Communication from the Commission to the Council and the European Parliament for increased solidarity to confront AIDS in developing countries
Date: 1998-07-03
Institutions: European Commission
Subjects: AIDS, EU aid, developing countries, health policy, infectious disease

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 03.07.1998 
COM(1998) 407 final 

COMMUNICATION FROM THE COMMISSION 
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT 

FOR INCREASED SOLIDARITY TO CONFRONT AIDS IN DEVELOPING 

COUNTRIES 

DOCUMENT MOTIVATION 

This document aims to: 

Give a first  basis for  a debate on the response to the request  of the European  Council 
in  Luxembourg  asking  the  Commission  "d'étudier  les  modalités  de  l'établissement 
d'un fonds  de solidarité thérapeutique sous  l'égide  de l'ONUSIDA destiné à  la lutte 
contre le SIDA dans les pays en voie de développement "" 

• 

respond to the request of the Parliament, approved by the Council of Ministers, within 
the  framework  of  the  regulation  of  the  AIDS  (Acquired  Immune  Deficiency 
Syndrome) budgetline n° B7. 6211 "Studying ways and means of improving access to 
...  in  close 
treatment  for  people  infected  with  HIV  in  the  poorest  countries 
collaboration  with  the  United  Nations  agencies,  concerned  NGO's,  pharmaceutical 
laboratories and the Members States of the European Union." 

recognise  and  welcome  all  of  the  calls  for  increased  and  enhanced  international 
solidarity to confront  AIDS, including those made at the Denver  and Birmingham G8 
meeting,  the  UNAIDS  (United  Nations  Joint  Programme  on  AIDS)  meeting  on 
perinatal  transmission,  the  International  AIDS  Vaccine  Initiative  (IAVI)  and  the 
World Bank's call for the creation of a vaccine purchase  fund. 

recapitulate  the  Commission's  existing  priorities  with  respect  to  HIV  (Human 
Immuno-deficiency  Virus) and AIDS in developing countries. 

outline  the  Commission's  position  on  several  recent  calls  for  increased  international 
solidarity  to  confront  AIDS  in  developing  countries  and  the  possible  EC  specific 
contribution to a new international initiative. 

propose  a  framework  for  an  additional  strategy  and  some  elements  to  consider  in 
relation to financial  resources through which the EU could participate  in an enhanced 
international  solidarity effort  to confront  AIDS in the domains of prevention  (vaccine) 
and improved care in developing countries. 

i:\emma\aids\communic.final.vers.I.EN 

1/07/98 

A&-

COMMISSION  COMMUNICATION 

FOR INCREASED SOLIDARITY TO CONFRONT AIDS IN DEVELOPING 

COUNTRIES 

EXECUTIVE  SUMMARY 

This Communication: 

1)  Provides  a  context  to  the  calls  for  international  solidarity,  describing  the  present 
situation  with  respect  to  HIV/AIDS  (Human  Immuno-deficiency  Virus  and  Acquired 
Immune Deficiency  Syndrome) in developing countries. 

2) Outlines the European  Commission's  (EC's) position  on national  and  international 
priorities  for  the use of public  funds  in confronting  AIDS  in developing  countries.  It 
highlights  the  mutual  reinforcement  of  prevention  and  care  through  the  provision  of 
public goods. 

3)  Summarises  the  EC's  existing  efforts  in  confronting  HIV/AIDS  in  developing 
countries,  before  discussing  how  these  may  be  strengthened.  Firstly,  it  highlights  the 
success of cost-effective targeted preventative interventions, and the importance of their 
expansion.  Secondly,  it  stresses  the  importance  of  support  to  strengthen  health  care 
systems, outlining possible improvements. 

4)  Explores  the  possibility  of  creating  new  solidarity  mechanisms,  and  examines  and 
several  alternatives.  Firstly  the prospect  of  financing  care including anti-retrovirals in 
developing  countries  is  explored,  and  concerns  of  technical  uncertainties,  relative 
priorities,  affordability,  and  public  policy  are  raised.  Secondly  the  possibility  of 
developing  vaccines and microbicides, and  creating  a purchase  fund  for  these  products 
once developed is discussed and given general support. 

5) Outlines  the  potential  for  additional  specific  contribution  of the EC, including  the 
allocation of additional financial resources to: 

•  support countries m purchasing existing commodities, namely, in order of priority 

a) AZT (Azidothymidine) in monotherapy for pregnant seropositive women 

b)  medicines  for  sexually  transmitted  diseases  (STD's),  tuberculosis  (TB)  and 
other opportunistic diseases 

c)  anti-retroviral  (ARV)  therapy  for  pilot  testing  in  a  few  countries  already 
selected by UNAIDS 

• 

leverage  further  investment  by  the  private  sector  in  developing  vaccines  and 
microbicides and providing purchase funds for these commodities once they exist 

¥> 

6) Stresses  the global responsibility  of UNA1DS in the management  of new solidarity 
instruments,  whilst  nevertheless  leaving  major  decisions  in  developing  countries,  and 
underlines the importance of monitoring. 

TABLE OF CONTENTS 

I: Introduction 

A. The challenge for the coming decade 

B. Confronting  HIV/AIDS 

1. Care for people with HIV/AIDS: A World Apart 

2. Preventing the spread of HIV/AIDS 

C.  Political  momentum  for  additional  international  efforts  and  renewed  international 
solidarity 

D. Document Outline 

II;  The  EC'S  position  on  National  and 
presently available public funds in confronting AIDS in developing countries. 

International  priorities  for  the  use  of 

HI:  The  EC's  existing  efforts  in  confronting  HIV/AIDS  and  recommendations  on 
strengthening these areas in the future 

A. Prevention - Low cost interventions 

The special issue of preventing mother to child transmission 

B. Support to National Health Care Systems 

IV: New international solidarity initiatives 

A.  Financing  health  care  and  anti-retrovirals  for  people  with  HIV/AIDS  in  developing 
countries 

1. The  situation  of  the health  care  systems  in  developing  countries  and  how  to 

face the extra burden caused by HIV/AIDS 

2. The specific issue of combination therapy with anti-retrovirals 

a) 

b) 

c) 

Technical  issues  regarding  the  generalised  use  of  combination 
therapy for the treatment of HIV  infection. 

Relative priorities 

Affordability. 

d) 

Public policy towards anti-retroviral treatment. Experience to date 
in some developing countries 

B. Private and public partnership to develop a vaccine and microbicides 

C. Modalities of  new international solidarity instruments 

V:  The EC's specific  contribution 

A. What is to be financed by additional  EC resources? 

B. The main commodities which could be purchased 

1. Commodities that already exist 

2. Commodities still to be developed 

C. A framework  for what would be financed by additional resources 

D. How are the funds to be to provided to the countries? 

E. Some examples of conditions to be in place for the use of the EC's budget support  at 
country level. 

1. Medicines already available 

2. Products not yet available 

VI: Management of  new solidarity  instruments 

A. International level. 

B. National management of a fund to provide commodities for developing countries 

C. Monitoring 

D. Regarding management of a new international financing  instrument for the testing and 
purchase of vaccines for developing countries 

VII:  Conclusion  about  International  co-operation  and  the European  Community's 
specific  contribution 

Annex 1 - Quotes concerning international solidarity with respect to HIV/AIDS 

I: INTRODUCTION 

A. The challenge for the coming decade 

From the beginning of the AIDS epidemic it was recognised that AIDS could not be dealt 
with  by  households  and  countries  alone.  The  international  community  had  to  be 
mobilised  and  their  efforts  could  only  be  sustained  through  sufficient  political 
momentum and financial resources over a long time period. 

