Conceived and designed the experiments: RA SR EK MB RH. Performed the experiments: SR JS CK KT. Analyzed the data: SR JS CK KT. Wrote the paper: SR RH EK RA.
The authors have declared that no competing interests exist.
Since the early 2000s, aid organizations and developing country governments have invested heavily in AIDS treatment. By 2010, more than five million people began receiving antiretroviral therapy (ART) – yet each year, 2.7 million people are becoming newly infected and another two million are dying without ever having received treatment. As the need for treatment grows without commensurate increase in the amount of available resources, it is critical to assess the health and economic gains being realized from increasingly large investments in ART. This study estimates total program costs and compares them with selected economic benefits of ART, for the current cohort of patients whose treatment is cofinanced by the Global Fund to Fight AIDS, Tuberculosis and Malaria. At end 2011, 3.5 million patients in low and middle income countries will be receiving ART through treatment programs cofinanced by the Global Fund. Using 2009 ART prices and program costs, we estimate that the discounted resource needs required for maintaining this cohort are $14.2 billion for the period 2011–2020. This investment is expected to save 18.5 million life-years and return $12 to $34 billion through increased labor productivity, averted orphan care, and deferred medical treatment for opportunistic infections and end-of-life care. Under alternative assumptions regarding the labor productivity effects of HIV infection, AIDS disease, and ART, the monetary benefits range from 81 percent to 287 percent of program costs over the same period. These results suggest that, in addition to the large health gains generated, the economic benefits of treatment will substantially offset, and likely exceed, program costs within 10 years of investment.
Flows of bilateral and multilateral aid over the past decade, combined with the domestic financial contributions of many countries, have fueled a remarkable scale-up in AIDS treatment and prevention programs in low and middle income countries. Starting with just a few thousand patients in 2002, UNAIDS and WHO report that by the end of 2009 more than five million people were enrolled in antiretroviral therapy (ART) programs in these countries
Several studies have suggested that the intrinsic value of the health gains generated from ART is worth the cost of treatment, thereby arguing for greater investment in ART programs to meet growing treatment needs
To estimate the societal-level economic impact of ART, we analyzed three streams of benefits from AIDS treatment accruing over time to a cohort of patients enrolled on treatment in programs supported by the Global Fund: (1) restored labor productivity amongst workers with AIDS, (2) orphan care expenditures avoided because parents remain alive on ART, and (3) delayed end-of-life care costs associated with death from AIDS. These streams of economic benefits were selected because they offset the cost of treatment over short time horizons and therefore may be especially salient to policy-makers concerned with health budgets, household economic stability and societal-level economic growth. Our model is applied to patients in AIDS programs across low and middle income countries where the Global Fund to Fight AIDS, Tuberculosis and Malaria (Global Fund) cofinances ART, alongside domestic and other external funding. Results should be seen as broadly applicable to national ART programs financed by other international organizations and from domestic public and private sources.
The full cohort of 3.5 million ART patients who participate in treatment programs co-financed by the Global Fund are found across 98 countries (
Parameter | Base Case (source) | Sensitivity analysis |
Patients alive on ART in 2011 | Patient targets of Global Fund-supported ART programs for end 2011 (country-level) |
N/A |
Survival with and without ART | 79.5% survival at 12 months, and 96% for each subsequent year, for all countries |
N/A |
Value of full-time employment of asymptomatic HIV-infected adults | Gross national income per working age person (GNIpwap) |
50% GNIpwap |
Labor productivity of untreated symptomatic HIV/AIDS cases relative to asymptomatic HIV-infected adult | 20% (see |
0%, 40% |
Labor productivity of patients established on ART relative to asymptomatic HIV-infected adult | 75% (see |
60%, 90% |
Fraction of HIV patients that are working age | 90% |
|
Months after starting ART before productivity rebounds | 6 (see |
N/A |
Months of reduced productivity associated with treatment failure under ART | 12 months before death | N/A |
Orphan-years averted per patient-year of ART | Country-specific, varying from 0.32 to 0.76 (average 0.5), computed with |
N/A |
Fraction of orphans needing care and support | Equal to fraction of full population below nationally defined poverty line, which ranged between 25% and 75% (average across Global Fund-supported ART patients: 46%) in the 14 countries with largest numbers of Global Fund-supported ART and support for orphans and vulnerable children |
N/A |
Cost of care for orphans and vulnerable children per orphan-year | $224, based on data from 300 NGOs operating in 7400 sites in sub-Saharan Africa, adjusted for expected economies of scale during program scale-up |
N/A |
End-of-life care of AIDS patients: lifetime cost | $480 in patients without ART |
We first modeled the survival through 2020 of the 3.5 million patients who will be on ART as of 2011 in Global Fund-supported country programs, based on service delivery targets
Survival of newly enrolled and surviving HIV/AIDS patients on ART in Global Fund-supported programs, according to end-2009 grant results and 2010–11 targets of ongoing grants and approved proposals through the 10th round of applications, assuming no additional patient enrolments after 2011. Life years gained is calculated as difference between the ART scenario and a no-ART counterfactual. See
