1. Financing HIV/Aids in South Africa and role of major donors Meeting to inform Council for Foreign Relations January 2010 Mark Blecher National Treasury Keith Cloete WC DOH

2. 2 Scale of problem SA has largest number of HIV infected persons in world >5m Largest number of persons on treatment Number of persons on treatment growing rapidly – will exceed 400 000 pa in 10/11 Soon to exceed 1 mil on treatment but this will grow to over 3 million 400 000 new infections pa with prevention programmes not sufficiently effective Highest spending of any country on HIV ….but this will need to triple over time Huge implications for struggling health services

3. 3 HIV costing NSP costing suggested scenarios of R11b-R13b per annum by 2011 New draft costing by aids2031 suggest costs could reach R40 billion by 2030 This includes other sectors and private – but amounts are huge – could rise from 18% to 40% of health budget And these don’t fully factor costs of lower treatment threshold of cd4 350 Need to continue to strive to reduce unit costs

4. 4 NSP: Summarized total costs for the low cost scenarios (million Rands, 2005/06 prices)

5. Aids 2031 Draft scenario

7. Projected growth in number of ART patients if 80% target is met (Dorrington)

8. Financing Both graphs (cost and number of arvs) level off Once level off govt can fully carry costs However period from 2010 to 2015 is one of v rapid scale-up Esp given lower treatment thresholds, move to 80% coverage, improved prevention …..and many other health sector issues and priorities Require >R2bil new funds annually during scale-up Difficult to sustain this level of scale-up and simultaneously replace existing donor funding 8

9. Some major financing streams 09/10 approximate 9

10. Two broad positions of donors 1) Middle income countries must look after themselves or 2) Very high burden of disease middle income countries merit support We support second option. SA has little need for donors beyond HIV, but the HIV problem is very large and difficult Sustainable as govt will take over funding as treatment numbers start stabilising Govt has sought partnership with major donors eg PEPFAR and Global Fund 10

11. Major donors Pepfar and Global Fund have played major role in SA Especially helped to build capacity through supporting govt treatment points Supported large numbers of worthy projects Amounts are large and partnership is valuable Donors potentially bring technical expertise, flexibility, support 11

12. Problem areas Value for money huge amounts being spent – are we getting best value – we may have sufficient funds if we optimally used the combined pool Weak coordination between provincial and donor funded services Fragmentation between large numbers of organisations poorly coordinated Difficulty aligning services and funding coming via multiple routes Difficulty allocating tasks and funding around a common plan 12

13. Potential improvements Build shared commitment around common plan and agreement on division of work –responsibilities, services and funding Funding on budget (WC Global Fund) worked v well Would be good to develop a five year plan and clear partnership (there is huge amount to do – scale up to 3 m on Rx) 13

14. Western Cape case study

15. Scenarios for uptake of ART in the Western Cape Province (assuming guideline change for ART eligibility to 350 cells/µl) Current financial year

16. Background The Current (Expiring) Western Cape GF Grant Programme –R–Round 3 (originally 5-year grant) –S–Sub-CCM: Western Cape Provincial AIDS Council Title: Strengthening & Expanding the Western Cape HIV/AIDS Prevention, Treatment & Care Programme Four Objectives in the Grant Programme 1.ARV treatment services 2.Peer education HIV prevention intervention in selected secondary schools 3.Palliative care services 4.Community Based Response (small grants programme to local CBOs/NGOs) Special circumstances of Western Cape Phase 2 Grant Programme –4–4-year Phase 2 period in respect of Objectives 1 & 3 in order to provide for a Grant exit strategy (funding ends June 2010) –3–3-year Phase 2 period in respect of Objectives 2 & 4 (funding ended June 2009)

17. ARV Treatment Services – Western Cape Costing Model –Revised normative staffing model for medical, nursing, pharmacy, clerical & adherence support (NGO) staff Task shifting/sharing First year’s treatment norms vs norms for subsequent years 2009 public service salary scales + 7% inflator p.a. –Revised model for patients on first & second line ARV treatment All patients start on first line Average of 0.2% per month changed to second line –Average ARV medicine cost/patient In 2009: First line: R215 p.m.; Second line: R642 p.m. Constant unit cost/patient over RCC period –Lab tests (NHLS): CD4 Count & Viral Load 6 monthly tests per patient (ART Protocol) Average 5% p.a. inflator over RCC period

18. W CAPE RCC PROPOSAL DEVELOPMENT Addressing Long Term Financial Sustainability –Government’s ability to meet the funding requirements of the Western Cape HIV/AIDS Programme (from own revenue sources) has been seriously affected by the global economic downturn since 2008. –Problem is likely to persist over the coming MTEF period, followed by economic & fiscal recovery. –RCC Proposal is therefore structured in order to: Request maximum possible Grant funding for Years 7 – 9 Followed by incremental transfer of Grant Programme activities to government funding sources in Years 10 – 12

19. Conclusion HIV treatment and prevention will need to scale up massively over next 5 -10 years This has huge cost implications – spending doubling to tripling However ultimately sustainable as numbers and costs level off Partnership and support will be valuable during this period of rapid scale-up There are many advantages to developing an improved partnership arrangement over next 5+ years We value support that has been given and would hope to see an ongoing and strengthened partnership for next 5 years 19