving staff reduction at the Fund’s Geneva secretariat. However, there are concerns that reforms have focused too heavily on financial management and too little on results.

Amanda Glassman is director of Global Health Policy and a research fellow at the Center for Global Development (CGD).

She says: “There’s certainly been an increase in the scrutinising of spending, but there’s been a [knock-on] effect because of the fear of committing errors. If you look at disbursements in 2011 into 2012, they look very low.”

Open Society Foundations’ (OSF) research conducted in three southern African countries found that, in some countries, the Fund had not disbursed all of the monies allotted under Phase I of some grants. In some cases, this money was deducted from Phase II renewals, according to the OSF research report,The First to Go: Community-level effects of Global Fund shortages in southern Africa.² 

“The Global Fund is going to have to convey to country partners what they need to do and build their confidence to spend again,” Glassman adds. “You want people to worry more about reaching the objectives and measuring results in a rigorous manner than whether or not they’ve submitted a photocopy of a receipt or the original.”

Similar concerns have been expressed in commentaries published by the Global Fund Observer (GFO), a news service run by the Nairobi-based Global Fund watchdog, Aidspan. An October 2011 article³ said this fear of spending may also apply to secretariat staff, who are in danger of becoming micro-managers as they nervously attempt to minimise and even eliminate risk.

The waiting game

The Fund has now said it will open new funding opportunities to countries in late September 2012 and begin making decisions on applications by April 2013.

As countries await these opportunities, they are struggling to deal with the gap in what, until now, had been regular funding opportunities from the body, according to international humanitarian organisation Médecins Sans Frontières (MSF). This situation was reported in MSF’s March 2012 report: Losing Ground: How funding shortfalls and the cancellation of the Global Fund’s Round 11 are jeopardising the fight against HIV & TB.⁴

Countries such as the Democratic Republic of Congo (DRC), Guinea and Burmaare already capping the number of people who can receive antiretroviral (ARV) treatment, while Uganda will be unable to increase the number of people starting ARV treatment annually.

Treatment caps will not only jeopardise countries’ abilities to meet the WHO guidelines but also their capacity to capitalise on recent research findings from the HPTN 052 study, which showed that starting people with HIV on treatment at CD4 counts of 350 to 550 (when they would otherwise have been ineligible for treatment) reduced their risk of transmitting HIV to sexual partners by 96%.⁵

In 2009, after studies showed that early treatment not only saved lives but also reduced loss to follow-up and TB incidence, the World Health Organization (WHO) revised its treatment guidelines to recommend HIV treatment initiation at CD4 counts of 350, as against the previously recommended threshold of 200. They also advocated for the phasing out of the ARV d4T (stavudine, Zerit), in favour of better-tolerated but pricier ARVs.

In the DRC and Malawi, plans to increase the number of health facilities providing prevention-of-mother-to-child-transmission (PMTCT) services have been jeopardised. So have ambitions in countries such as Mozambique to move more people on to better HIV treatment, in line with the WHO guidelines, according to the MSF report. Earlier treatment and better drugs have increased the costs of national treatment programmes. In September 2010, Malawi partially adopted the WHO recommendations. This at least doubled national treatment costs. In light of the cancellation and decreased Global Fund resources, which fund the purchase of almost all ARV drugs in the country, Malawi will continue enrolling new patients but will not be able to switch existing patients to newer, better tolerated drugs, according to OSF’s The First to Go report.⁶

Dwindling alternatives

With less access to PMTCT, affected countries may also see an increase in the number of babies born HIV-positive at a time when money for paediatric HIV treatment is shrinking. The MSF report cites multiple examples of UNITAID support for paediatric HIV treatment coming to an end in countries such as Swaziland, Uganda and Zimbabwe.

The World Bank, which is the second largest multilateral donor to HIV, is also phasing out funding for the DRC, Malawi and Mozambique by 2012, as it takes on a more technical assistance role.

