HIV/AIDS Funding

1. Overview

Global spending on HIV/AIDS increased from $300-million in 1996 to $6.1-billion in 2004 (source). However, this is considerably lower than the UNAIDS-estimated $15-billion needed to effectively respond to the HIV/AIDS epidemic in low- and middle-income countries in 2006. This figure is expected to rise to $22-billion in 2008.

Most of this funding will need to come from the international community.

In 2004, UNAIDS projected:

"New global estimates ... show that for effective world-wide responses to AIDS, US$12 billion are needed by 2005. By 2007 this amount grows to $20 billion. The US$20 billion in 2007 would provide antiretrovirals to just over 6 million people (over 4 million in sub-Saharan Africa ), support for 22 million orphans, and provide HIV voluntary counseling and testing for 100 million adults, school-based AIDS education for 900 million students and peer counseling services for 60 million youth not in school.

"In sub-Saharan Africa, 38% of the resources will be needed for HIV care and treatment, 35% for prevention, 22% for orphan support and 5% for other programme costs, including policy, advocacy and administration.

"... Countries with the largest resource needs include large countries with high HIV prevalence levels (South Africa, Nigeria and Ethiopia), those with lower HIV prevalence, but very large populations (China, Russia and India), and those with high coverage rates (Brazil). In order to bridge the AIDS funding gap, budgetary allocation in low- and middle-income countries would have to increase, but a substantial proportion will need to come from international sources (up to 80% in sub-Saharan Africa and parts of Asia ).

"... Domestic spending on AIDS has increased dramatically in many countries, including some of the poorest. UNAIDS estimates that total domestic government spending on AIDS programmes in 2002 by 58 low- and middle-income countries reporting data for three years was about US$995 million — twice the amount documented in 1999.

"South Africa, which has the largest number of HIV-positive people in the world, raised AIDS spending in the national budget for 2003-2004 by 86% over the previous financial year.

"But low-, and even middle-income countries, find it difficult to boost domestic spending to the level needed; this often results in unsustainable responses, especially treatment programs. The long-term impact of stop-start efforts can have devastating effects."

2. Funding Sources

National governments

Donor governments provide the majority of funding in the fight against HIV/AIDS through bilateral (country-to-country) aid, such as the U.S. President's Emergency Plan for AIDS Relief (PEPFAR), and contributions to multilateral organisations such as the Global Fund to fight AIDS, Tuberculosis and Malaria (Global Fund).

Multilateral funding organisations

Multilateral funding organisations disburse funding that is pooled by countries and the private sector. The main multilateral organisations include the World Bank, the Global Fund and different UN entities.

Private sector funding

The private sector, which includes foundations, philanthropic organisations, corporations, international NGOs and individuals, is an important part of HIV/AIDS funding. The Bill and Melinda Gates Foundation is the largest philanthropic funder in the HIV/AIDS arena.

This funding is often used to pilot new strategies and build partnerships between the private and public sectors.

The private sector also supports HIV/AIDS initiatives through non-cash mechanisms, including lowering the cost of HIV/AIDS medicines, in-kind support and commodity donations.

Domestic resources

Spending by affected country governments and households/individuals makes up a significant part of HIV/AIDS spending. UNAIDS estimates that domestic spending amounted to $2-billion in 2004.

Some national governments fund most of their country's HIV/AIDS spending. In Latin America, national governments account for more than 80% of HIV/AIDS spending. Individuals in some countries make substantial out-of-pocket payments for HIV/AIDS care. For instance, some estimates indicate that Kenyan individuals account for up to 45% of their country's total HIV/AIDS expenditure.

3. President's Emergency Plan for AIDS Relief

The USA government is one of the main providers of funding in the fight against HIV/AIDS. Funding is provided under the President's Emergency Plan for AIDS Relief (PEPFAR), which is an umbrella organisation for all existing US HIV/AIDS programmes.

Launched in 2003, it is a five-year, $15-billion global plan to combat HIV/AIDS. Of the $15-billion, $9-billion was "new money", $5-billion was to continue existing bilateral agreements and $1-billion was proposed to go towards the Global Fund.

Because the funding had to be passed by Congress, there is political influence in the way money is disbursed. For instance, at least 33% of funding for HIV prevention has to be directed at "abstinence until marriage" programmes. Funding is also skewed towards countries that support the current "war against terror".

Congress required that PEPFAR money is divided as follows:

• 55% for the treatment of individuals with HIV/AIDS (of which 75% between financial years 2006-2008 must be spent on the purchase and distribution of antiretrovirals)
• 15% for the palliative care of individuals with HIV/AIDS
• 20% for HIV/AIDS prevention (of which 33% must be directed at abstinence until marriage programmes)
• 10% for helping orphans and vulnerable children

PEPFAR has been criticised for its policy in only using drugs that do not violate US patent laws. This means PEPFAR-supported programmes are purchasing antiretroviral drugs at much higher prices than other programmes supported by the Global Fund and the World Bank (source).

The programme supports 15 "focus" countries, namely: Botswana, Cote d'Ivoire, Ethiopia, Guyana, Haiti, Kenya, Mozambique, Namibia, Nigeria, Rwanda, South Africa, Tanzania, Uganda, Zambia and Vietnam.

4. The Global Fund

The Global Fund was formally launched in June 2001 to raise resources to fight HIV/AIDS, tuberculosis and malaria, and to direct those resources to areas of greatest need.

The Global Fund receives its funding through public and private contributions, with governments contributing the vast majority of funds (96%), primarily from the G7 and European Commission (85% of government contributions).

The Global Fund attaches no conditions to grants and there are no formal political eligibility guidelines

As of June 2005, $6.1-billion had been pledged to the Global Fund from all sources, of which $3.9-billion had been contributed. After four funding rounds, over $3-billion had been committed to 128 countries for HIV/AIDS, TB, and malaria efforts. The fund estimates about 56% of this funding is for HIV/AIDS.

5. The World Bank

The World Bank Group has supported HIV/AIDS efforts since 1986.

It provides grants and interest-free loans to the world's poorest countries to combat HIV/AIDS, and loans at commercial rates to higher income countries. Interest-free loans are granted via the International Development Association (IDA), one of the five international development agencies that constitute the World Bank Group.

The IDA's funding is derived primarily from contributions from member countries. The G7 provides approximately 70% of member country contributions.

By April 2005, the World Bank had committed a total of $3.5-billion to HIV/AIDS, mainly in the form of IDA ($2.6-billion) and IDRB ($829-million) loans.

6. The United Nations

The United Nations' main activity is to provide technical assistance in the fight against HIV/AIDS. Launched in 1996, UNAIDS controls the HIV/AIDS efforts of numerous United Nations agencies through a central secretariat.

Funding used by United Nations entities comes from both specific HIV-related donor contributions and general contributions by member countries.

The biennial budget for 2006-2007, including all 10 co-sponsors, is expected to reach $2.6-billion, according to the UNAIDS Unified Budget and Workplan 2006-2007.

7. Debt Relief

According to UNAIDS' factsheet on funding:

"More than one third of the world's HIV-positive people — or 14 million — live in countries classified by the World Bank as heavily burdened by debt. In 2002, the 42 poorest and most indebted countries — 34 in sub-Saharan Africa — together owed US$213 billion.

"Reducing the debt burdens of poor countries has the potential to boost the AIDS response where it is most needed. But debt relief cannot play a meaningful role in reducing the funding gap for AIDS unless it is genuinely additional to existing levels of foreign aid."