**PRESS BRIEFING**

**THE GLOBAL FUND TO FIGHT AIDS, TB AND MALARIA**

**October 3, 2002**

Participants: Scott Evertz, U.S. Department of Health and Human Services

> Dr. Anne Peterson, U.S. Agency for International Development

Moderator: Good afternoon. Thanks for joining us this afternoon. We're
doing a briefing on the Global Fund to Fight HIV/AIDS, TB, and Malaria.
We wanted to give you a little bit of background before next week's
Global Fund meeting in Geneva. We have two U.S. government officials,
who will be speaking today, Dr. Anne Peterson, the Assistant
Administrator for Global Health at USAID, and Scott Everetz, who is the
Special Advisor to Secretary Thompson for the Global Fund at the
Department of Health and Human Services. We will start with Mr. Everetz,
then Dr. Peterson, and then we'll open up it up for questions.

Mr. Evertz Very good. Good afternoon. This is Scott Everetz. I currently
serve as Senior Advisor to Secretary Thompson for the Global Fund to
Fight AIDS, TB and Malaria. As you may know, Secretary Thompson is the
board member representing the United States on the Global Fund.

Let me recap, with a little bit of background on how the Fund was
created, some of which you'll know, some you won't, and the expectations
that we have for the Fund. According to estimates published last year in
the Journal Science, \$7 billion to \$10 billion was needed annually in
the developing world to prevent new HIV infections, care for people
living with HIV and AIDS, and provide limited treatment with
anti-retroviral drugs. In addition to these costs, it's been estimated
that an additional \$2 billion is needed to address TB and Malaria each
year.

> These estimates include funding from all sources, including national,
> bilateral, and multi-lateral programs. The creation of the Global Fund
> was meant to serve as the catalyst for the generation of additional
> funds and to complement already existing sources. I'd really like to
> underline that point in my opening comments. The Global Fund has
> always been viewed as complementary to existing resources. UNAIDS,
> donor nations, non-governmental organization, and host countries all
> play a valuable role in the fight against these three diseases.

The Fund can only work if it complements already existing entities. As
we have been charged with doing, we hear often, and we pledge to do, we
will not rob Peter to pay Paul. As countries provide support to the
Global Fund, we will not do that and we challenge others not to do that
as well. They must also continue to fund ongoing bilateral, national,
and multi-lateral programs.

> I'd also like to stress that this is not a UN fund, although Kofi
> Annan was instrumental in calling the world's attention to the need
> for additional funding to fight these diseases. The fund is an
> independent entity, designed to encourage new funding, and governed by
> an 18-member board. This is a unique public private partnership that
> is driven by individual country need and is focused on results.

To put in context the U.S. contribution to the Global Fund, I want to
remind you of the U.S. support for HIV AIDS outside the Fund. This year
the United States budget for fighting global AIDS is \$1.17 billion.
This includes \$540 million for USAID's bilateral program and \$377
million for the Department of Health and Human Services, including \$155
million for CDC and \$220 million for NIH.

Aside from our bilateral AIDS programs and our research agenda, the U.S.
has also been at the forefront in contributions to the Global Fund.
President Bush, as you know, is the first leader to pledge to the Global
Fund in May of 2001, when the Fund, in fact, did not even exist. The
U.S. has made a second pledge, bringing our total to \$500 million. The
U.S. is the first donor to the Fund, is the largest donor to the Fund,
and is one of only two donors to make a second pledge to the Fund. We
obviously encourage more.

Two hundred and seventy five million dollars of our pledge is already in
the Fund's bank account. This is approximately half of the actual
contributions received, dollars received versus pledges made. In
addition, the U.S. provided a million dollars to assist the Fund in
starting up its operations and loaned the Fund staff and technical
support to help get it off the ground.

> The U.S. has also been involved at a staff level on all of the Fund's
> technical area working group. The U.S. is the only nation that is
> increasing its bilateral funding, as it increases its pledges to the
> Fund. Again, we challenge others to follow suit. We are excited and
> pleased to be able to attend the board meeting next week in Geneva,
> and we'll look forward to reporting out very positive results from
> that meeting. Thank you.

Dr. Peterson Good afternoon. I'm Dr. Anne Peterson. I'm the Assistant
Administrator for Global Health at USAID, and I'm an alternate U.S.
board member to the Fund. We are getting ready for next week's board
meeting that will be taking place in Geneva, Thursday and Friday,
October 10^th^ and 11^th^. We are pleased with the progress the Fund has
made. It's gone from idea to action, in under one year. This is really
extraordinary for the establishment of any board, especially a high
level, philosophically diverse, international board like the Global
Fund.