Program-level recurrent costs (of which the Global Fund finances a portion alongside domestic and other donor resources) were estimated by summing the cost of antiretroviral drugs (ARVs), lab`oratory testing and service delivery (personnel, supplies, facilities, etc.). All patients in the cohort have already initiated ART care, so counseling and testing and costs associated with treatment initiation were not included. Country-reported ARV utilization patterns and procurement prices
AIDS has a substantial negative effect on patients' productivity, since many of those who become infected are of prime working age
In contrast, ART rapidly restores physical function and extends life expectancy
These findings are tempered by other evidence. For those who lose their jobs upon falling sick with AIDS prior to initiating treatment, lack of employment opportunities in the local labor market can limit the productivity gains due to ART
UNAIDS estimates that worldwide, only seven percent of HIV cases are in persons aged less than 15 years
Recent longitudinal studies in southern African countries suggest that middle income groups or the relatively wealthier within a country are at a somewhat higher risk of being infected
Based on literature review summarized above (and in
Given the uncertainties surrounding these best available estimates of productivity, we conducted sensitivity analyses using a range of values for the assumed productivity of HIV patients with and without ART that were both higher and lower than base case assumptions. The sensitivity analyses separately address: (a) the possibility that HIV-infected persons would, in the absence of HIV infection, tend to engage in less productive work than country average; (b) the extent to which ART restores an HIV-infected person's productivity to the level achieved prior to onset of symptomatic disease; and (c) the extent to which clinical AIDS and pre-AIDS HIV-associated illness resulting from a lack of ART or a failure to respond to ART reduce an infected person's productivity. We separately considered a scenario in which ART patients leaving the workforce due to AIDS are easily replaced from a stock of unemployed workers, and productivity losses due to AIDS are limited to the transition costs (i.e. recruitment and training) of replacing workers (see
AIDS deaths have orphaned an estimated 16.6 million children by 2009, of whom 90 percent are in sub-Saharan Africa
We computed orphan-years averted by per adult life-year gained due to ART using the Spectrum AIDS Impact Model
The averted cost of orphan care was assumed to be $224 per orphan-year, based on a review of service cost data from 300 non-governmental organizations, covering 7400 sites in 22 countries in sub-Saharan Africa
We assumed that AIDS patients not accessing ART received end of life care over the last 1.5 years before death from AIDS. The cost of this care averaged $480 per patient not accessing ART, based on $49 worth of non-ARV drugs and the country-specific cost of 9.7 inpatient days and 5.5 outpatient days of clinical care
All costs and benefits were discounted at three percent per annum as recommended by the WHO
With (without) discounting, program costs total $14.2 billion ($16.6 billion)
Over the 10-year period, ART for the 3.5 million patient initial cohort saves a cumulative 18.5 million life-years
Annual discounted ART program costs, productivity gains, orphan care costs averted, and net monetary benefits for the cohort of Global Fund-supported patients on treatment as of 2011.
Line Item | Base case, discounted | Base case, undiscounted |
Program cost | $14.2M | $16.6M |
Labor productivity | $31.8M | $37.1M |
Orphan care costs averted | $0.83M | $1.0M |
End-of-life OI treatment costs averted | $1.4M | $1.5M |
Total benefit | $34.0M | $39.6M |
Net benefit | $19.8M | $23.0M |
Benefit/cost | 240% | 239% |
Productivity gains follow the trend in patients surviving on ART, reaching a maximum in 2012, about a year after the peak in total number of patients on ART in 2011. Across the Global Fund-supported patient cohort, the value of increased labor productivity reaches $3.8 billion per year in 2012, and gradually declines to $2.5 billion per year by 2020 (
The value of averted orphan care increases over time, in direct proportion to the number of life-years added each year for patients receiving ART, as can be seen in
In our base case, the estimated net benefit – the difference between estimated economic benefits and ART program cost – is positive, amounting to $19.8 billion, while the gross benefit ($34.2 billion) equals 240 percent of the program cost over the study period. The benefit-cost ratio was not sensitive to discounting (
In
|
|
|||
90% | 75% | 60% | ||
20% | Benefit | $40.7 |
|
$27.3 |
20% | Net Benefit | $26.5 |
|
$13.1 |
20% | Benefit/cost | 287% |
|
192% |
40% | Benefit | $38.9 | $32.2 | $25.5 |
40% | Net Benefit | $24.8 | $18.0 | $11.3 |
40% | Benefit/cost | 275% | 227% | 180% |
|
|
|||
90% | 75% | 60% | ||
20% | Benefit | $20.3 | $16.9 | $13.6 |
20% | Net Benefit | $6.1 | $2.7 | −$0.6 |
20% | Benefit/cost | 143% | 119% | 96% |
40% | Benefit | $18.2 | $14.9 | $11.5 |
40% | Net Benefit | $4.1 | $0.7 | −$2.6 |
40% | Benefit/cost | 129% | 105% | 81% |
If patient retention in ART programs were lower than in the base case, both program costs and benefits are reduced and the benefit-cost ratio declines modestly from 240 percent to 226 percent (
Our analysis focuses on the valuation of economic benefits and related costs that accrue from maintaining current patients in ART programs being cofinanced by the Global Fund and a range of other complementary domestic and external sources. Though considerable uncertainty remains, and impact at the level of individual countries may vary substantially, we find that the monetary value of productivity gains, orphan care and end-of-life AIDS care costs averted or delayed are likely to exceed ART program costs.