It  is  in  this  context  that  the  European  Community  in  1984  first  began  research  on 
HIV/AIDS,  and  in  1987  first  became  involved  in  actions  dealing  with  HIV/AIDS  in 
developing countries.  At that stage the EC and the African,  Caribbean and Pacific  (ACP) 
countries agreed that "AIDS would be a major  challenge for development and should be 
dealt with as such".  Only six months after the programme started in the ACP countries, 
other  developing  countries  became  eligible  for  support  through  a  specially  created 
budgetline. 

In  the  1980's  the  challenge  faced  by  the  countries  was  to  rapidly  develop  effective 
interventions  to prevent  the  spread  of AIDS, to  strengthen  the different  systems  to  deal 
with  the virus whilst  at the  same time  increasing  the  scientific  learning  and  knowledge 
basis. The EC together with the international community supported national and regional 
efforts. 

The  policies  and  strategies  for  EC  support  were  widely  debated  as  formulated  in  the 
Communication  of  7th  January  1994  from  the  Commission  to  the  Council  and  the 
European Parliament entitled  "AIDS policy  of the Community and the Member States  in 
the developing world", and also in the legal basis for the special AIDS budgetline n° B7. 
6211 (Ref. 95/0164(SYN) dated 26.6.95). 

Now,  at  the  end  of  the  1990's,  the  challenge  is  to  implement  the  most  effective 
interventions  at  a  large  enough  scale  whilst  simultaneously  supporting  health  care 
systems to deal with those already infected  and further  developing knowledge to improve 
interventions  and  develop  new  methods.  This  has  been  explored  in  detail  in 
"Confronting AIDS:  Public priorities  in a global epidemic",  a joint exercise carried out 
by The World Bank, the European Commission, and UNAIDS, published in 1997. 

These challenges for the future  were presented by the Commission at a public hearing at 
the Parliament  where the continuation  and strengthening  of support  for AIDS  actions in 
third  countries  in  the  future  was  announced1.  The  European  Commission  (EC)  also 
proposed priorities for its financial  support in the future.  These priorities are summarised 
and explained in Chapter II. 

B. Confronting  HIV/AIDS 

1. Care for people with HIV/AIDS: A World Apart 

It is estimated that today in  1998 more than 30 million people are infected  with the HIV 
virus world-wide, of whom 90% live in the developing world and 20 million are living in 
sub-Saharan Africa.  Of those living in sub-Saharan Africa, half are women. 

1 Hearing  at the European  Parliament,  25th November  1997 

5 

Until recently, it was considered that the disease had a lethal outcome in close to  100% of 
all infected  individuals, though  there were significant  differences  between rich and poor 
countries  in the prevention  of mother to child transmission,  the care of patients,  and the 
course of the illness. 

In rich countries, the great majority  of the population received specialist care in public or 
private health services. Even though no cure was available, it was possible to extend  life 
by  preventing  and  treating  opportunistic  infections,  making  use  of  AZT  monotherapy, 
providing  psychological  support,  and  ensuring  good  nutrition,  with  the  result  that  the 
average duration between infection  and death was around  12 years. 

In poor  countries,  only  a  small  proportion  of patients  received  any  specialist  care,  and 
against  a  background  of  poverty,  poor  nutrition,  weak  health  sectors  and  insufficient 
treatment  of opportunistic  infections,  duration  of life  after  seroconversion  was  generally 
considerably less than ten years, and transmission from mother to child remains common. 

However  two  years  ago  the  perception  that  AIDS  always  had  a  fatal  outcome  changed 
with  the  development  and  introduction  of  therapeutic  strategies  involving  the  use  of 
combinations of anti-retroviral drugs and protease inhibitors which not only improve the 
quality of life of nearly 80% of the persons under medication, but hold out the possibility 
that  future  developments  in  drug  research  may  allow  a permanent  arrest  of  the  disease 
process.  Furthermore,  in  the  richer  countries,  the  advent  in  1996  of  monotherapy  for 
pregnant  women,  and  the  availability  of  alternatives  to  breastfeeding  and  options  for 
testing  and  counselling,  has  rapidly  minimised  the  transmission  of  HIV  during 
pregnancy. 

For  the  first  time,  it  appeared  that  HIV  infection  did  not  necessarily  have  a  fatal 
conclusion.  Following  these  discoveries,  protease  inhibitors  and  anti-retroviral  drugs 
have been widely used in the richer countries. 

The  discovery  of  effective  monotherapy  for  pregnant  women  and  combination  therapy 
for  people  with  HIV  has  still  further  widened  the  difference  in  the  prospects  of  HIV 
infected  individuals  in rich and poor countries. Whereas  in the  industrialised  world,  the 
number of new infections  is falling  (as a result  of successful  prevention  campaigns) and 
the  prospect  of  effective  therapy  has  appeared,  in  the  poorer  countries  new  infections 
continue  to  occur  at  a  high  rate  and  the  outcome  is  still  universally  fatal.  Several 
countries in the developing world have seen a serious decrease of life  expectancy due to 
AIDS, and adult mortality due to AIDS is still increasing in the most affected  areas. It is 
likely  that  40 million people will  die as a result  of HIV  infection  over the next decade. 
Children will also become infected in large numbers. 

This  reality  of two  different  worlds  facing  AIDS  and  its  consequences  is a reminder  of 
the  major  differences  in  quality  and  access  to  health  care  between  industrialised  and 
developing countries in general and the difficult  choices this entails.  For example 1  in 50 
women in developing countries dies as a consequence of the complications of pregnancy 
and childbirth compared with only  1  in 2700 in the established market economies. 

It  is  in this context,  of huge disparities  in health  status and the capacities  of health  care 
systems  dealing  with  all  health  problems  including  HIV/AIDS,  that  the  call  for  greater 
international  solidarity  to increase the accessibility  to prevention,  care, and  combination 
therapy has to be seen. 

2. Preventing the spread of HIV/AIDS 

It is now widely recognised that increased efforts  should be made to contain the epidemic 
where  possible  through  improving  the  efficiency  of  the  existing  interventions  such  as 
information,  targeted  education,  counselling,  testing,  condom  use,  and  treatment  of 
sexually  transmitted  diseases  (STD's),  but  also  through  the  development  of  new 
methodologies to prevent the transmission of the virus, especially amongst populations in 
developing countries. 

One of the additional preventive methods that became available recently is the provision 
of Zidovudine or AZT for pregnant women to reduce the transmission of the virus to the 
child.  At  the  same  time  as  the  results  became  available  of  the  clinical  trials, AZT  was 
also put on the essential drug list by WHO and the price was significantly  decreased §€ in 
order to make the intervention accessible to parts of the populations. 

At the present  time, the undertaking  to increase  access to care and treatment  for  people 
with HIV goes in parallel to the efforts  to make existing and new preventive interventions 
more  available,  because  it  is  recognised  that  for  countries  to  be  able  to  deal  with  the 
increasing burden caused by AIDS, the only serious option is to stop the spread  as soon 
and as efficiently  as possible. The countries that are able to contain the epidemic will also 
be  the  optimal  placed  to  provide  the  optimal  and  appropriate  care  to  their  populations 
with and without HIV. 

It is therefore in this complex context that new appeals to make AZT widely available for 
pregnant  women  to  enlarge  access to  other  anti-retroviral medicines,  and  to  develop  or 
leverage investment  in the production of products such as vaccines and microbicides are 
to be  seen.  These  developments  would  make  a real  difference  if  supported  in  the  near 
future  and  if new  financial  instruments were made available  for  developing  countries to 
purchase these products once developed. 