The first board meeting was in January of this year, when it became a
real entity, and the Fund issued a call for proposals shortly after
that. Already, at the second board meeting in April, we reviewed the
first round of proposals and approved 58 proposals in 38 countries for
funding valued at \$616 million over two years. You know at that
meeting, Dr. Richard Feacham was selected as the Executive Director of
the Fund. Next week's meeting in Geneva is the third board meeting, and
it will focus on a number of policy decisions.

Let me just discuss briefly what's on that agenda. The Fund Secretariat
will present the board with a resource mobilization plan, which will
affect how the Fund will fit into the global fight against these three
diseases, and the amount of resources that the Fund thinks it will be
part of in the global initiative for resourcing the fight against these
three diseases. This will give Dr. Feacham a key blueprint to go forward
and determine the best means to mobilize resources for the Fund and to
leverage the resources that have already been pledged and already given
to the Fund.

We do expect that the first disbursements for the first grant recipients
will be made about the time of that board meeting. While some have been
concerned that the Fund has moved too slowly, the timeframes established
for the Fund were really extraordinarily fast and I often said that they
were outrageously ambitious timeframes. We are pleased that they have
come as close as they have to their original hoped for timeframe.

To get to this, decisions were made in a parallel process. While one
working group was reviewing proposals for the first round of grants,
other working groups were establishing the criteria for financial and
program accountability. As you know, accountability is going to be key
to many of the donor governments, including U.S. Congress, feeling
comfortable in continuing to increase their pledges to the Global Fund.

The Fund has great potential to attract new resources to fight AIDS, TB,
and malaria, and to put these new resources to work quickly. The Fund is
a new way of doing business and has successfully brought new resources
to this battle, but it must also insure effectiveness. In order to do
this the Fund needs good strategies, effective governments, strong
monitoring and evaluation, and sound infrastructure, including staffing
levels, budgets, and a work plan. These are some of the things we will
be discussing next week in Geneva.

U.S. is proud of its leadership on the Global Fund to Fight AIDS, TB,
and Malaria. HHS, USAID, and the State Department have been very
involved at the international level in the Global Fund and the board
itself. In addition, HHS and USAID are also working very hard in the
field at country level with country coordinating mechanisms, or CCM's,
and national governments to support the work of the Global Fund in
preparing grant proposals. We will be prepared to do that same kind of
support to make the proposal implementation fully successful. We look
forward with this very intense effort of the U.S. government to making
this Fund as effective as possible. We'll now open it up for any
questions you might have.

Question: My question concerns just some of the funding proposals that
have come up. Can you give us an idea of some of the proposals that the
board or board members have already reacted positively to, and if there
are any innovative proposals that stand out?

Dr. Peterson The first set of proposals were first reviewed by the
technical review panel and they had actually very stringent requirements
for were these proposals going to address the three diseases and be
successful in what they were doing. They had a very, very short
timeframe for putting the proposals together. So we got what we actually
should have expected, and that is more proposals in the malaria and TB
area, because those were places where there were ongoing groups in
country to put the proposals together. Many of the countries did not at
that time have the equivalent of the CCM to do the AIDS proposals.

So what we saw are some really good proposals. And there were some, the
one that was absolutely the best, ready to go was the Tanzania proposal,
which is mainly a bed net proposal for malaria. What we had was more
within the TB, malaria, and fewer within the HIV AIDS. Though it was
still more than half for HIV AIDS related proposals.

> I expect that we will see even better proposals, more technically
> sound, in the second round, and that we will have to go back to the
> drawing board to get additional information, much less than we did
> previously. As people step up to the plate and have had more time to
> put their CCMs together, their proposals together, we'll see even more
> innovation in the second round than in the first round.

Mr. Evertz Dr. Peterson's absolutely correct. The Global Fund
Secretariat, in fact, reported that the second round of proposals is
greatly improved, which is not to suggest there weren't good proposals
in the first round, but they're quite pleased with the innovation. You
used that word in your question. That is certainly an unintended benefit
of the fund. It's the fact that they are innovative ideas coming out of
CCMs, which can obviously be shared with other developing countries as
they develop proposals and responses to the three diseases.

Dr. Peterson Let me also reaffirm that the CCMs, themselves, are an
innovation. They are for the first time, in many of these places,
bringing the NGOs together with the government sector to be designing
what should be happening. In Haiti, the NGOs are ones they have working
outside of the government and still have come together to really bring
together a proposal that's very good.

