President's Emergency Plan For Aids Relief:
Per-Patient Costs Have Declined Substantially, but Better Cost Data Would Help Efforts to Expand Treatment
GAO-13-345: Published: Mar 15, 2013. Publicly Released: Apr 15, 2013.
What GAO Found
The Department of State's (State) Office of the U.S. Global AIDS Coordinator (OGAC) has reported that per-patient treatment costs declined from about $1,053 to $339 from 2005 to 2011. Purchasing generic antiretroviral (ARV) drugs, together with declining drug prices, has led to substantial savings. OGAC estimates that the President's Emergency Plan for AIDS Relief (PEPFAR) has saved $934 million since fiscal year 2005 by buying generic instead of branded products. PEPFAR's analyses of data from eight country treatment-cost studies indicate that per-patient costs also declined as programs realized economies of scale while taking on new patients. Furthermore, the analyses suggest that costs decreased as countries' treatment programs matured, particularly in the first year after programs expanded, and reduced one-time investments. Per-patient cost savings have facilitated substantial increases in the number of people on ARV treatment. In September 2012, an estimated 8 million were on treatment in lowand middle-income countries, of which PEPFAR directly supported 5.1 million-- an increase of 125 percent since 2008, the year the program was reauthorized.
Despite substantial declines in per-patient treatment costs, it is important that countries continue to improve the efficiency of their programs to expand to meet the needs of the estimated 23 million people eligible for ARV treatment under recent international guidelines. PEPFAR's cost estimation and expenditure analysis approaches provide complementary information that can help partner countries expand treatment and identify potential cost savings. However, as currently applied, these approaches do not capture the full costs of treatment. Cost estimation provides in-depth information, but data are limited because detailed cost studies have been done in only eight partner countries, at a small number of sites. Moreover, although treatment programs are changing rapidly, key data for most of the studies are no longer timely, since they were collected in 2006 and 2007. PEPFAR does not have a plan for systematically conducting or repeating cost studies in partner countries. Data from expenditure analyses, while more timely, are limited because they do not include non-PEPFAR costs. Without more timely and comprehensive information on treatment costs, PEFPAR may be missing opportunities to identify potential savings, which are critical for expanding HIV treatment programs to those in need.
Using an OGAC-developed budgetary formula, PEPFAR has met the legislative requirement that more than half of its funds be spent each year to provide specific treatment and care services for people living with HIV. From fiscal year 2008 to fiscal year 2012, PEPFAR funds allocated to capacity building--to strengthen health systems, laboratory capacity, and strategic information systems--increased from 15 percent to 21 percent of PEPFAR's total funds to support country programs. However, the current formula does not include the capacity building funds. These funds--which support PEPFAR country teams' efforts to meet another legislative goal of promoting sustainable country-owned programs--and other PEPFAR activities also contribute to HIV treatment and care services. PEPFAR does not currently have a methodology to account for those contributions. Without such a methodology, it is not possible to determine the full amount of PEPFAR funds that are allocated to support the HIV treatment and care services identified in the spending requirement. However, the treatment spending requirement expires at the end of September 2013.
Why GAO Did This Study
Through PEPFAR--first authorized in 2003--the United States has supported major advances in HIV/AIDS treatment, care, and prevention in more than 30 countries, including directly supporting treatment for almost 5.1 million people. However, millions more people still need treatment. Congress reauthorized PEPFAR in 2008--authorizing up to $48 billion over 5 years--making it a major policy goal to help partner countries develop independent, sustainable HIV programs. Congress also set spending and treatment targets. OGAC leads PEPFAR by allocating funding and providing guidance to implementing agencies. As requested GAO reviewed PEPFAR-supported treatment programs. GAO examined (1) how perpatient treatment costs have changed and affected program implementation, (2) how PEPFAR cost information supports efforts to expand treatment, and (3) how PEPFAR has met a legislated treatment spending requirement. GAO reviewed cost analyses and reports and analyzed ARV drug data relating to fiscal years 2005 through 2011; conducted fieldwork in three countries selected on the basis of program size and other factors; and interviewed PEPFAR officials and implementing partners.
What GAO Recommends
GAO recommends that State develop a plan for (1) expanding the use of indepth cost studies to additional countries and sites, where appropriate, and (2) broadening expenditure analysis to include non-PEPFAR costs, as feasible. State generally agreed with the report's recommendations.
Recommendations for Executive Action
Comments: In a letter to Congress after the report's issuance, State reiterated that it concurred with the intent of this recommendation and in September 2015 provided updated information on what the Office of the Global AIDS Coordinator and implementing agencies have begun doing to address the recommendation. According to an official from this Office, PEPFAR has planned a small number of stand alone cost studies in several countries to examine the cost of treatment, and in some cases, the cost of adherence to treatment, and has integrated an economic evaluation component in several other PEPFAR-funded studies that look more broadly at the cost of HIV/AIDS interventions in certain vulnerable populations.
Recommendation: To improve PEPFAR's ability to help countries expand their HIV treatment programs to address unmet need, and do so through the efficient allocation of resources and effective program planning, the Secretary of State should direct PEPFAR to develop a plan to systematically expand the use of country treatment-cost studies to additional sites and partner countries, where it is cost-effective to do so, to help estimate costs and examine country-specific characteristics of comprehensive HIV treatment that may result in cost savings.
Agency Affected: Department of State
Comments: In a letter to Congress after the report's issuance, State reiterated that it concurred with the intent of this recommendation and in September 2015 provided updated information on what the Office of the Global AIDS Coordinator and implementing agencies have begun doing to address the recommendation. According to an official from this Office, PEPFAR has worked to lay the foundation for joint expenditure analysis across funding sources in a number of partner countries and launched a pilot of this approach in South Africa that brought together PEPFAR expenditure analysis data with data from the Global Fund to Fight AIDS, Tuberculosis and Malaria and host country public finance data to determine the total contribution of each source to HIV program activities. He said the final results are still pending and that substantial amounts of time, effort, and dedicated personnel are required to map and link data from these different sources and ensure the data are coded accurately. He said PEPFAR will launch one to three additional pilots in 2015 to further refine the approach and determine how this harmonization can be scaled rapidly in the future.
Recommendation: To improve PEPFAR's ability to help countries expand their HIV treatment programs to address unmet need, and do so through the efficient allocation of resources and effective program planning, the Secretary of State should direct PEPFAR to develop a plan to work with partner countries, where feasible, to broaden PEPFAR's expenditure analysis to capture treatment costs across all partners that support each country program and develop more timely information on the full costs of comprehensive HIV treatment.
Agency Affected: Department of State