‘It would simply be too expensive…’

  True, anti-retroviral drugs are currently expensive, particularly taken in context with other health priorities in the developing world.  However, no one is expecting that poorer countries will have to pay the premium prices that drug companies charge in the North in order to recoup their research & development costs. 

  One reason why the drugs are so expensive here is that there is such a relatively small and captive market.  However, once you multiply this up to global levels, simple competition and market differentiation will drive prices right down.  This is already happening, with generic drug manufacturers, such as Cipla in India, now able to offer a year’s full treatment with HAART for as little as $350, a mere fraction of the average cost in the North.  It is almost inevitable that prices will fall to very near marginal costs of production in a year or so, with brand name drugs and generic drugs ending up costing about the same.

  The estimates often quoted by those who dismiss the possibility of HAART are often wildly inaccurate, with costs of over $1000 per year sometimes quoted.  These figures are then multiplied by >30 million erroneously assuming that one would try and treat nearly the whole world’s HIV population.  In reality, it would only make clinical and logistical sense to aim to treat around 10% or 3 million, i.e. those with Grade 4 AIDS or about one year left to live (see below).

  Using these corrected figures, and accounting for the additional costs of distribution, programme infrastructure, training, research and evaluation, diagnostics and a salvage regime, it is now estimated that the total annual costs of treating all those in the world that require it would be in the order of $3.7 billion.

  This may sound like a lot of money and it is, way beyond the means of most countries in the south.  However, in global terms it is quite affordable, amounting to only 0.015% of the economic output of the potential donor economies. Compare this with the amount the West spends each year on agricultural subsidies, which is more than the entire GNP of all the countries in Sub-Saharan Africa put together!

  Yet, when Kofi Annan, General Secretary to the UN, asked the world’s richer countries this year to donate between $7-10 bn to a Global Trust Fund to tackle AIDS (including education, prevention and other measures), a mere $700 million was committed, much of which was reallocated from previous development budgets.  Uganda even committed more ($2m) to the new fund than Germany (zero)!