Question Thanks for having the conference call. I'm wondering what kind
of impact there will be from the story was in the *Washington Post*
today that detailed drugs are actually making there way back, making
their way from Africa to Europe for resale. To that, and also if you're
satisfied that the Fund will be setting up with some private companies
to oversee some of the financial dealings and monitoring them?

Mr. Evertz What I'm actually going to do is I'm actually going to start
with your second question first and then we'll answer your first
question. Your question is about what's being called LFA's. There are
private companies, you reference them; KPMG, for instance,
PriceWaterhouseCoopers, and in fact I, myself, just had a phone
conversations with Dr. Richard Feacham about this very topic. NGOs have
asked a number of questions about the ability of those countries to
oversee both programmatic, as well as, financial audits of sorts.

What the Global Fund is reporting, we're quite pleased with, and that's
that these companies know quite well when they're in an area where they
don't present expertise and are accessing organizations that have
experience and expertise in specific areas on the ground. In fact,
that's one thing that we were quite pleased to learn that these
organizations do not feel that they know everything when it comes to
monitoring health programs, admittedly, and are accessing other
organizations as a part of this process, and will continue to do so.
Obviously, they have the expertise in the financial area.

The other thing I think a lot of people are surprised to learn is that
many of these companies were chosen because they do have significant
presence on the ground. These are not companies that parachute in, if
you will, but have a presence in the developing world. The Secretariat
felt that was quite important, in terms of evaluating the program. Are
you going to handle the drug question, Dr. Peterson?

Dr. Peterson I'll do a little bit on the drug, and certainly this is an
issue that has come up often. The U.S. government has wanted to be sure
that it was handled properly, and obviously the private sector wants to
know that we will not have drugs coming back through the developing
countries into the European or U.S. market.

> The procurement working group will report out at the board on these
> specific issues with what they see, potential problems, ways to get
> around it, what the policy should be that they are recommending to the
> board to make sure that we get as much access as possible to drugs,
> without causing any unintended consequences.
>
> I would say again this is another place where the Fund gets to use its
> innovative structure. We have private sector on the board, who know
> and understand the issues for the private sector, and we can plan in
> advance to avoid unintended consequences. So it's actually been very
> instrumental. It means that we actually talk through very hard issues
> very early in the life of the board. I think that is good for its
> long-term success.

Mr. Evertz If I could just add to that, that's an excellent point that
Dr. Peterson makes. We're providing a whole new level of
non-bureaucratic oversight, if you will, in the world of funding to
fight disease. I think it's going to be quite striking and exciting how
that innovative process that Dr. Peterson refers to actually ferrets out
some of the problems of the past. We're really excited about that.

Question I guess one of the things that I'm struck by from your initial
comments was a real strong message that you are very pleased with the
pace of how things are going at the Fund. I contrast that with
experience in Africa, where people on the ground are very displeased
with the pace of the Fund. I'm wondering what's up with this. How you
can bridge these two very different perceptions of how things are going?

Dr. Peterson I think that one's easy. It's really a matter of
expectations. I've been on a number of boards, both from sort of idea to
instigation and creation. They're actually cumbersome, long, slow, hard
processes and we've done this very fast, even for much less
controversial politically charged issues, and this one's on a huge
international scale. Now, for the countries that are waiting for the
money there is an urgency and a need that certainly the expectations and
the hope is that it could come much faster than it has.

> So I think this is exactly what we should have expected that those
> who've been through the process can say, wow, this has been amazingly
> fast and we've done an amazing job at getting a board together. Is it
> as fast as we would have liked for the scope and urgency of the
> problem? No, but I still think that it's been amazing to have done as
> much as we had.
>
> To go any faster and we could well have compromised the accountability
> mechanisms, both in project design and in financial accountability. I
> often say we still have way too few resources in this fight against
> AIDS to waste any dollars in wrong programs, wrong actions, that don't
> actually fight the disease. So we need to go just slowly enough that
> we make sure that we do the right things that are going to stop this
> epidemic.

Question Can I follow up on that one little question? Have you actually
pinpointed where a troubling bottleneck is? Is it at the CCM level, in
trying to make sure that there's accountability at the country level?

Dr. Peterson The major one getting us to where we are now was finding a
way to do the financial in country oversight and the local fund agent,
who they could be, what their roles should be, were the issues that
needed to get dealt with this summer. That took a little bit of time and
rightly so.