In Zimbabwe, Round 11’s cancellation coincided with the Expanded Support Programme’s end. Funded by the United Kingdom, Sweden, Norway, Ireland and Canada, this programme will be replaced with the Health Transitional Fund, which will focus on nutrition and on maternal and child health. According to MSF, this has contributed to a treatment gap of about 66,000 HIV patients in the country who will not be able to access treatment in 2012.

While UNAIDS’ Zimbabwe operation is working with government to increase private sector investment into the HIV response, it estimates this will take several years to take off. In the meantime, it predicts, by 2015 about 360,000 people in the country will go without treatment, according to OSF’s report.

More than ten years ago, Zimbabwe introduced an AIDS levy to compensate for decreased donor support. In 2010, the levy collected US$20.5 million, representing almost a 260% increase in collections over the previous year. This was primarily due to contributions from industry, according to a statement released by the National AIDS Council of Zimbabwe.⁷

According to Asia Russell, Director of International Policy for activist group Health GAP, Zimbabwean civil society is now advocating for its government to increase the proportion of the levy spent on treatment from 50 to 80% in order to plug the gaps.

In addition, some countries – Zimbabwe included – are reprogramming existing Global Fund grants away from HIV prevention in order to shift cost savings towards essential HIV and TB medicines and diagnostics, according to OSF.⁸

In 2011, UNAIDS released its strategic investment framework.⁹ Premised on six basic programmatic activities, including PMTCT, medical male circumcision (MMC) and behaviour change, authors argue that – if implemented – the framework could avert more than 12 million new HIV infections and almost 7.5 million AIDS-related deaths between 2011 and 2020 worldwide.

While most countries seem to be safeguarding biomedical prevention methods such as PMTCT and MMC, the OSF research found that other aspects of prevention, such as the framework’s so-called “critical enablers”, or programming in areas such as human rights, community-based capacity building and retention in care, were being deprioritised.

Deprioritising prevention comes at a time when new infections continue to outstrip treatment coverage.

Professor Alan Whiteside is head of the Health Economics and HIV Research Division (HEARD) at South Africa’s University of KwaZulu-Natal. “The problem with prevention is it is seen as a poor relative to treatment - it is long term, messy, and attributing results is difficult,” he says.

He adds: “My big concern is [that] prevention will lose resources. Given there are still more new HIV infections than people put on treatment, this will be a problem until such time as we see the AIDS transition.”

The concept of an ‘AIDS transition’ was developed by Center for Global Development (CGD) senior fellow Mead Over. It plots a strategy to minimise HIV and argues that, to end local epidemics, countries will need to sustain recent reductions in mortality and bring down HIV incidence.¹⁰

PEPFAR meanwhile is scaling back funding for some countries, such as South Africa. Amanda Glassman comments that, ideally, PEPFAR would look to transition their funding of non-governmental organisation (NGO) partners to government contracts with these same organisations to facilitate continuity of care - but most governments don’t have a PEPFAR-sized budget to do this.

With a goal of initiating 400,000 people on ARVs annually, the South African treasury has projected that maintaining this pace in the next four years will lead to funding shortfalls.

Michael Gerson says that, although President Barack Obama has moderately increased HIV funding and made America’s first multi-year commitment to the Global Fund, donations to the Fund are unlikely to see large increases anytime soon.

He adds: “In a political environment where bipartisanship is rare, AIDS has been a hopeful example of co-operation and common purpose. But during the next four years, regardless of who wins the next American presidential election, we are not likely to see the scale of funding increases we’ve seen in global health during the last decade.”

The shifting aid paradigm

As international funding decreases, the debate over whether or not middle-income countries should continue to receive aid has heated up. These countries are seeing gains in gross domestic products, but many are also seeing a rise in inequality. Up to a billion of the world’s poor now call these countries home, according to a CGD working paper.¹¹

Some argue that these countries should continue to receive aid as long as it is directed to the poorest or the most vulnerable. Others advocate that middle-income countries should charge their middle classes sufficient income tax to fund HIV treatment and prevention services.