C.  Political  momentum 
international solidarity 

for  additional 

international  efforts  and  renewed 

With  the  purpose  to  organise  additional  efforts  and  mechanisms  to  further  increase 
international  solidarity  with  respect  to  AIDS,  the  European  Council  in  Luxembourg 
requested  the  Commission  "d'étudier  les  modalités de  l'établissement  d'un fonds  de 
solidarité  thérapeutique sous  l'égide  de  l'ONUSIDA  destiné à  la  lutte  contre  le SIDA 
dans les pays  en voie de développement " A  similar request had already been  introduced 
by  the  European  Parliament  and  approved  by  the  Council  of  Ministers  within  the 
framework  of the regulation  of the AIDS budgetline  n° B7. 6211  "Studying  ways  and 
means  of  improving  access  to  treatment  for  people  infected  with  HIV  in  the  poorest 
countries  ... in close collaboration  with the United Nations  agencies, concerned  NGO's, 
pharmaceutical  laboratories and the Members States of the European Union."2 

This document is  a first  phase of  the response to these requests and is designed to spell 
out  the  specific  role  the  Community's  programme  in  developing  countries  proposes  to 
play  in contributing  to increased  international  solidarity  for  prevention  and improved 
care for people with HIV, recognising that this objective must be a shared responsibility. 
Only an increased and well co-ordinated effort  will be able to confront  AIDS in the larger 

Article 2, paragraph 2b of EC regulation no. 550/p7 

7 

context  of competing priorities. The document mainly  focusses  at the different  priorities 
and dicusses strategy. Once consensus is reached on the basis of this document it will be 
possible to go into further  details and proposals for modalities and  financing. 

D. Document Outline 

This  introduction  has  provided  a  context  to  the  calls  for  international  solidarity, 
describing the present situation with respect the HIV/AIDS. 

In the second chapter, the document proceeds to outline the EC's position on national and 
international  priorities  for  the  use  of  public  funds  in  confronting  AIDS  in  developing 
countries,  highlighting  the  mutual  reinforcement  of  prevention  and  care  through  the 
provision of public goods. 

Chapter  three  then  briefly  summarises  the  EC's  existing  efforts 
in  confronting 
HIV/AIDS,  before  discussing  how  these  may  be  strengthened.  In  particular  low  cost 
prevention initiatives, and support to national health systems are explored. 

In the  fourth  chapter  the  possibility  of creating  new  solidarity  instruments  is  discussed, 
and several alternatives are examined.  Firstly the prospect of financing  anti-retro virais in 
developing  countries  is  explored  with  respect  to  concerns  of  technical  issues,  relative 
priorities,  affordability,  and  public  policy.  Secondly  the  possibility  of  developing 
vaccines  and  microbicides,  and  creating  a  purchase  fund  for  these  products  once 
developed  is discussed.  The modalities  of finding  funds  for  new  solidarity  instruments 
are only briefly  examined. 

In Chapter five,  the specific  contribution of the EC is outlined.  This includes  allocating 
additional resources both to support countries in purchasing existing commodities, and to 
leverage  further 
in  developing  vaccines  and 
microbicides. 

investment  by  the  private  sector 

An  introduction  to  the  discussion  on  the  management  of  new  solidarity  instruments 
follows  in Chapter six, clarifying  the position of the EC in relation to other  international 
bodies and highlighting the importance of monitoring. 

Finally the conclusion summarises the major  issues discussed, and suggests future  action 
at  strategic  level  including  a refocussing  of current  undertakings  complemented  by new 
efforts  to i) purchase medicinal  commodities at the country  level once they exist, and ii) 
leverage larger and more appropriate finances  for the testing and purchase of vaccines at 
the  international  level.  The  annex  provides  a  summary  of  various  statements  on 
international solidarity with respect to HIV/AIDS. 

Il:  THE  E C 'S  POSITION  ON  NATIONAL  AND INTERNATIONAL  rcioRmeâ  yon THE USE 
OF  PRESENTLY  AVAILABLE  PUBLIC.  FUNDS  IN  CONFRONTING  A I DS 
IN 
REVeLO?lNC COl*HTR3ES. 

Individuals,  countries  and  ths  international  community  have worked  hand  in hand  over 
the  past  ten  years  to  deal  with  the  new  and  enormous  challenges  created  by  AIDS. 
However  in  view  cf  decreasing  public  funds,  an  increasing  number  of .people  infected 
world-wide and several other competing priorities  facing people in developing countries, 
governments  and  donors  have  had  to  make  difficult  choices.  The  EC  together  with 
developing  countries  and  with  the  major  other  donors  have  discussed  the  need  to 
prioritise  the  use  of  available  public  funds  and  increase  their  commitments  and 
partnerships with the private sector. The EC has also come to some conclusions about it's 
own  comparative  advantage  and  the  way  forward  for  the  future.  These  choices  were 
presented by the Commission in November  1997 and as summarised as follows: 

The overall objectives of the EC's actions on  HIV/AIDS at national level are to limit the 
spread of the virus whilst helping the health sectors in developing countries to cope with 
the  consequences  and  improve  quality  of  care  without  discrimination.  The  overall 
objective  of the EC at the international  level is to collaborate to improve knowledge and 
to invest in international public goods as related to HIV/AIDS. 

The  lessons  learned  over  the  last  years  show  convincingly  that  developing  countries 
cannot ignore the HIV/AIDS epidemic.  In developing countries, where 90 percent of all 
HIV  infections  occur,  AIDS  is  reversing  hard  won  gains  in  improving  quality  of  life. 
Between  1950  and  1990  average  life  expectancy  in  developing  countries  has  increased 
from  40 to 63 years.  But  in many  countries  AIDS has now reduced  life  expectancy  by 
more than  10 years. HIV/AIDS  is  also  exacerbating  poverty  and  inequality  as the  poor 
have the fewest  resources to cope.  It is therefore  at the core of development and poverty 
alleviation concerns. 

However  poor  people  and  poor  countries  face  many  pressing  problems  beside 
HIV/AIDS, and public  resources  are scarce and choices are difficult.  For example, in a 
typical developing country it costs as much to treat  one AIDS patient for a year as it does 
to  educate  10 primary  school  students  for  a year. Balancing  these objectives  is  difficult 
but essential. 

The EC has therefore recognised that the essential use of national and international public 
funds  regarding AIDS should be focused  firstly  at the public good nature of  information, 
education  and  knowledge,  and  secondly  at  the  extra  benefits  associated  with  the 
prevention  of  communicable  diseases  (such  as  HIV,  tuberculosis,  and  sexually 
transmitted diseases (STD's)) which is a public as opposed to a private health issue. 

Prevention  is therefore  essential  and remains  so even  at  later  stages when the  epidemic 
has spread throughout  the general population.  At the end of  1997 it was estimated  that 
more than 250 million people  lived in countries where HIV infection  had spread widely. 
These countries  have no  other choice but  to confront  the epidemic both through  further 
preventative  efforts  and  through  facing  the rising burden  of AIDS  related  sickness  and 
death and the impact this has on the care given to all people within the country. 

When  a  country  reaches  this  stage,  and  when  public  funds  are  used  to  help  the  health 
sector  to  cope,  AIDS  can  push  up  government  spending  on health  care by  over 40%, 
while  people  without  HIV  sometimes  still  may  have  less  access  to  health  care  then 

before.  Within  this  concern  special  care  should  therefore  be  given  to  not  discriminate 
between allocations for care to people with and without AIDS, and special efforts  should 
be made to focus available public funds on basic care to the poorest. 

A  few  hard  hit  countries  that  focused  their resources  in this way  in the past  and  sustain 
their  efforts  today  are now  seeing  results.  For  example  Uganda,  Thailand  and  Senegal 
have succeeded  for the moment to relatively stabilise the epidemic through vigorous and 
targeted  preventative  efforts.  However,  these  successes  are  recent  and  need  to  be 
sustained through continued efforts  in the same direction. 

The  international  donor  community,  including  the  EC,  have  given  the  priority  to 
generously  support  developing  countries  efforts  in response to the AIDS pandemic,  and 
simultaneously  providing  ongoing  funds  for  investment  in  international  public  goods. 
Examples  of  international  public  goods  are  operational  and  fundamental  research  into 
policies,  systems,  clinical  effectiveness  of  mother  to  child  prevention,  and  the 
development of microbicides and vaccines.  The EC has also greatly increased its support 
to strengthening health sectors in developing countries. 