> Now, simultaneously the CCMs also needed to respond to the technical
> issues within their proposals on the first round, and so those were
> happening in parallel and moving along both as fast as I think they
> probably could. The other is, again, the staff at the Secretariat was
> very, very, very small. In April they had six permanent staff and a
> lot of loan staff that, again, I would have to say the amount of work
> that has been accomplished with very few people has been phenomenal.

Mr. Evertz There really isn't a particular place of bottleneck. It's
just an issue of human capacity and we're staffing up and ramping up as
fast as really humanly possible and, again, as Dr. Peterson points out,
with amazingly swift speed, but certainly not swift enough for someone
who is suffering in the developing world.

Dr. Peterson We have dealt with a lot of big policy issues, as well as
programmatic functional issues. You want to make sure that one, you have
concurrence of the entire board on the policies, and that you're in the
right place, you're really moving the right things forward. It's been a
challenge to bring this many people together and get an agreement on
something that is so urgent and life and death.

Question My question relates to basically the focus of the proposals.
Last time around a lot of the money was pledged to Africa, if I'm
correct. I'm wondering if there's going to be shift away from that and
more towards emerging areas, where in the case of HIV/AIDS where the
epidemic is growing, such as in Asia and Eastern Europe. A follow up
question, just based on some of the things you said earlier about the
staffing, what are the optimum levels of staffing that the Fund is
looking for? Are we talking about a small staff or does it plan to turn
into something larger?

Dr. Peterson Let's do the last one. They've started very small. They
intend to stay small, and remember the Fund is to be a financing, not an
implementing, agency, so their final staffing pattern that they hope to
get to will be around 50 to 53, which is pretty lean and mean.

> As far as the focus on the proposals and the majority going to Africa,
> clearly the highest prevalence areas and currently the largest numbers
> have been in Africa. Both on bilateral funds and the Global Fund have
> done a greater percentage to Africa than other parts of the world, but
> this is an ongoing process. How do we respond? Is it by prevalence and
> therefore how big the devastation will be within that country or based
> on numbers, and then places like China, India, and the growing
> epidemic in Russia, where very small increases in prevalence will lead
> to greater numbers, make a huge difference.

We certainly have also been looking at the emerging epidemics and the
need to get our hands around it so it doesn't grow. The Fund is
responding back to proposals that come to us, what the country deems is
important to do and, frankly, all of these countries have needs. When
the proposals themselves are looked at, very important is, is this an
emerging epidemic and have the strategies been planned to address the
kind of epidemic in that country? So epidemiologically, where are the
diseases in that country and is the proposal designed to respond to it?

Where we go in the future will either be just a direct response to the
proposals that come in or at some point the board could look at is there
a better way or a funneling of resources based on prevalence emerging or
non-emerging to do on the policy end? Right now we're responding to the
proposals of need that the countries bring to us.

Mr. Evertz If I could just point out that in the first round, however,
there was the fairly significant proposal funded in Haiti, so we
certainly acknowledge that the epidemic is nowhere nearly as far away as
Africa. We're quite pleased that the TRP recommended that proposal for
funding. The TRP is the technical review panel that reviews proposals
and deals with the many issues that Dr. Peterson just articulated.

I would have to draw on the question that Mr. Donnelly asked about kind
of the disparate reactions to the speed at which the Fund is moving
forward. I would have to suggest that those of us that have been working
on this from that day one, if you will, when the President made the
pledge to the Global Fund as an idea, we experience a mixture of
optimism and pessimism in the same day, if not by minute, that we
certainly are pessimistic at the numbers that we see and where we see
the epidemic proceeding.

> We're optimistic, however, that for the first time, at least in my
> lifetime if not in history, a global community has gotten together to
> address the health pandemic that HIV/AIDS and the other two diseases
> are in a way that is truly outstanding. Anyone who participates in the
> United Nations like processes know how long such deliberations can go
> on and on and on. In fact, a Fund with many layers and levels of
> potential philosophical difference now exists and did exist less than
> one year after the first pledge was made to that fund. So I've often
> been asked if I think history will judge us well and I answer that by
> saying I'm not quite sure just yet, but I think so far so good. If we
> keep proceeding in the direction we're going I think history really
> will look at 2001 and the creation of the Global Fund as the watershed
> event.

Dr. Peterson Let me just close by saying that the challenge before us is
huge, the tasks are not easy, and that success of a Global Fund is not
sure. Our commitment here in the U.S. is to work internationally at
board meetings, within the U.S. itself, and especially in the recipient
countries, in every way possible that we will be trying to insure the
success of the Global Fund.

Moderator Great. Thank you for joining us this afternoon.