Opinion: Policymaking and ARVs: A Framework for Rational Decision Making

Pressured from within by a growing demand for therapies that are reducing AIDS death rates in industrialized countries and from without by offers of donor funding, policymakers in low- and middle-income countries are being forced to make decisions about providing access to antiretroviral (ARV) treatment for HIV. In some cases, they are making investments that will not be affordable, cost-effective, sustainable or equitable over the long term, which may eventually lead to the withdrawal of subsidized access in the future. Conversely, some policymakers in countries that could realistically afford to subsidize open access to ARVs incorrectly assume that these medications cannot be affordably purchased.

In either case, vital decisions are being made based on severely limited information. Little is known about the extent of the demand for the drugs, the ability of governments and individuals to pay for them, or the economic impact of various levels of public subsidy for ARVs. In such a vacuum of information, short-term political considerations, rather than a realistic assessment of what can be offered, are likely to predominate.

In deciding whether and how to provide access to ARVs, policymakers in non-industrialized countries have a number of options, ranging from full public subsidy of the three- or four-drug combination known as highly active antiretroviral therapy (HAART) to no public involvement in providing access. So far, most policymakers have opted to support more limited access by: 1) funding some ARVs (but not the more expensive protease inhibitors), 2) providing AZT to pregnant women to prevent vertical transmission, 3) offering partial government subsidies, or 4) negotiating discounted, but unsubsidized, purchase of ARVs.

In order to evaluate the costs and benefits of each of these options and to identify creative ways of affordably subsidizing access to ARVs, policymakers need information on the demand for ARVs, the ability of those who need the drugs to pay some portion of the cost, the economic impact of the health benefits of ARVs, and the cost-effectiveness of ARVs compared to that of other drugs. They also need to evaluate their countries' overall capacity to deliver ARV therapy and effectively monitor clinical progress.¹ Finally, they need to assess the political and financial commitment of their own governments to sustain support for ARV therapy and the potential impact of government subsidies on health care for the impoverished.

Once this critical information has been collected, it should be assessed in the context of an objective and dynamic framework that enables policymakers to weigh issues of affordability, cost-effectiveness, sustainability and equity. Such a framework should not only allow countries to decide what is affordable now, but also to monitor how changes in drug prices and physical capacity should affect policymaking in the future.

Affordability

Although ARVs have been shown to reduce mortality and improve the quality of life of people living with HIV/AIDS in many high-income countries and some middle-income countries, the economic realities of providing access to these drugs can be overwhelming. In countries where annual public health expenditures are U.S.$3 to $30 per person, public provision of HAART, which can cost from $7,000 to more than $20,000 per person per year, is likely to be unrealistic.

In Malawi, for example, per capita income is $180 and public health spending is only $3 per capita. More than 700,000 people--15 percent of the adult population--are currently living with HIV or AIDS. It has been estimated that full public subsidization of HAART would consume 84 percent of the country's gross national product.² Thus, for Malawi, access to HAART for all who need it is completely unaffordable.

In Costa Rica, where the per capita income is $2,640, the annual purchase of $7,000 worth of ARVs is also out of reach for most people living with HIV or AIDS. However, unlike Malawi, Costa Rica is at an early stage in the epidemic, with only about 360 people who are aware of their HIV status (out of an estimated 3,200 people living with HIV). The small number of people who require access to therapy, combined with a relatively well-financed and well-equipped health system, means that the recently enacted public policy of fully subsidizing HAART consumes only about 2 percent of the social security budget. The actual cost incurred by the Social Security Institute might be even less if one includes the economic benefits of introducing HAART, such as reductions in inpatient visits, decreased demand for drugs to treat opportunistic infections and increased labor productivity.

