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Last Updated: Wednesday, 3 December, 2003, 11:40 GMT
Facing the cost of Aids

By Evan Davis
BBC Economics Editor

It seems almost grotesque to worry about the economic consequences of a disease which is fatal.

Yet one of the biggest social and human consequences of the disease is precisely through its effect the economies of the countries affected by it.

Samkelisiwe and her mother, Natal (Positive Lives)

In the rich nations of the west, it is clear that economic issues are a concern, but a manageable one.

But in the poorest countries of the world, there is no dichotomy between worries about economic development and concerns about human suffering.

It only became apparent in the 1990s that HIV/Aids is a significant economic issue.

In the developed world, as new treatments emerged, health systems had to face the costs of purchasing them.

Drugs costs

As HIV drugs have had the effect of turning an acute disease into a chronic one, treatment costs are long term.

In addition, the virus has the ability to mutate, which means that new treatments need to be developed all the time to cope with the virus's resistance to previous drugs.

Nigerian Aids patient benefiting from USA drug donation
New drugs need to be developed constantly to fight the virus
This ensures that research costs are high and that the "latest drug" is always likely to be under patent, and hence expensive.

For example, the most recent addition to the HIV armoury, Roche's Fuzeon - a drug that sits in a whole new class of HIV therapy - is priced at about $20,000 per patient per year.

Fortunately, most treatments are cheaper than this, and in most of the developed world, levels of HIV prevalence are sufficiently low that at the moment the costs are broadly containable.

The first thing poor families affected by Aids ask for is not cash or drugs, it is food
James Morris, Executive Director, World Food Programme
HIV has a prevalence among adults of about 0.1% in the UK, 0.3% across the developed world generally, and about 0.6% in the United States.

With the treatment cost per patient on a scale of about half the annual average income of each person, the cost of HIV runs to a few tenths of one percent of the annual output of a developed country.

This is not negligible, but it is easily tolerable.

Middle-income countries

When we move beyond the developed world, however, problems grow.

In the middle-income countries, the economic cost of treatment may not be so easily absorbed.

The impact of Aids on the hardest-hit countries

The average income is smaller, HIV prevalence tends to be a little higher than in the richer nations, and the virus is spreading worryingly fast.

Access to cheaper treatments is growing in some of these countries.

Brazil and India are the two countries that are best able to produce generic versions of patented drugs.

It is not impossible that treatment prices may reach about a dollar a day, instead of the usual western price of about $30.

It appears that generic imitation will not face a credible challenge under international trade rules.

Hardest-hit countries

The really significant economic problems arise, however, in the very poorest countries, especially in Sub-Saharan Africa.

Adult HIV prevalence is about 9%, and with the acute stage of the disease largely untreated there is a critical effect on prime-age adults, the most economically crucial portion of the population.

Sparrows Nest, Roodeport, South Africa. Home for adults and children with HIV/Aids
There are 11 million Aids orphans in Sub-Saharan Africa
To put the prevalence into context, the UN estimates that by 2015, the population of Botswana will be 31% smaller than it would have been in the absence of Aids.

In addition, because the disease is a predominantly heterosexual phenomenon in Africa, there is a more significant problem of disease in couples with children than in the west, leaving millions of orphans to be looked after by relatives, village communities or state authorities.

"The first thing poor families affected by Aids ask for is not cash or drugs, it is food", said James Morris, Executive Director of the World Food Programme.

It is a comment that puts the differences between HIV in the developed and the developing world into perspective.

Health systems

Furthermore, health spending in Africa is tiny by western standards.

Botswana, a relatively well developed country, spends $358 per person on health each year, and could reasonably expect to distribute widespread treatment.

Others in Africa spend far less: from Angola ($52) to Nigeria ($15) to Zambia ($49).

These budgets may accommodate treatment for special groups (like HIV positive pregnant women, whose transmission to their unborn child can usually be prevented) or treatment for some of the opportunistic infections associated with Aids.

But universal prescribing of antiretrovirals is far more difficult.

Even if the drugs were provided by Western companies or generic competitors free, administering them would represent a significant burden to the health systems in many African countries.

Funding gap

It is not altogether surprising that in Sub-Saharan Africa, at the end of 2002, an estimated 50,000 people were on antiretrovirals, out of an estimated 4 million or so who need them.

Of course, there is a growing acknowledgement of the problem of HIV, both in thwarting economic development and in the cost burden of modern treatment.

There are global initiatives to help. UNAids estimates that private, national and international sources will disburse $4.7 billion in middle and low income countries this year.

But while that represents huge growth, but is still half the amount that UNAids thinks will be needed by 2005.

