The AIDS Fund Fight

The AIDS Fund Fight

Behind closed doors at the UN and in Western capitals, government and corporate officials are arguing over the size and governance of a fund that is going to be the primary international response to the greatest public health pandemic since the Black Death.


Behind closed doors at the UN and in Western capitals, government and corporate officials are arguing over the size and governance of a fund that is going to be the primary international response to the greatest public health pandemic since the Black Death. Virtually alone among world leaders, UN Secretary General Kofi Annan has recognized the severity of the AIDS crisis. While pushing developing-country governments to confront the disease openly and devote more money to HIV/AIDS and healthcare in general, he has called on the rich countries to allocate $7 billion to $10 billion annually to a global fund to address infectious diseases–primarily HIV/AIDS, malaria and tuberculosis–in developing countries.

But an eloquent plea from the Secretary General guarantees neither that the rich countries will provide the needed resources nor that the fund will be structured wisely. The opaque and ad hoc process by which the fund is being negotiated into existence–with a swirl of rumors, whispers and back-room intrigue driving the process forward–makes the final outcome uncertain.

The fund will be high on the agenda at both the UN General Assembly special session on AIDS and a meeting of the G-8–the rich countries’ club–in Genoa, Italy, in July. UNAIDS executive director Peter Piot says the fund should be operational by the end of the year.

Among the key questions likely to be resolved or nearly resolved by July:

§ How much money will be in the fund? The United States was first to announce its contribution: $200 million for the fund’s first year (a level of funding that, if maintained for ten years, would represent less than two-tenths of 1 percent of the Bush tax cut). In its rush to be first, the United States set the donor bar low. Most observers now expect the fund to begin operations with about $1 billion or less per year.

§ How will the fund be governed? It seems clear that donors will exert a decisive role on the fund’s governing board, and it’s probable that the fund will be independent of, although allied with, the United Nations. Whether and to what extent developing-country governments, nongovernmental groups and people with HIV/AIDS will participate in fund governance remains up for grabs. The fund is likely to be housed at the World Bank, though it’s uncertain whether the bank will gain substantial influence over policy or whether the bank’s role will be primarily administrative.

§ Will drug companies be permitted a role in governance of the fund? Activists are aghast at the prospect that the very same brand-name drug companies that have maintained super-high prices for antiretroviral drugs, and drugs to treat opportunistic infections, might serve on the fund’s governing board. But amid the rush to develop the fund as a "public-private" partnership and mindless recitation of the mantra that the multinational firms must be "part of the solution," it now appears likely that the drug companies will have a role in fund governance. (All donors, public and private, over a certain threshold are likely to have governing board representation.)

§ Will the fund support a balanced program of prevention and treatment, or will it focus only on prevention? Prevention advocates, including some international AIDS service organizations and the Gates Foundation (which pledged $100 million to the fund), fear that media attention on drug pricing and access to treatment will draw resources away from vital prevention investments. Unfortunately, bad-faith actors often echo prevention arguments to rationalize antitreatment positions based either on ignorance and racism or a desire to divert attention from drug-pricing issues.

Treatment advocates, including activists around the world, Doctors Without Borders and a coterie of Harvard professors led by Jeffrey Sachs, argue that while much more must be done on prevention, failure to also devote resources to treatment means that almost all of the 30 million HIV-positive people in the developing world will die of a treatable disease. A narrow prevention focus also ignores the ways that treatment is intertwined with prevention: Most important, the possibility of receiving lifesaving medicines gives people an incentive to get tested for HIV, and then to modify behaviors. Right now, it appears the fund will focus on prevention.

§ To the extent that the fund purchases drugs, will it buy exclusively from the brand-name manufacturers, or will it permit low-cost generics to bid for contracts? Even after a series of reluctant and not universally available price reductions for poor countries, the lowest-priced antiretroviral drug combinations from the multinationals are about three times the cost of the dollar-a-day versions offered by generic companies like the Indian manufacturer Cipla. A decision to permit generics to bid on procurement contracts will institutionalize market competition and drive prices, including those of new drugs, steadily downward. Exclusion of generics will help consolidate the brand-name cartel and result in substantial waste of fund resources.

Tragically, Kofi Annan’s grand vision may well be giving way to a modest resource mobilization and potentially flawed institutional arrangement. Perhaps what takes shape will be just the beginning, but it is also possible that the present political momentum to do something about HIV/AIDS will be lost once the fund is created.

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Katrina vanden Heuvel
Editorial Director and Publisher, The Nation

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