The  EC has committed  itself to continue  its efforts  to strengthen  the response organised 
in  the  developing  countries  and  focus  on  the  mutual  reinforcement  of  prevention  and 
care.  At  the  same  time,  the  EC  is  further  committed  to  invest  with  its  international 
partners  in  the  development  of  new  knowledge  and  products  to  increase  the  choice  of 
people in protecting themselves from HIV/AIDS. 

The  EC  recognises  the  importance  of  the  political  momentum  created  to  mobilise 
additional  support  to  confront  AIDS  in  developing  countries  and  examines  the  best 
opportunities  for  the  EC  to  contribute  to  those  efforts.  With  this  consideration  in  mind 
this  document  identifies  the  issues  and  the  opportunities  related  to  an  additional 
international  support with a special focus  on the specific  role and comparative  advantage 
of the EC. Only in a second  stage when the strategies are discussed will it be possible to 
prepare  more  detailed  discussion  documents  on  modalities,  instruments  and  financial 
requirements. 

Ill:  THE E C 'S EXISTING EFFORTS IN CONFRONTING HIV/AIDS AND 

RECOMMENDATIONS  ON STRENGTHENING  THESE AREAS IN THE FUTURE 

The  EC's  existing  efforts  to  confront  HIV/AIDS  in  developing  countries  are organised 
with  finances  from  a special budgetlines, national  and regional  programmes under EDF 
in ACP countries, and country programmes in Asia, Latin America, and Meditteranean. 

A. Prevention - Low cost interventions 

The EC has targetted  50% of its 
aids programme  financial  resources to cost  effective, 
preventative  interventions.  Initiatives have  included  information  campaigns  targetted  at 
high-risk  groups,  youth  education  especially  in  schools,  peer-group  education  for 
example  amongst  truck-drivers  and  sex-workers,  guaranteeing  safe  blood  transfusions, 
and treating STD's.  These projects have met with considerable  success, and prevention 
activities remain a priority. 

10 

In view  of  recent developments, if national health services are adequately  strengthened 
and if the country considers making anti-retrovirals available within this context, priority 
should he  given to medicines preventing  the transmission  from mother to child. Every 
year 2 million HIV positive women get pregnant and 550,096 infants are bom infected 
with HTV.  They live m fee world's poorest countries.  As a comparison, in Tanzania, ome 
of Africa's poorest nations, mosquito contool to prevent malaria costs $5-$25© for every 
year of  healthy  hfe  gamed.  The cost of AZT for all HTV infected  pregpant women  in 
Tanzania works out at about $50 per healthy life gamed.  U was calculated that Tanzania 
already  spends  $3.10  per  capita  on  AIDS  prevention,  and  that  providing  AZT  for 
seropositive pregnant women would add about BO cents per capita to that. 

Since  1987,  the  EC  has  set  up  and  collaborated  world-wide  in  aie  research  and 
development  of a  strategy for preventing  mother to  child transmission  of HIV.  At aie 
present  time,  further  operational  and  clinical  research  is  still  needed  while 
operationalisation lias begun in several countries. 

The  EC  could  contribute  further  in  this  area  in  a  preliminary  stage  %y financing a 
feasibility  assessment  of  an  essential  package  for  pregnant  women  in  developmg 
countries,  which  would  include  different  options  for  HIV  testing  and  counselling, 
breastfeeding or bottle feeding, and other priority interventions.  Existing instrumente and 
funds are adequate for this work for the present time. Therefore funds could be mobilised 
within EC's  regular instruments to  develop  and evaluate  such interventions  on  a large 
scale. 

In summary the existing instruments from the EC to provide  support for prevention and 
care  for people with HTV, and the possibility  to prevent perinatal transmission  of HIV 
within the context of general health care support are appropriate but additional efforts to 
increase and improve the existing support could be made if more flexible instruments and 
more human resources  were made available within the overall  context  of health sector 
support to developing countries. 

B. Support to National Health  Care Systems 

The EC has increased its support to health sectors in developing countries over the last 
years both in terms of quantity and quality, including  support in the fields  of access to 
care and prevention of AIDS. 

This is reflected by the fact that from the 6th  to the 7 m  EDF the EC's support for health 
projects has increased from 184 MECU to 415 MECU.  hi addition, 633 MECU has been 
used  for  support  to  national  health budgets  in  ACP  countries  through  the  counterpart 
funds  of  structural  adjustment  operations. Efforts  in the ALAMED countries have also 
significantly  increased.  A  substantial  part  of  these  funds  are  used  on  essential  drugs 
programmes, including restructuring central medical stores. 

In  order  not  to  discriminate  against  or  for persons  with iïïV,  the  main  way  the EC 
supports access to care and treatment for all people (including for HIV infected persons) 
is through general health sector support, within which access to essential drugs is a major 
focal area for the EC. 

In addition to the main financial instruments which are used to support the health systems 
and  fund  essential  drugs,  the  special  budgets  for  AIDS  are  used  to  facilitate  studies, 
innovative  interventions  and  technical  support  to  promote  the  inclusion  of  HIV/AIDS 
issues within the general health system. 

EC  support,  as  a  part  of  national  and  international  efforts,  has  ensured  a  greater 
development  of  the  medicines  system  in  several  countries  and  has  improved  access  to 
medicines  for people  in general. However, because of the  scale  of the problem,  and the 
lack  of  financial  and  human  resources  both  in  the  developing  countries  and  within  the 
EC, this  is not  done in all developing  countries where it is needed  and it is a long term 
process.  The  existing  instruments  are  in  general  appropriate  for  the  purpose  for  which 
they have been created. 

However, the main constraints are insufficient  funds  allocated by the countries within the 
context of competing priorities, limited technical capacity in developing countries and in 
the  EC,  and  a  lack  of  rapid  and  flexible  instruments  to  access  human  resources  and 
expertise  in  this  field.  Additional  efforts  and  instruments  and  a  technical  assistance 
group would be beneficial  and would provide the opportunity to do more, to do it  faster 
and with a higher degree of quality.  This could be considered within the context of the 
EC's  general  health  sector  work  strengthening  activities  at  national  level,  and  could 
specifically  focus upon the following areas: 

•  Improve co-ordination of all efforts  in the health sector at country level with a special 
emphasis on the provision of medicines under the leadership of  the country  involved 
and in close co-operation with the WHO and other donors. 

•  Consider  HIV/AIDS,  its  consequences,  and  the  public  requirements  within  general 
public  expenditure  and health sector reviews, on the basis of a rapid  assessment  tool 
which should be developed and validated. 

•  Encourage  a  more  rapid  development  of  adequate  sustainable  medicine  systems  in 
for  STD's/HIV, 
developing  countries  which  also 
opportunistic  communicable  diseases  such  as  TB, and  AZT  to  prevent  transmission 
from mother to child, and give special attention to developing a system for nationals to 
decide which medicines are to be subsidised and for which illnesses the costs need to 
and can be recovered. 

includes  essential  drugs 

•  Provide  training  for  the  adequate  and  appropriate  use  of  medicines  and  set  up 

monitoring systems to follow up performances  and trends. 

•  Strengthen systems to include testing and counselling for populations which could not 

benefit from them otherwise. 

•  Strengthen  collaboration  of the public sector with profit  and no-profit-making  private 
sector  to  support  general  care  for  diseases  such  as AIDS,  for  example by  providing 
more facilities  for home care. 

12 

IV:  NEW INTERNATIONAL SOLIDARITY INITIATIVES 

The increased international efforts  to improve world-wide solidarity in confronting  AIDS 
are welcomed.  Clearly however, the new effort  should have an additional character, and 
must not cause a decrease in supporting existing HIV/AIDS activities. 