The countries most likely to be able to afford ARVs are those with the smallest demand (lowest HIV prevalence) and the highest level of available resources (highest per capita income). Brazil, Mexico and Costa Rica, which have initiated some public subsidization of ARV therapy, are relatively high-income, low-prevalence countries. Countries such as Zimbabwe and Malawi, which have a relatively low gross domestic product and a high HIV prevalence, have so far not pursued access to ARVs. Others, such as South Africa, are taking a middle ground by offering AZT to pregnant women. Côte d'Ivoire, Chile, Uganda and Vietnam are making ARVs available to selected centers with appropriate clinical capacity through a Joint United Nations Programme on HIV/AIDS (UNAIDS) initiative that provides discounted, but unsubsidized, access to ARVs.

In some cases ARVs may be affordable to some through partial subsidies. While partial subsidies might not be equitable, they are likely to expand the number of people who can afford ARVs. For example, it might be feasible for a government to subsidize 60 percent of the cost of ARVs and for individuals to pay the remaining 40 percent. Before pursuing this option, government officials must have an idea of the number of people who would take advantage of such a subsidy (their "willingness to pay" for the unsubsidized portion of the costs) and how this in turn might affect budgetary requirements. The amount that consumers are willing to pay at various prices (the elasticity of demand) will determine the total public and private resources needed when offering a subsidy for ARVs.

Cost of ARVs to consumers and number of consumers who will buy them at different levels of subsidy: a hypothetical example of the elasticity of demand

Cost-effectiveness

It is also necessary for policymakers to determine whether an investment in ARVs would be cost-effective. In other words, given other pressing health care needs, is it wise to invest in ARVs? While a country might find ARV therapy affordable, its policymakers might not necessarily conclude that it is a cost-effective use of limited resources.

There is growing evidence that ARVs can provide significant medical and economic benefits to a country's health care system. Data from the United States, for example, illustrate that HAART reduced AIDS-related mortality by 75 percent and AIDS-related morbidity by 73 percent over three years.³ In the Brazilian state of São Paulo, AIDS-related mortality has declined 32 percent since protease inhibitors became available in 1996.⁴

Data from industrialized countries suggest that despite the high cost, the benefits achieved by averting opportunistic infections and inpatient visits may make HAART a cost-effective option and may even produce savings. It is noted, for example, that one inpatient episode in the United States costs an average of $7,000. Therefore, the cost of a year's supply of protease inhibitor (a type of drug that must be taken in combination with other ARVs) at an annual cost of $6,000-$7,000 could be completely offset if even one inpatient episode were averted.⁵

The cost of HAART has been shown to be at least partially offset by reductions in inpatient hospital care and shifts toward outpatient care in the United States, Ireland and France. The CAESAR trial in Canada, Australia, Europe and South Africa showed that patients receiving lamivudine, compared to those in the placebo group, had significantly fewer hospital admissions (11 versus 6 percent), unscheduled outpatient visits (15 versus 10 percent) and prescriptions for an HIV-related illness (43 versus 30 percent).⁶

Despite the medical and economic benefits of ARVs in predominantly industrialized countries, many low- and middle-income countries are likely to find it more advisable to invest in less complex and costly drugs. For example, in the poorest countries, where access even to essential drugs is not assured, it is likely to be more cost-effective initially to invest in drugs to treat chronic symptoms of HIV/AIDS, such as imodium for diarrhea or non-essential antibiotics such as ceftriaxone or ciprofloxacin for septicemia, rather than in more expensive ARVs.⁷

While it is unlikely that countries will have the complete information necessary for performing a rigorous cost-effectiveness or cost-benefit analysis before making a decision about the public purchase of ARVs, it is imperative that they pursue a preliminary assessment of the resources necessary to invest in such expensive drugs. Furthermore, countries should establish the mechanisms necessary to monitor the costs and benefits of such drugs once they are purchased, so that future decisions regarding longer-term commitment of resources can be more fully informed.

Sustainability and Capacity

Policymakers who do conclude that ARVs are both affordable and cost-effective must next determine whether such care is sustainable. Sustainability depends on the amount of time during which treatment will be necessary. Unfortunately, the duration of treatment required for patients using ARVs remains unclear. Most data indicate that patients with a few years of treatment with HAART quickly relapse if they discontinue therapy. Current estimates suggest that treatment will have to be continued for 5 to 20 years, or possibly even longer.