GAVI, for instance, already limits funding to countries with a gross national income per capita of less than US$1500. When countries surpass this, funding is phased out over three years. According to a recent blog published in the The Guardian by Glassman and visiting CGD fellow, Andy Sumner, by 2015 GAVI will phase out support to 17 of its largest current recipients.¹²

We have an emerging opportunity to drive the epidemic into the ground. Mark Dybul

The Global Fund’s cancellation of Round 11 was not enough to sustain current grants and finance its stop-gap measures, so the board also suspended funding for some low-burden, upper-middle-income countries such as China, Brazil and Russia.

The Fund is now reviewing its policy of allocating 45% of all grants to middle-income countries, according to Aidspan founder and former Executive Director Bernard Rivers.

The move away from funding middle-income countries was proposed in 2010 by the US-based policy NGO Results for Development in a study published in The Lancet. The study, which developed costings for four HIV treatment and prevention scenarios, estimated that – without a cure or vaccine – as much as US$722 billion might be needed to tackle the pandemic by 2031, a third of which would be needed in Africa. Authors argued costs could be substantially lower if donors made hard choices now, including phasing out aid to middle-income countries that have the resources – but perhaps not the political will – to support programming for relatively small epidemics among vulnerable groups, such as sex workers, men who have sex with men (MSM) and injecting drug users (IDUs).¹³

Russia may be a perfect example of a country with the resources, but not the will, to address HIV. As the country’s economy rose, it began to position itself more strongly geopolitically, and became a Global Fund donor. But HIV prevention efforts in the country continue to lag, according to Denis Godlevsky, advocacy officer of the HIV/AIDS International Treatment Preparedness Coalition in Eastern Europe and Central Asia. With Russia now classified as an upper middle-income country, international funding has dwindled. Meanwhile, the country continues to ignore its IDU population despite its HIV prevalence rate of almost 40%.¹⁴

“There are still a lot of people in Russia who believe HIV does not exist,” Godlevsky says. “Basically, there is no sexual reproductive health education in schools, no condom distribution, no long-term campaigns on TV… no harm reduction services, because basically the government doesn’t support harm reduction as a policy.”

Shona Schonning, the former Program Director of the Eurasian Harm Reduction Network, agrees that Russia’s burgeoning middle class is also not willing to pay to support the handful of organisations offering harm reduction services, including the provision of clean injecting equipment or methadone, which Schonning says should be a governmental responsibility.

“The whole issue is that the populations that need support are highly stigmatised in Russian society and, until recently, there wasn’t a culture of making donations,” she says. “The tax structure has improved and people are wealthier, but it would be a lot easier to gather money for kids with cancer than for heroin users.”

In the absence of local support, one Moscow-based NGO providing harm reduction services, the Andrei Rylkov Foundation for Health and Social Justice, has launched an international campaign for donations through the online giving site, GlobalGiving.

According to the World Bank's Global AIDS Program Director, David Wilson, middle-income countries might not need financial support so much as technical support.

“It’s true that HIV tends to be higher in somewhat better-off countries and to some extent that is tied up with greater mobility and inequality,” Wilson says. “We’re suggesting that HIV be tackled differently in countries that have resources. It doesn’t mean there’s not a role for international co-operation …but the form of support it takes may be very different.”

But Asia Russell argues that countries may still benefit from initial investments in HIV treatment and prevention. These could result in attitude gains that could strengthen the political will needed to ensure a long-term response to most-at-risk populations.

“What you find in many countries with higher incomes are concentrated epidemics, where inputs have been neglected for years for political reasons and where catalytic support from outside is needed initially,” Russell says. “But ignoring the country because it has a higher GDP is flawed and misguided…it will not free up resources commensurate with the gap in HIV funding and it would be misinformed to think of it as a resource mobilisation strategy.”