The following comments reflect the balance of views we received:

I think all policy makers, including the UN and WHO, should not focus only on expenditures for those afflicted with disease. Rather they should get to the route of the problem and focus on improvements in education, agricultural development and infrastructure.
Chris Muldoon, Massachusetts, US

In reality the push to treat HIV in the third world is a defensive action for the first world nations
Iain, Brighton

The reason HIV is being taken seriously by western governments is because it's far easier to transport than other diseases. Someone travelling with visible symptoms of malaria for example is very quickly going to find themselves quarantined. Someone travelling with HIV is very likely to appear in good health. Once in the host nation any number of people can then be infected from that one individual. In reality the push to treat HIV in the third world is a defensive action for the first world nations. However you cynically people regard this, the truth is, it must be tackled, and the means are irrelevant.
Iain, Brighton

Please let us not pretend that HIV isn't a massive problem. It is a massive, complex problem, not solved without reducing poverty, not solved without improving broad based primary healthcare services, not solved without improving food security, not solved without changes in gender power relations and patterns of sexual behaviour. Drugs have one part to play but they are no easy solution. If you live in a country where things aren't this bad yet - count yourself lucky and get out there and make sure you don't end up like this. Pretending that Aids is an illusion will not help you.
Katherine Cash, Pretoria, South Africa

I totally agree with my colleagues suggesting that money should be pumped into the primary health care and not concentrating on HIV/Aids per se. Malaria like in our country is the number one killer. There is a lot starvation in our country and if people can have enough food on there tables then the issue of HIV/Aids will not be highly preached. We need food and decent living that is all. Poverty is killing people en mass and not the pandemic as exaggerated.
Respicus Chipanta, Lusaka, Zambia

HIV is far from an illusion, it is real, it is killing people and it is killing development
David Lesser, Gloucester

There are other significant costs of the HIV pandemic that Evan failed to mention. When I was in Zambia, Barclays bank and other large multinationals had to double employ every job at middle management level because they could not risk the sudden skills gap that HIV would otherwise inevitably leave in the next few years. The age groups most affected by this disease should be those contributing the most to the economies of third world countries, instead they are spending years requiring support and care and eventually dying. HIV is a tragedy adding yet another layer to those of malaria and poverty. It requires extra resource to help tackle both the effects on sufferers and the effect on economies in the developing world. I believe strides were being made in primary healthcare and clean water provision in a lot of areas. This progress is likely to be halted trying to deal with the scourge of HIV. HIV is far from an illusion, it is real, it is killing people and it is killing development.
David Lesser, Gloucester UK

As a person with HIV, I can authoritatively state that HIV is not an illusion, and that there is no choice between treating HIV and treating other diseases: every human has a basic right to healthcare regardless of diagnosis - each according to his or her need. The ignorant judgemental head in the sand attitude (with its implicit view that people with HIV are less worthy than others) is what has led to the current disaster. There are no good or bad diseases: let's relieve all suffering to the best of our ability: it is plain we are not doing our best in Africa.
Ian Kramer, Suffolk, UK

Considering that HIV will in the next 10 years wipe out half of Africa - and here we need to consider HIV does not kill itself - it weakens the immune system so that the other diseases like malaria, TB, typhoid etc can kill easily. We are fooling only ourselves if we consider HIV an illusion.
Prashant Malhotra, New York, USA

Yes many people in Africa are dying, yes many children are orphans, and yes the health situation has impacted the economic environment of the continent. But these problems have long been with Africans. It seems to me that the total number of people dying of malaria, TB, typhoid, and others are included with the total amount of people that die of Aids. Fighting Aids doesn't bring anything for Africa. But fighting the rest of other deceases will resolve to a greater extent the many problems of Africa including Aids (if it exists at all). So, I feel politicians and donors in the developed nations have a wrong understanding of the problem and hence its solution.
Kugndu Ogga, Africa

I have been working as a doctor in Africa for over 10 years now and have seen and still see hundreds of children dying of pneumonia, diarrhoea, measles, malaria and malnutrition, diseases that would cost a few dollars to treat or prevent. How can WHO talk about this main focus on "treatment" of Aids which costs hundreds of dollars per year without considering all the other diseases which are not the flavour of the day? What about all the thousands of women dying during delivery? How can you ignore the total picture? The money has to come from somewhere. Is this the healthcare for non HIV patients?
Carla Buddingh, Khartoum, Sudan

Carla is right. Let's put money into normal healthcare, clean water and grassroots development. HIV is an illusion.
Toby Gettins, Birmingham, UK

The danger with the approach suggested by Carla Buddingh and Toby Gettins is that by the time the results of investment in non-HIV initiatives start working, there will be many adults of child-bearing age who are not HIV positive. Yes there has to be investment in normal healthcare, clean water supplies etc but this has to be balanced against the need for healthy, fit adults who can work to improve economic conditions in their country and support the millions of orphaned and HIV/Aids infected children. I can't see any Western countries offering to take responsibility for these children who have been so badly let down by our so-called civilised societies.
Rowan Fothergill, Birmingham, UK

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