From  the  discussion  developed  earlier in the text, the EC identifies  a few  priority  focal 
areas as concerns where international renewed and additional efforts  could occur.  It  also 
identifies the possibility of international co-operation in creating new initiatives. 

Specifically  the  new  international  solidarity  initiatives  focus  upon  i)  strengthening  the 
health  system  in developing  countries to enable the purchase  of most needed  medicines 
and  to  generally  improve  the  quality  of  care  for  affected  people,  and  ii) creating  a new 
financial  instrument  to  increase  private  sector  investment  developing  new  preventative 
methods such as vaccines and microbicides.  These options are explored in detail below. 

A.  Financing  health  care  and  anti-retrovirals  for  people  with  HIV/AIDS  in 
developing countries 

1. The  situation  of the health  care systems  in developing  countries  and how  to  face  the 
extra burden caused by AIDS 

Even without the challenge of HIV/AIDS, the publicly  funded  health care systems in the 
are under enormous pressure.  Whereas the World Bank 
poorer  developing  countries 
calculated  that  it would  cost  around  $12 per  capita  or  3.4%  of  GNP  to  deliver  a basic 
package  of  care,  the  actual  levels  of  expenditure  achieved  are  often  much  lower.  For 
example, the average public expenditure on health for sub-Saharan African  countries was 
2.5% of GNP in  1990, and it fell as low as 0.5% in the case of Sudan.  Total expenditure 
from  all  sources  was  $5  per  capita  or  less  in  Mozambique,  Tanzania,  Ethiopia,  Sierra 
Leone  and  Sudan. 
In  comparing  this  figure  with  the  required  $12,  it  needs  to  be 
remembered  that  much  of  the  actual  expenditure  is  incurred  on  services  outside  the 
package.  Such  low  levels  of  expenditure  are  manifest  in  minimally  functional  health 
services,  with  demoralised  and  frequently  absentee  labour  forces,  frequent  drug  stock-
outs, and low rates of effective  coverage of the population. 

Faced with such momentous problems, few of the poorer countries were able to mount an 
effective  response to  HIV/AIDS using only domestic resources.  The general pattern has 
been  that  a considerable  proportion  of public  resources  has  been  expended  on  curative 
care of AIDS patients.  This has not been the intended consequence of public policy, but 
has  arisen  spontaneously  as  ever  higher  proportions  of  beds  in  public  hospitals  are 
occupied  by  AIDS  patients.  A  particularly  unfortunate  consequence  has  been  that 
patients  with  other  diagnoses  have  found  it  increasingly  difficult  to  gain  admission  to 
hospital, even when their prognosis is much better. Furthermore, private expenditures are 
almost  exclusively  for curative care.  The great majority  of funds  for preventive actions, 
such as public education, condom promotion and treatment of STDs, have been provided 
by  external  donors.  This  leads  to  divergent  patterns  of  expenditure,  depending  on  the 
share of the public  and private  sectors, and the extent  of external  funding.  In Tanzania, 
where the private sector is small and there has been much external support,  85% of total 
expenditure  on  HIV/AIDS  has  been  on  prevention.  By  contrast,  in  Cote  d'Ivoire,  the 
bulk  of  public  spending  has  been  on  treatment  and  less  external  aid,  with  the 
consequence that treatment accounted in 1995 for 92% of total AIDS expenditures. 

13 

2- The specific  issue of combination therapy with anti-retrovirals 

The problem of lack of accessibility to anti-retrovirals in developing countries was raised 
acutely  when  scientists  announced  at  the  International  AIDS  Conference  in  Vancouver 
that new triple therapy  for HIV was improving  and extending people's  lives in the West. 
There have  since been  further  reports confirming  these results. The question  then posed 
is:  "is  it  feasible  and  desirable  to  provide  combination  therapy  to  HIV  infected 
individuals in developing countries ?" 

Calls from  different  groups were made to make these drugs " available for all", implying 
availability  for  the  majority  of  people  infected  in  developing  countries.  However  the 
difficulties  in complying with this demand are manifold, and raise four main concerns: 

a)  Technical  issues  regarding  the  generalised  use  of  combination  therapy  for  the 
treatment of HIV infection. 

From 
the  clinical  perspective,  it  is  now  clearly  established  that  anti-retroviral 
combination  therapies  have  beneficial  effects  for  the  quality  of  life  of  HIV/AIDS 
patients: they diminish morbidity and mortality, significantly  improve quality of life and 
possibly decrease infectivity.  However multiple challenges still need to be overcome. 

Issues  to  consider  include  the  long  term  effectiveness  of the  medicines,  the  absence  of 
more  patient-friendly  medicine  combinations  or  regimes  (present  regimes  involve  a 
multiple  of pills to take at precise times), the need to have specialised  laboratories, tests 
and  clinical  surveillance  to  ensure treatments,  and the nutritional  status  and  compliance 
of  the  patients.  Only  a  maximum  of  80%  of  patients  respond  to  treatment  in  the 
industrialised  world.  Treatment  requires  indefinite  disciplined  compliance  and  extensive 
monitoring  of  liver  and  renal  functions.  It  also  requires  expensive  and  yet  not  very 
efficient  viral  load  testing  as well  as trained  doctors  to  supervise the treatment.  If these 
conditions are not in place, there is a risk of producing world-wide resistance to the new 
drugs. 
In  addition  to  this,  specific  clinical  problems  remain  unanswered  due  to  the 
absence  of  data  from  the  countries  concerned.  These  issues  include  the  use  of  less 
expensive  bitherapies  and  drugs,  the  lack  of  experience  in  treating  HIV-2  infections 
(which  account  for  50%  of  the  cases  in  Senegal,  but  which  are  not  commonly 
encountered  in the Western  countries  where most  treatment  trials  have been  conducted 
and  where  HIV  1 is  the  most  common  strain)  with  the  newest  anti-retrovirals,  and  the 
reactivation of tuberculosis during anti-retroviral  treatment. 

b) Relative priorities 

When resources  are scarce, as they are in developing  countries, so that it is not possible 
to  finance  all  the  potentially  life-saving  interventions,  it  has  to  be  asked  whether  the 
public resources which might be allocated to combination therapy for HIV patients would 
be  more  productive 
if  applied  elsewhere,  targeted  towards  more  cost-effective 
interventions.  This  question  can  be  r.:ked  in  various  contexts.  In  terms  of  existing 
interventions which are specific  to AIDS, there is strong evidence to show that resources 
in terms 
applied to prevention are more effectiv  , than those applied to treatment even 
of  reducing  human  suffering.  However  proven  low  cost  preventive  measures,  such  as 
treatment  of other sexually transmitted  diseases (STD's), are insufficiently  funded,  even 
though the cost of treating an STD case is $10.15  including only $2.11 for medications. 
A  field  trial  in  Tanzania  has  established  that  the  cost  of  averting  an  HIV  case  by 
improved  STD  treatment  is  only  $218,  far  less  than  the  cost  of  annual  treatment  with 

14 

combination therapy which is at least $10,000. Given that our ultimate aim is to minimise 
the  toll  of human  misery  caused  by HIV/AIDS, it  is  important  to  channel  the  available 
resources into those actions that are most effective  in preventing the spread of the disease 
and in caring for those already  infected. 

If the context is confined  to those who are already infected  with HIV, there are treatment 
alternatives  to  consider.  In  sub-Saharan  Africa,  the  annual  cost  for  comprehensive  care 
without anti-retroviral drugs is around $500 per person (only $300 if the most  expensive 
opportunistic infections  are omitted). The provision of this care can add  several years to 
the  life  of  an  HIV  infected  individual.  Furthermore,  it  is  also  worth  remembering  that 
treating people with HIV for their opportunistic infections  is a pre-requisite for any more 
sophisticated treatment and in itself is also a means of improving quality of life. 