What the future holds

The United Nations estimates there is a US$9 billion gap in the HIV funding needed to meet its 2015 goals, including halving HIV incidence and eliminating paediatric infection. Meanwhile, the Fund has already begun its next chapter, setting up an appointment committee to select the next executive director.

According to Laurie Garrett, the right incoming executive director stands to benefit from some powerful and seemingly willing allies – if he or she can effectively collaborate with them. Ban Ki-moon has been re-elected to the post of UN Secretary-General, Dr Margaret Chan has been re-elected as the head of WHO and global health activist Jim Yong Kim has been appointed as President of the World Bank.

Garrett says: “What you’ll want [in a candidate] is someone who understands how to work diplomatically and collaboratively with other major institutions, who appreciates the needs of the poor, and is able to balance these against the priorities of donors in a way that minimises conflict.” She says that the right candidate would need to be proficient in at least three major languages.

“I think things we can forget about are [particular] race, ethnicity and gender as prerequisites, I’d hope we were past that,” she adds. But according to Bernard Rivers, the Fund plans to shortlist four candidates by November – two of whom must be women.

To fill the funding gap, the price of second-line and paediatric ARVs will have to decrease, according to the UN, which has begun advocating more heavily for the use of the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) to secure lower drug prices.

Meanwhile, activists and economists have proposed the introduction of a financial transaction, or ‘Robin Hood’ tax, that could generate US$48 billion annually across G20 countries if implemented at the lowest proposed rate.

In the meantime, donors will have to look at how to do more with less, achieving greater efficiencies. This is something in which the Fund has a comparative advantage over donors like PEPFAR, which continues to channel large amounts of funding through US-based partners.

“You can provide funding less expensively if you don’t have to go through certain bilateral US contractors,” Glassman says.  “From 2008, many of PEPFAR’s top contractors were universities in the US - an approach that allowed for rapid, immediate scale-up. However, universities are among the most expensive of organisations to work through, particularly for service provision activities. Some have overheads of more than 100%. They don’t disclose that publicly, but it’s an expensive way to provide care.”

There may be a shift away from these service providers as the need for clinical treatment trials declines, according to Glassman. But she added that PEPFAR also may need to work on the way it disburses money after recent media reports about US$1.5 billion in unspent funds.

Those formerly at the helms of the Global Fund and PEPFAR say that these organisations will have to be able to demonstrate results and value for money, now more than ever.

Michel Kazatchkine says: “In my five years with the Global Fund, what I have clearly perceived is that the most powerful message to attract funding and gain the trust of donors is to show results and cost-efficiency. To tell someone that the cost of first-line ARVs is now US$85 per patient per year, and that saves a life, is something very powerful.”

Mark Dybul, former US Global AIDS Co-ordinator (leading the implementation of PEPFAR), agrees.

“Results drive money,” he says. “There’s a way of increasing value for money by changing the way we operate and that becomes yet another argument for securing resources.”

Both men are also adamant that international funding for HIV is not a charitable movement – it’s economic sense, particularly at a time when the world may be in a short-lived window within which to end the HIV pandemic, according to Dybul.

“We have an emerging opportunity to drive the epidemic into the ground,” he says.

“If you look at sub-Saharan Africa, with the exception of one or two countries, you see HIV prevalences on a downward trajectory,” Dybul added. “If we layer in these new prevention modalities in to these downward trajectories, there are models that show we can achieve 0.05% incidence rates, which means epidemics are completely controlled.”

“If we wait five years, as some might be tempted to do in the current financial climate, that’s not going to work because epidemics might be on the upswing as they are in Uganda,” he adds. “If we wait until then, not only will it be more expensive but it might not be possible. Epidemics are a lot harder to control on the way up than on the way down.”

Laura Lopez Gonzalez is a freelance health journalist based in Johannesburg, South Africa, and worked as a research consultant on the Open Society Foundation’s recent Global Fund research quoted in this piece.