We estimated the economic returns of the ART programs by comparing them to a ‘null scenario’ in which such a treatment effort does not exist
Our findings provide evidence that large scale ART in low and middle income countries yields a stream of economic benefits that is likely to offset substantially or exceed the costs of delivering AIDS treatment to millions of patients in these countries. With the Global Fund currently supporting on average about a quarter of the program-level costs of ART across the 98 country programs
Costs and benefits accrue to a range of stakeholders. Our analysis included the full cost of ART paid for by a combination of donor funds, domestic government revenue, and direct payments of patients or (in rare cases) private insurers. Increased economic productivity directly benefits patient households. The national government also experiences a follow-on benefit from patients returning to work, in the form of increased taxes collected on incomes and other economic activity (e.g. sales taxes), which our analysis did not incorporate. The presented cost savings on orphan care and end-of-life AIDS care are shared between households of patients and their relations and national governments.
In our model, productivity gains from ART increase proportionally with per capita GNI. Although treatment costs are also correlated with GNI, per-patient net benefits are lower for countries with weaker economies or where HIV is concentrated in socioeconomically marginalized subpopulations. While our analysis makes adjustments wherever possible for country-level variation, for many parameters in our model only regional estimates were available. Therefore, we report only aggregate results.
Our findings demonstrate the value of maintaining the current cohort of patients on ART, as we do not estimate economic returns to a further scale up of ART services. Such actions are likely to have favorable benefit-cost profiles, but their exact value will depend on many additional factors that our analysis did not have the capacity to consider. For example, evidence suggests that more productive members of society are more likely to access ART when coverage is low, because of their relatively greater resources, knowledge, and proximity to services
Our estimates of ART program cost, particularly for service delivery and for orphan care, are limited by shortcomings in the available data. In some cases, it was necessary to adapt findings from studies in a subset of countries to our whole sample. While we used reasonable methods for doing so, only the collection of country-specific data will enable us to refine this analysis of ART's economic impact to the point where precise estimates for individual countries can be generated. Recently established routine tracking of national program expenditures will in the future generate useful data on country variations and time trends in per-patient and program-level costs of ART and other services
Future disaggregation of patient retention and productivity effects by gender could also sharpen these estimates of economic returns. As ART coverage is slightly higher in women than in men but labor force participation and wages tend to be lower, gender disaggregation could be expected to lower the estimated benefits somewhat. However, the impact of ART on non-monetized activities disproportionately performed by women in the household and informal sector – which are not captured in our analysis – is likely to be substantial.
Our assessment of the benefits of ART presented here should be taken as a first approximation of the magnitude of the economic returns to investments in AIDS treatment. While productivity gains, orphan benefits, and cost offsets within clinical HIV care are the most tangible returns on investment that policy-makers may consider when evaluating the affordability of ART programs in the future, these benefit streams capture only a fraction of wider economic, social and health benefits from AIDS therapy. Accounting for second-order negative economic effects of AIDS that may be mitigated by ART, such as a slowing of economic growth due to reduced savings and investment, erosion of human capital, and lower expected lifetime earnings of children who must miss school to care for, or replace the earnings of, a sick parent, would increase the economic benefits we have estimated here.
Economists have attempted to capture these second-order effects and measure the impact of AIDS on economic growth using macroeconomic approaches that simulate the entire economy of a country in computable general equilibrium models. These studies suggest that, in the absence of effective treatment, substantial productivity losses – on the order of a one percent reduction in gross domestic product (GDP) growth per year – could occur in countries with generalized HIV epidemics
Our analysis, like these macroeconomic modeling approaches, does not attempt to measure the full social welfare impact of ART. Such an exercise would likely show that benefits derived from ART are greater than the productivity gains and cost offsets in orphan and end-of-life care
Despite the restriction of our analysis to a set of first-order economic benefits, the findings presented in this paper underscore the value to low and middle income countries and their external partners of continuing funding for AIDS treatment programs, beyond the moral and social arguments that many have advanced. Progress in delivering high-quality treatment services more efficiently over the next few years, thereby lowering the average cost per patient-year of ART, will help to further raise the benefit-cost balance and thus the economic rationale for investing in this area.
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The authors wish to thank Gabrielle Partridge, Results for Development Institute, for her contributions to data collection and project coordination, and Toby Kasper and four anonymous reviewers for comments on earlier drafts of the paper.