However,  in  practice,  treatment  in  general  has  encountered  chronic  problems  in  most 
developing  countries.  The  treatment  of  the  most  frequent  and  dramatic  opportunistic 
infection  linked  to  AIDS, tuberculosis,  costs  around  $20, but  the  effectiveness  of  most 
control  programmes  have  decreased  in  the  last  decade  and  the  availability  of  this 
treatment is far from universal in most countries. 

In the context of anti-retroviral therapy itself, there are strong arguments to give priority 
to  finance  a  short  course  of  AZT  for  seropositive  pregnant  women  in  order  to  prevent 
transmission  of HIV  to the new-born.  This monotherapy  has been proven  effective  and 
decreases transmission by 50% among non-breastfeeding  populations. The price has been 
cut by the company by 75% and comes now to $50-$ 150 for a short  course. 
If the context  is widened  again to consider interventions  for other conditions in addition 
to HIV infection,  there are strong inferences  that a given expenditure would have greater 
impact  if  applied  to  other  life-saving  actions,  such  as  infant  immunisation,  or  the 
treatment  of  diarrhoea  with  oral  rehydration  salts, which  all  cost  less  than  $15  per  life 
year  saved.  These  simple  and  low  cost  technologies  remain  widely  neglected,  and 
adequate financing of these  should be  a pre-condition  for  public  sector  spending  on the 
extremely high cost intervention of combination therapy for HIV patients. 

The potential for competition with many other public priorities in developing countries is 
great.  Pilot  programmes  for  combination  drug therapy  should  also be considered  in that 
light  because  even  if  they  are  largely  funded  by  grant  or  loan  money  from  outside  the 
recipient  country,  they  are  likely  to  attract  substantial  national  resources  (financial  or 
human)  which  could  otherwise  have  provided  effective  care  to  many  more  patients  or 
helped prevent the spread of the epidemic to thousands more. 

To be  fair  to both people with  HIV  infection  and  those without,  the heath  system  must 
first avoid  discrimination  against  people  with  AIDS. It  is  also  unfair,  however,  for  the 
care  of  AIDS  patients  to be  subsidised  more  than  that  of patients  with  similar  diseases 
such  as liver  cancer  or  kidney  diseases  which  are  extremely  frequent  in Africa.  Indeed, 
the main  issue  of concern  is the combination  of direct  and  indirect  pressures  caused  by 
HIV,  which  are  compromising  the  functioning  of  health  structures.  It  appears  that  the 
emergence  of  the  HIV  mortality  burden  is  to  be  considered  as  the  most  important 
challenge  to  the  health  sector  and  a  strong  reason  to  speed  up  and  reinforce  the  health 
sector  reform  process  including  the proper  organisation  and  financing  of medicines  and 
care.  However,  focusing  only  on  specific  HIV  treatments  could  jeopardise  the  highly 
needed more general reforms  in medicine financing  and health care. 

15 

c) Affordability. 

The annual cost  for treatment with anti-retrovirals (triple therapy) is  around  $10-20,000 
per  person,  the  lower  figure  being  derived  from  Thailand,  a  country  which  uses 
bitherapies  excluding  the  expensive  antiproteases,  and  the  higher  from  USA  and  UK. 
These  figures  are  a  huge  multiple  of  the  average  per  capita  expenditure  on  health  in 
developing  countries,  and  many  times  what  is  currently  being  spent  per  HIV  patient. 
While  it  is  to  be  expected  that  the  cost  of  drugs  may  fall  substantially  over  time, 
treatment  of  HIV  patients  using  combination  therapy  will  remain  expensive  due  to  the 
cost  of testing  and  monitoring  which  must be  taken  into  account.  It has been  estimated 
that to treat  all HIV infected  people in sub-Saharan  Africa  would  cost annually  $20-$40 
billion.  There  is no  indication  that  anyone, patients,  governments  or  external  donors, is 
willing  and  able to meet  more than  a tiny  fraction  of this cost.  This clearly means that 
access to anti-retro viral treatment cannot be financed  for all people who are seropositive. 
Therefore choices will have to be made, probably focusing on the poorest. 

d)  Public  policy  towards  anti-retroviral  treatment.  Experience  to  date  in  some 
developing countries 

The situation regarding public policy in favour of generalised use of combination therapy 
for  treatment  of  HIV  infection  is  very  varied  and  changing  constantly.  The  wealthiest 
people  in  many  developing  countries  are  already  finding  ways  to  get  anti-retrovirals 
(ARV), but  the poorest  people  are unlikely  to  do  so.  Therefore  the public financing of 
ARV  in the poorest  countries  could  disproportionately  subsidise health care for  the rich 
unless clear criteria for targeting towards the poor are organised.  Some countries provide 
universal  health  care  which  does  not  include  anti-retrovirals  (Kenya),  and  others  have 
provided  for specific  legislation to provide ARV to persons living with HIV/AIDS under 
different  health  care  systems:  under  the  social  security  system  (Argentina),  or  private 
insurance (South Africa), or from public funds (Brazil). 

Most  often  however  these  decisions  are  taken  without  sufficient  clarity  concerning 
whether additional  funds  will be added to the health care budget or if existing funds  will 
be reallocated  (for  example  from  prevention to care).  For example, Brazil's  government 
has guaranteed AIDS patients complete funding  of ARV. The drugs alone will cost Brazil 
$700  million  in  1998 or  4% of  the Ministry  Of Health's  budget.  This  represents  more 
than twice what the international community spends each year on AIDS prevention in the 
developing world. 

Countries such as South Africa,  Botswana, Zimbabwe or Thailand have a policy to make 
the  short  cause  of  AZT  available  for  seropositive  pregnant  women  and  are prepared  to 
strengthen the health services where needed in order to make this possible. 

However  in countries where  STD's and tuberculosis  (TB) are not  adequately treated the 
idea  of  starting  a  national  HIV/AIDS  screening  and  treatment  programme,  or  national 
HIV  treatment  in  general  seriously  needs  to  be  reconsidered  at  national  policy  level. 
Some of these interventions could be  financed  and carried out by the private sector or by 
NGO's  in  countries  where  governments  have  more  pressing  priorities,  and  where  such 
policies could not yet be implemented at the national level. 

For example, the first policy implication of the Thai trial on mother to child transmission 
could  be  that  an  individual  woman who knows  that  she is HIV  positive, has  fully  been 
counselled,  has  the  resources  to  purchase  AZT,  and  is  willing  and  able  to  forgo 

16 

breastfeeding  should be offered  treatment.  It could  also be  suggested  that this could be 
done in the first instance through the private sector or NGO's. 

B. Private and public partnership to develop a vaccine and microbicides 

New  investment  and financial instruments  are needed  to  facilitate  the  development  and 
general  availability of new preventive methodologies  against  HIV/AIDS for  developing 
countries. 

Over  recent  years  several  calls  were  made  to  develop  additional  preventive  methods 
designed  to reduce the specific  vulnerability  of women,  such as a female  condom  and a 
vaginal microbicide.  Responding to this demand, a female  condom was developed  and 
is  now  being  used  by  an  increasing  number  of  women  in  some  countries.  Work  is 
continuing to develop an effective  and affordable  microbicide. 

However,  there  is  a  wide  consensus  that  "in  the  long  term,  the  development  of  safe, 
accessible  and  effective  vaccines  against  HIV/AIDS  holds  the  best  chance  of  limiting, 
and eventually eliminating, the threat of this disease"  (communiqué of G7, Denver,  1997 
-  see  Annex  1).  The  development  of  a  microbicide  and  a  vaccine  encounter  several 
barriers, that can be categorised as scientific, technical, economic and  financial. 

