To treat... or not to treat THE HIV/AIDS Cost Paradox

Published: 01-NOV-03

The world over, politicians, medical practitioners and ordinary people are discussing one of the biggest cost paradoxes - is it cheaper to treat HIV/Aids patients or not? This is of particular relevance to poor countries where the pressure is on governments to pay for treatment. Elvira van Niekerk investigates.

Sub-Saharan Africa is the region in the world that is most affected by HIV/Aids. Estimates are that about 29.4 million people are living with HIV/Aids and about 3.5 million new infections occurred in the region in 2002. To treat any disease of this magnitude would cost a fortune, but treating HIV/Aids is even more expensive because of all the aspects involved.

Treatment costs

Estimates of what it would cost to treat Africans who suffer from HIV/Aids tend to differ based on the HIV/Aids prevalence statistics used, the type of medication and the suggested treatment. But regardless of what the estimate is - it is a given that it will run into billions of US dollars, an expense that most African countries cannot afford.

The cost of HIV/Aids treatment is based on the cost of treatment and counselling as well as the biggest expense in this case - medication.

For example, a World Bank report states that the annual cost for a patient receiving Antitretroviral (ARV) treatment is based on the cost of the drugs, the cost of four outpatient visits, the cost of four complete blood cell counts, four CD4 counts, four viral load tests and four chemistry panels. According to the report, per patient ARV therapy per year would range from US$3,750 to US$4,722 for AZT therapy and from US$8,776 to US$13,902 for triple-combination therapy.

However, the actual medication makes up between 58 percent and 77 percent of the total cost. If cheaper drugs could be obtained, the overall cost would be drastically reduced.

An example of this is new triple therapy produced by an Indian manufacturing company that is used in a project in Mozambique where total triple therapy generics would cost about US$80 a month. Although this is still double the amount what most Mozambicans earn a month - it is substantially less than branded drugs.

Another cost estimate is that of the Programme for the Collaboration Against Aids and Related Epidemics (ProCaare) which states that costs would be in the region of about US$1,100 per patient per year.

In South Africa, the estimation is that people pay about ZAR1.300 a month - monitoring costs totalling about ZAR15,000 a year.

In Lesotho (one of the worst affected countries), there are not the same restrictions on the provision of generic drugs as in South Africa with the effect that companies such as Cipla and Ranbaxy sell first line triple therapy ARV medication for about ZAR600 a month per patient. It must be noted though, that this is only the cost of medication and does not include any additional treatment costs.

A cost model for Africa

Douglas Ball from the Department of Pharmacy and Klara Tisocki from the Department of Clinical Pharmacology at the University of Zimbabwe, developed a simple economic model of HIV/Aids prevention and treatment in private sector settings for developing countries. They point out that this is a very basic model that, although it has certain limitations, can give an idea of what it would cost companies to treat employees based on different scenarios.

As an example, they created three different scenarios and calculated the related costs.

  • Basic health care provided by no special programmes targeting HIV/Aids
  • HIV/Aids prevention programme including education, prevention support such as Nevirapine, Aids care and strengthening of quality of TB, STD control and management
  • HIV/Aids prevention programme and ARVs provided to patients presenting with Aids defining syndromes (or CD4 T cell count of less than 200)
Their finding was that the cost for a company with 1,000 employees in a country where the HIV/Aids prevalence rate is in the region of 20 percent, the cost per year would be US$9,930 (scenario 1), US$11,180 (scenario 2) and US$21,770 (scenario 3) to the company.

However, the biggest expense for this is once again the ARV drugs and should cheaper drugs become available, costs would decrease.

In conclusion, they point out that the implementation of a specific HIV programme without ARV treatment will incur minimal costs for companies, however, ARV treatment - even if drug costs can be limited - will require significant investment.

They warn that in an unstable economic environment, this might place too much strain on private companies.

What makes the cost factor even more daunting is that this is not a once- off treatment plan, but an ongoing one for the remainder of the patient's life.