The impact of discontinuing ARV treatment can be devastating from both a clinical and a political perspective. A lack of politically and financially sustainable commitment to subsidizing ARVs and to the infrastructure needed to deliver them can lead to an interruption of therapy, which can cause drug resistance that could make future treatment ineffective.

Politically, offering an effective combination of drugs and then withdrawing them is probably worse then never introducing the drugs in the first place. Therefore, if governments do introduce ARVs, they must be committed to providing these drugs for the indefinite future.

In addition to the length of treatment, policymakers need to carefully review the national capacity (human and technical resources and infrastructure) necessary to administer and monitor complex and potentially toxic drug regimens. Any decision to provide access to ARVs must include a realistic assessment of the ability to sustain the staff training and improvements in infrastructure required for treatment, safe drug delivery and storage, laboratory testing, patient follow-up, and treatment of drug side effects. 

Equity

The fourth consideration in selecting a policy on ARV therapy requires evaluating the equity of ARV provision. On the one hand, global equity would demand that ARVs be made available to all, regardless of whether they live in a low-income or a high-income country. Proponents of global ARV access to all argue that people should have equal access to life-saving drugs. Despite this appeal, few donors or pharmaceutical companies have been convinced that it is their responsibility to provide access to ARVs to all those cannot afford them. Donors have noted that the cost of providing these drugs at a global level is likely to be close to $36 billion per year.²

Conversely, others maintain that a concern for equity should discourage countries from spending scarce public resources to subsidize access to expensive drugs. The argument is made that ultimately the impoverished will pay the price of subsidizing ARV access for a few (probably the most wealthy or influential) when health care resources get diverted. Such arguments against AIDS exceptionalism have also been aired within the United States.⁸

Policymakers must assess who the winners and losers are in any effort to subsidize access to care. They must ensure that, at the very least, the most vulnerable members of society are not made worse off by the diversion of scarce resources for ARVs, and that there are ways of encouraging equal access for those who are most in need.

-- Steven Forsythe and Charles Gilks

Steven Forsythe, MBA, is a lecturer in health economics and a PhD candidate at the HIV/AIDS Work Program of the Liverpool School of Tropical Medicine. He previously worked as the health economics officer for FHI's AIDSCAP Project.

Dr. Charles Gilks, DPhil FRCP, is a senior clinical lecturer in tropical medicine and manager of the HIV/AIDS Work Programme of the United Kingdom's Department for International Development.

References

1. WHO/UNAIDS. Guidance modules on antiretroviral treatments. WHO/ASD/98.1, UNAIDS/98.7. Geneva: World Health Organization, 1998.
2. R Hogg, KJP Craib, A Weber, et al. One world, one hope: The cost of making antiretroviral therapy available to all nations. Poster D-42283, 12th World AIDS Conference, Geneva, Switzerland, June 28 – July 3, 1998.
3. B Hirschel, P Francioli. 1998. Progress and problems in the fight against AIDS. New England Journal of Medicine 338(13):906-908.
4. C Del Rio, P Cahn, G Friedland. Antiretroviral therapy in Latin America. 1998. AIDS 12(9):12-13.
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6. CAESAR Coordinating Committee. 1997. Randomised trial of addition of Lamivudine or Lamivudine plus Loviride to Zidovudine-containing regimens for patients with HIV-1 infection: The CAESAR Trial. The Lancet 349:1413-1421.
7. CF Gilks, K Floyd, D Haran, et al. 1998. Care and Support for People Living with HIV/AIDS
   in Resource-poor Settings. Department for International Development occasional paper.
8. DJ Casarett, JD Lantos. 1998. Have we treated AIDS too well? Rationing and the future of AIDS exceptionalism. Annals of Internal Medicine 28:756-759.