The European  Commission  has in past  and present R&D framework programmes put in 
substantial  efforts  in  developing  vaccine-orientated  AIDS  research  in  Europe.  Major 
efforts  have been invested in large scale facilities providing reagents and animals for HIV 
vaccine trials.  These efforts  will be continued through the newly established Key Action 
II  of  the  FPV's  Life  Sciences  Programme  and  the  specific  activities  of  the  INCO 
programme. 

The scientific  and technical areas 
for the debate will not be further  developed here but 
it is strongly believed that improved  scientific  leadership and co-ordination could make a 
qualitative difference  and allow  faster and more efficient  progress. 

The economic  and financial issues are of more specific  concern  for  this  Communication 
on  increased  international  solidarity  and  will  therefore  be  developed  here. 
In  the 
development  of  new  products,  the  traditional  division  of  funding  responsibility  is 
between the public sector supporting pure research, and the private sector supporting the 
development  of commercial  applications. However, the fundamental  issue is that there is 
insufficient  investment  by  the  private  sector  in  developing  microbicidal  products  or 
vaccines  protecting  against  HIV/AIDS,  as  a  result  of  the  perception  of  inadequate 
purchasing power in developing countries. 

Private sector spending on research and development  of an AIDS vaccine for  developing 
countries  is  inadequate.  Evidence  suggests  that  existing  marked-based  incentives  are 
biased  in  favour  of the development  of AIDS treatments, which  are products with weak 
external  benefits  demanded  by  high  income  AIDS  patients,  as  opposed  to  the 
development of a microbicide or vaccine which are products with large external benefits, 
especially for residents of developing countries. 

Total  global  research  and  development  for  preventive  HIV  vaccines  in  both  the  public 
and  private  sectors  in  1993  was  estimated  by  the National  Institute  of  Health  (NIH) at 
$160  million,  which  is  less  than  7 percent  of  annual  global  research  and  development 

17 

expenditure  on HIV/AIDS.  Within  the total  of  $160 million  spent  on vaccine  research, 
only $5 million per year is spent on vaccines for potential use in developing countries. 

By contrast, there is far less uncertainty about the market and profitability  of research on 
medicines  to  treat  HIV/AIDS.  Three  million  of  the  people  infected  world-wide  live  in 
industrialised  countries  where  individual  or  insurance  purchasing  power  is  high.  The 
global market  for medicines for  HIV/AIDS and related infections  in  1995 was estimated 
at $1.3 billion. 

The recent history  of the development  of other products, such as hepatitis vaccines, has 
demonstrated that those products are not widely purchased by individuals or governments 
in  developing  countries.  One  or  two  decades  ago, the  international  community  argued 
for  investments  in those products because  of the  serious consequences  of those  diseases 
in developing countries and the potentially high cost-benefit  ratio of such products.  The 
reluctance of the international bio-medical industry to invest heavily in products destined 
for markets in developing countries is entirely understandable in the light of this history. 

The  creation  of  a particular  special  research  fund  is probably  not  a solution  and  would 
add to the dispersion of ongoing efforts.  Additional funding  of pure research would have 
only a small  effect  on the incentives  facing  the private sector in incurring the high costs 
and high risks of developing an AIDS vaccine.  What is needed is a financial  mechanism 
ensuring  that  when  vaccines  appropriate  for  developing  countries  are developed  by  the 
private  sector,  there  will  be  adequate  purchasing  power  in  the  market  to  enable  the 
private firms to recover the costs of their development and production. 

Given  the  weakness  of  purchasing  power 
in  developing  countries  themselves, 
international public investment is needed to provide that guarantee of a sufficient  market. 
Since the product itself does not yet exist, innovative mechanisms to assure a market  for 
a  hypothetical  product  are  required. 
In  this  context  the  International  AIDS  Vaccine 
Initiative (IAVI), the World  Bank (as announced  in the policy  research report on AIDS) 
and  the  preparatory  group  for  the  G-8  (Group  of  eight  most  industrialised  countries) 
meeting  in  Birmingham  are  making  interesting  proposals  to  create  new  international 
solidarity instruments.  One particularly  attractive  idea under consideration  is the notion 
of  a contingent  purchase  fund,  whereby  donors  issue promissory  notes  for  a number of 
years  ahead, to be drawn  down  for  vaccine purchase in the event that the conditions  are 
met, of a safe and effective  vaccine suitable for use in developing countries. 

C. Modalities of  new international solidarity instruments 

It is recognised that the creation of new solidarity instruments  at international level could 
only help if the purpose was well focused  and collectively prepared.  Problems which are 
related  to  the  weakness  of  the  economy  and  the  social  sectors  in  many  developing 
countries  cannot  be  solved  through  the  creation  of  specific  funds  at  international  level. 
Furthermore,  it  is  important  to  realise  the  difficulties  of  increasing  solidarity  at 
international  level  in  a  period  of  budgetary  constraints  at  national  and  regional  level 
world-wide.  It  would  also  not  be  an  answer  to  the  lack  of  rapid  progress  in  donor  co 
ordination and collaboration within the EU and the international community. 

Extra  public  funds  will  have  to  be  mobilised  within  the  context  of  international 
budgetary  constraints  and  the  relative  decrease  of  funds  available  for  development  in 
general.  In  the  EC  context,  a  reallocation  of  funds  in  order  to  increase  spending  on 
KIV/AIDS related  activities will have to be discussed with the budgetary authorities but 

18 

also  with  our  developing  countries  partners  (for  example  in  the  context  of  the 
(re)negotiations of future conventions post Lomé).  Funds  which  were  not  used  from 
previous EDF's could for example be proposed to be used by a new funding  instrument. 

Funds could be mobilised through two main mechanisms at EC level: firstly through the 
EIB  (European  Investment  Bank),  and  secondly  through  European  NGO's  and 
foundations.  EIB  funds,  which  are  traditionally  applied  to  market  oriented  operations, 
might be used in drug manufacture  and distribution. NGO's  and  foundations  could raise 
funds  from  the citizens of European countries to provide care for HIV/AIDS patients  in 
the developing countries. 

Other options for raising funds include: 

•  Contributions by pharmaceutical companies. Discussions are being held by UNAIDS 

•  A  special  tax  raised  as  a  percentage  of  the  price  paid  for  drugs  in  Europe  to  be 
transferred  to  the  fund  by  the  European  country's  national  security  system  or  to  the 
pharmaceutical  industry.  At  this  stage,  such  options  seem  difficult  in  view  of  the 
problems  encountered  by  the  social  security  systems  in  Europe  and  the  already  high 
taxes paid by European citizens. 

•  Voluntary  contributions  from  health  insurance  systems  in  Europe.  The potential  for 
this  option  appears  limited  as  in  many  countries  statutory  rules  would  exclude  this 
kind of transfer. 

•  Contribution  from  philanthropists.  These  would  have  to  be  linked  to  tax  relief  but 
could  be  available.  Some  potential  names  were  put  forward  in  the  communications 
from Abidjan, but need to be confirmed. 

V:  THE SPECIFIC CONTRIBUTION OF THE  EC 

The EC's  programme  on AIDS  in developing  countries is committed to further support 
countries to finance the priorities as detailed in Chapter II. 

This is to be seen in the context of the EC's efforts  to strengthen the social sectors and  to 
alleviate  poverty  alteration  through  greater  efficiency  of  public  finances  and  equity 
concerns. 

It  is  argued  that  the  EC's  instruments  to  finance  priorities  for  the  relevant  areas  in  the 
health  sector  at  country,  regional  and  international  level  are  largely  adequate  and  in 
equilibrium  with  the  human  resources  available.  Any  new  effort  would  have  to  be 
additional to these instruments and activities, as outlined in Chapter III. 

