AIDS2031 LONG TERM COSTS AND FINANCING FOR HIV/AIDS ICAAP 12 AUGUST 2009 BALI INDONESIA Farzana Muhib, Results for Development Institute

Overview  Main findings of the Cost and Financing Working Group  Global estimates  Regional estimates for Asia  Cambodia case study

aids2031 Costs and Financing – main objectives Globally and through two country case studies: 1. Estimate the long-term costs of AIDS, using a range of distinct scenarios 2. Make recommendations in setting priorities for resource allocation, based on evidence of intervention and program cost-effectiveness 3. Construct and evaluate financing scenarios that are adequate, equitable, predictable, and sustainable 4. Encourage global and national dialogue – promote positive policies that will result in financing a successful long-run AIDS response at the lowest possible cost.

Main findings – our current top 5 1. Global AIDS funding needs will continue to grow rapidly – Asia will account for one-third, treatment over a fifth, of future spending 2. Cost trajectory changed with action today. Policy choices lead to different price tags for 2031 – $19 to $38 billion annually(globally) 3. With our current intervention tool kit, epidemic attenuated but not extinguished – nearly one million infections in Technological and/or behavioral game changers needed. 4. Huge scope for spending better – technical efficiency gains potentially large but hard to realize, allocative efficiencies increasingly clear but politically difficult. We must fix both, starting with allocations.. 5. Sustained long-term financing for AIDS in serious jeopardy, especially for HP/LIC, but even for some HP/MICs – domestic capacity limited and donor prospects uncertain. Low prevalence, middle income countries may rapidly move to self-financing

 Four scenarios  Policy choices today have very different price tags in the future  Huge variance in the price tags  Treatment = 25%+ Resource needs estimates

 1 million + infections under the best scenarios- unless we have a vaccine, a cure, or a social/sexual revolution Impact on incidence

Availability of Donor Financing  A gap still exists in both the pessimistic and optimistic scenarios  This gap would need to be filled, but by who? Projections of GDP growth= 2% Potential funding from OECD countries Pessimistic --No change in ODA as share of GDP (0.25%)US$ billions Total ODA Donor assistance for HIV/AIDS6811 Global Resource Needs for AIDS (rapid scale up) GAP in Funding41927 Optimistic -- Donors increase ODA to 0.7% of GDP Total ODA Donor assistance for HIV/AIDS62230 Global Resource Needs for AIDS (rapid scale up) Gap in Funding4 58

Resource needs and impact in Asia

Current funding in Asia

Potential sources of funding for Asia Potential ODA from BRIC countries in 2015 and Pessimistic --No change in ODA as share of GDP (0.25%) US$ billions Total ODA* Donor assistance for HIV/AIDS Optimistic -- Donors increase ODA to 0.7% of GDP Total ODA Donor assistance for HIV/AIDS *World Bank, Global Economic Prospects Group BRIC countries start to donate, they will reduce the gap. Specific regional preferences may influence the distribution of ODA from these countries Philanthropists may play an increasing role in funding AIDS programs. 28 of 40 youngest billionaires reside in Asia

 Sustained long-term financing is in serious jeopardy but the picture in Asia is not so bleak  Low prevalence, middle income countries could self- finance, without donors Potential for Domestic Financing of AIDS in Asia

Our case studies South Africa: 5.7 million HIV+ (18% prevalence), 350K deaths, $1-2 billion annual spending Cambodia: ~ 1% prevalence, high treatment coverage, $44 million annual spending (2006) GeneralizedConcentrated Middle South Africa Botswana Ukraine Brazil Low Zambia Malawi Cambodia Senegal Epidemic Type Income

Currently Available and Needed Resources for Cambodia Millions US$

Cambodia case study objectives  How much will it cost to address the epidemic in the future?  Model 4 scenarios- modifying them to fit the epidemic pattern in Cambodia.  Key questions to consider: What are hard choices? What is structural change? How will the epidemic change?  How to mobilize domestic/external, public/private resources for a sustained response?  Donor mapping exercise to determine current levels of funding  Fiscal space analysis – How much can we reasonably ask govts to contribute in the future?  Stimulating dialogue and search for improved national policies

What we can do today in Asia?  Policy choices impact the ultimate price tag $4-14B Asia  New/better prevention approaches are needed  Consider a focus on the hard choices of cost effective interventions  Focus on Most at Risk Populations  Evaluate impact of prevention interventions  Start to develop sustainable funding mechanisms  Expand portfolio of funders  Domestic funding of HIV/AIDS programs

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