A UNAIDS estimate is that US$2 billion was needed in 2002 to treat the disease in Africa and by 2005 US$5 billion will be needed. By 2007 the organisation estimates that US$15 billion a year will be needed for treatment of HIV/Aids in sub-Saharan Africa. This level of investment will have to be maintained for a decade after that.

Impact of HIV/AIDS if no treatment is available

Many people argue that it is not practical to provide ARV therapy to poor countries.

To start with, most people in these countries don't receive quality medical care for simple ailments, illiteracy levels are often above 40 percent in many African countries and the level of HIV/Aids awareness is questionable.

However, on the other hand, organisations such as the Treatment Action Campaign in South Africa believe that treating HIV/Aids is cheaper than not doing anything.

"Given the alternative, which is millions of deaths, huge numbers of orphans, loss of human capital in the form of teachers and nurses and immense social dysfunction, this (an estimated ZAR7 billion a year for ARV treatment in South Africa) is affordable," says TAG national manager Nathan Geffen. UNAIDS lists several major negative effects that an untreated HIV/Aids pandemic will worsen

1. Households

  • In urban areas of Cote d'lvoire, spending on school education fell by half, food consumption went down 41 percent per capita while healthcare more than quadrupled in households where someone had Aids.
  • Since the Aids pandemic began, 13.2 million children (95 percent in Africa) lost either one or both parents while they were younger than 15.
2. Education
  • In the Central African Republic, almost as many teachers died as retired between 1996 and 1998. Of those who died, 85 percent were HIV positive.
  • In the first 10 months of 1998, Zambia lost 1,300 teachers - equivalent to two- thirds of the new teachers trained every year
3. Health sector
  • In 1997, public health spending on Aids alone exceeded two percent of GDP in seven of 16 African countries where total health expenditure from public and private sources on all diseases accounts for three to five percent of GDP.
4. Agriculture
  • Agriculture provides a living for as many as 80 percent of people in certain countries. In one district of Tanzania, time spent on farming has shifted radically because of Aids. A woman with a sick husband spent 60 percent less time on agricultural activities than usual.
5. Economy and business
  • Some companies in Africa have already felt the impact of Aids on their bottom line. Management at one sugar estate quantified the cost of HIV infection as follows: 8,000 days of labour lost to illness between 1995 and 1997; a 50 percent drop in processed sugar recovered from raw cane between 1993 and 1997; a tenfold increase on funerals between 1989 and 1997; and a tenfold increase in health costs.
It is evident from this that by not treating the disease, direct and indirect costs such as training, replacement of personnel, looking after the sick and taking care of orphans will be astronomical.

Untreated HIV/Aids is a serious threat to the idea of the African Renaissance and Nepad in that it drastically reduces the average life expectancy of people on the continent, thus bringing about a situation where there will not be enough skilled and trained people to support economic growth on the continent.

That African countries cannot afford treating the pandemic themselves is a known fact, and it will depend on international funding to ensure that this major hurdle in the way of African development is managed in the best way possible.

Print this page Send this article to a friend

Market news on your cellphone
Get live JSE listed shares, warrants, major indices, brent crude oil, international markets, agricultural futures & daily market analysis via SMS on your mobile.
Find out more...

Energy in Africa
Energy in Africa is an intelligent and in-depth look at how energy impacts people, places, projects, price and development around the African continent.
Subscribe now...

African Business Leaders Forum
African business and public sector leaders define and construct a prosperous future for the continent.
Find out more...

Online travel bookings
Planning to travel? Book accommodation in Africa & South Africa here.
Book now...

Contact us | Advertising | Subscriptions | Newsletter | About us | Employee Email

All material copyright Business in Africa. All rights reserved. Material may not be published or reproduced in any form without prior written permission. Read these terms & conditions. Read our privacy statement and security statement. Powered by Mail & Guardian Online & The domains, are owned by Business in Africa.