Global Policy Forum

HIV/AIDS: New Ways to Fund the Fight

While global HIV/AIDS funding is stagnant, the number of treatments is rising. Several African countries have increased their domestic HIV/AIDS investment, which exceeded international investment for the first time ever in 2011. As an alternative to donor support, many governments favor innovating financing mechanisms such as income tax, a levy on the use of mobile phones, and a “sin tax” on alcohol and tobacco to fund the HIV/AIDS programs.
25 July 2012

While global HIV funding has stayed flat in recent years, poorer countries have quietly been putting more of their own money into financing the HIV response. "Something very interesting has been happening" in Africa, Bernhard Schwartländer, director of strategy at UNAIDS told a plenary session at the 19th International AIDS Conference in Washington DC.

Treatment numbers are rising despite stagnant funding. "A lot of very clever and dedicated people are working very hard in making sure that services are delivered more efficiently, and… more people receive HIV services with the same amount of money."

Domestic spending on HIV/AIDS in several African countries, including Kenya, Namibia, Sierra Leone and Uganda, rose by more than 100 percent between 2006 and 2011. For the first time ever, domestic resources exceed international AIDS spending as national governments take on the challenge of redistributing resources, UNAIDS noted.

But the reality is that national AIDS programmes have expanded beyond the capacity of governments to fully support them. If Malawi, for instance, took on the financing of its antiretroviral (ARV) programme - currently funded entirely by the Global Fund to fight AIDS, Tuberculosis (TB) and Malaria - this would consume two-thirds of its overall health budget, said Sharonann Lynch, policy advisor at international health charity Médecins Sans Frontières (MSF).

Poorer governments are still largely dependent on global resources. "The lives of 80 percent of the people who receive AIDS treatment in Africa depend every day, every morning, on whether or not the donor writes another cheque. That is unacceptable - such dependency simply must end," said Schwartländer.

New sources of income

As an alternative to donor support, innovative financing mechanisms to bridge the funding gap are gaining increasing support from governments. Zimbabwe’s AIDS levy - a 3 percent income tax - generated more than US$26 million in 2011, UNAIDS reported recently. However, Albert Manenji, finance director of Zimbabwe's National AIDS Council, told IRIN/PlusNews that only 30 percent of Zimbabweans were in the formal sector and contributed to the levy, so they are looking at broadening the revenue base to include small businesses and the informal sector.

Rwanda and Uganda have begun to impose a levy on the use of mobile phones to fund health programmes, and Botswana, Gabon and Malawi, among others, are investigating such a levy specifically for AIDS financing.

Imposing a "sin tax" on alcohol and tobacco to pay for universal access to ARVs could be one of the most ambitious taxes to be implemented. 

Modelling by Liverpool University researchers based on the 20 countries with the highest HIV burden suggests that 10 of these countries, including South Africa, Botswana and Malawi, could fully fund universal access over the coming years if governments put a small "global health charge" on alcohol and cigarettes.

Andrew Hill, a research fellow at Liverpool University, said the proposed tax would also generate "substantial additional funds to treat malaria, tuberculosis and other diseases". Raising taxes could also deter the use of cigarettes and alcohol, lowering the burden of non-communicable diseases linked to smoking and drinking.

The idea of a "sin tax" has long been popular in developed countries, and now the "fat tax", a levy on sugary drinks and other foodstuffs associated with obesity, is also growing in momentum. But Hill admitted that enforcing these taxes in poorer countries would be difficult.

Schwartländer also suggested that the recent fines imposed on large pharmaceutical firms could be set aside for health assistance, "rather than disappear in the general coffers of those countries".

In July 2012, British drugmaker GlaxoSmithKline pleaded guilty to criminal charges and agreed to pay $3 billion in fines for promoting its best-selling antidepressants for unapproved uses, and failing to report safety data about a top diabetes drug.

Schwartländer pointed out that "three billion dollars could easily pay for a year of drugs for all those on treatment today".


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