A. What is to be financed by  additional  EC resources? 

New  additional  finance  resources  could  best  be  used  for  the  purchase  of  additional 
commodities  to prevent HIV/AIDS and to care for people with HIV/AIDS.  This  should 
have two  components,  i) to  support  countries  to purchase  existing  commodities,  and  ii) 

19 

internationally to leverage further  investment by the private sector in developing vaccines 
and microbicides. 

B. The main commodities which could be purchased 

1. Commodities that already exist 

•  AZT in monotherapy for pregnant seropositive women 

•  medicines for STD's, tuberculosis and other opportunistic  infections 

•  anti-retroviral therapy for pilot testing in a few countries selected by UNAIDS 

2. Commodities still to be developed 

•  vaccines and microbicides 

In  this  context,  more  detailed  work  is  needed  in  a  2nd  stage  and  jointly  with  other 
development  partners  to  look  into  the  possibilities  of  creating  a  fund  which  could 
leverage  investment  by  i)  the  private  sector  to  develop  such  products,  and/or  ii)  the 
countries to test these products once available.  The World Bank is presently  examining 
the different  options for this. 

C. A framework for what would be financed by new  additional resources 

It  is proposed  that the commodities  mentioned  under B.l.  are procured  and financed by 
and through the national medicine systems in the respective developing countries. 

However  the  EC's  additional  resources  could  provide  funds  for  pilot  testing  and 
purchasing of these commodities. The country involved could then start with a revolving 
fund  to procure those commodities in a sustainable way. 

A different  choice can be made  for the different  products.  For example, vaccines, once 
available,  could  be  subsidised  for  a  certain  time  in  a  degressive  manner  whereas 
microbicides will probably be cheap enough for the majority  of persons to pay for  them 
themselves. In that  case it could  still be beneficial  however to provide  a facility  for  the 
poorest  and  the higher risk persons to  access the commodity  through  a targeted  system 
such as  vouchers. 

Regarding  monotherapy  with  AZT  for  pregnant  women  and  treatment  for  STD's, 
tuberculosis  and other opportunistic infections  it is proposed to help countries to procure 
these  medicines  through  the  essential  drugs  system  and  to  finance  the  start  up  of  the 
system as well as subsidise the medicines for a certain period, if it can be ensured that the 
poorest would be targeted through adequate systems. 

Concerning  combination  anti-retroviral  therapy,  it  is  proposed  that  some  additional 
resources be used  for  testing of such products  in a few  countries  selected by UNAIDS. 
The provision  of the medicines  could be carried  out by private companies  involved  and 
the  EC  could  provide  for  funds  of notably  technical  assistance  to  monitor  and  evaluate 
the pilot phase and to disseminate the lessons learned.  This evaluation could draw easily 

20 

on  experience  accumulated  by  European  research  groups  during  projects  involving  the 
set-up of these treatments in Europe and elsewhere. 

The  additional  financial  resources  could  furthermore  be  used  to  set  such  a  system  in 
place, test  it  and help  develop national policies  concerning  all those commodities,  their 
financing  and the quality control required. 

D. How  are the funds  be provided to the countries? 

Additional  finances  could  be  provided  to  the  national  budgets  of  developing  countries 
which would be allocated on the basis of action plans, and which include the  guarantees 
for  conditions to be in place  as required  and  specified  further.  Detailed  modalities  and 
criteria will have to be examined at a later stage. 

E. Some examples of conditions to be in place for the use of the EC's budget support 
at country level. 

1.  Medicines already available on the market 

The provision of those products should be integrated  in the overall  system of procuring, 
financing and  distributing  all  essential  drugs  in  the  country.  The  national  plan  should 
include  provision  for  subsidies  or  cost  recovery  in  harmony  with  the  policies  of  the 
country. 

2. Products not yet available 

a)  Vaccines 

•  an integrated HIV vaccine policy should be in place. 

•  a  sustainable  plan  should  be  proposed  to  ensure  longer  term  viability  including 

financing  mechanisms 

b) Microbicides 

Similar  to  above but probably  less  stringent  as it  might  be  an  over  the counter  product 
rather than a medicinal product 

F. Modalities for  mobilising additional resources at the EC level 

Once  an  agreement  has  been  reached  on  the  purposes  of  the  new  debate  around  the 
present  communication,  several  options  could  be  available  to  implement  the  initiatives 
described above: 

Funding could be provided from different  sources (budgetlines and EDF) which allow the 
use of resources for aids related activities in developing countries. 

21 

VI:  MANAGEMENT  OF  NEW 

INTERNATIONAL  SOLIDARITY  INSTRUMENTS 

A. International  level. 

UNAIDS  has  a  global  responsibility  in  the  monitoring  of  all  these  initiatives  in  the 
normative and ethical domains, and the EC supports this position.  If new instruments at 
the international level are set up, it is understood that they would be managed by existing 
organisations with adequate technical capabilities and capacities. 

B.  National  management  of  finances  to  provide  commodities  for  developing 
countries 

The international  community has the responsibility to assure that they are achieving their 
stated purposes and not having any perverse effects  on the existing health care systems or 
on preventive  efforts. 

However, in general, it is crucial that the main decisions about systems and priorities  for 
subsidised  or  other  care  should  remain  in  the  developing  countries  because  the 
effectiveness,  affordabilility,  equity  and  sustainability  concerns  are primarily  a  national 
responsibility.  External  interventions  may  nevertheless  strengthen  national  efforts  in 
these areas. 

C. Monitoring 

It  is  crucial  to  set  up  and  finance  a monitoring  system  that  can  capture  any  impact  of 
these initiatives on the rest of the health sector whether they are positive or negative. This 
could be done as follows. 

In conjuncture with any pilot programme to introduce medicines including ARV  therapy 
in  a  very  poor  setting,  a  responsible  international  institution  funding  country-level 
implementation would first do baseline surveys on the health system in the vicinity of the 
pilot  programme  to  determine  the  quality  and  accessibility  of  curative  care  and  the 
distribution of financial and human resources to the introduction  of the programme. The 
same  surveys  could  then  be  conducted  after  6  months  during  the  implementation.  For 
ARV, the results of these surveys could then be monitored to assure that funds  allocated 
to provide ARV therapy to AIDS patients are spent in such a way so as to: 

a)  Maximise  patient  compliance,  thereby  minimising  the risk that  ARV  therapy  would 
create new, drug resistant  strains to HIV which could subsequently  spread throughout 
the entire world. 

b) Minimise the diversion of human and financial resources  from: 

•  The prevention of AIDS 

•  The prevention of easy to prevent fatal illnesses like measles 

•  The  treatment  of  curable  illnesses,  including  the  easily  treated  opportunistic 

infections  related to HIV. 

22 

D. Regarding  management  of  new  international  financing  instruments  for  the 

testing and purchase of vaccines for developing countries 

It is proposed  that the international  community  of donors collaborates  with  existing  and 
new  mechanisms.  The  EC  would  be  ready  to  participate  in  this  process.  Detailed 
modalities will have to be further  analysed and discussed at later stages. 

VII:  CONCLUSION  ABOUT  INTERNATIONAL  CO-OPERATION  AND  THE  EUROPEAN 

COMMUNITY'S SPECIFIC CONTRIBUTION 

It goes without  saying that no single nation alone, nor any group of nations, can provide 
effective  solutions to the problems created by  HIV/AIDS. Rather it is crucial to secure a 
high degree of international  co-operation  if the world community  is to have a chance of 
finding  just  and  sustainable  solutions  and  of  achieving  both  intergenerational  and 
intragenerational equity on economical and political terms. 

At the international level, UNAIDS must take global responsibility for any new solidarity 
initiatives.  Though  new  mechanisms  are  welcomed  it  is  highly  important  that  their 
financing is additional to existing efforts  to confront  HIV/AIDS. 

Over  the  past  10  years,  the  Community  has  been  playing  an  important  part  in 
international action in the field of AIDS and plans to continue to do so. 

•  Regarding  HIV/AIDS control, a European Community commitment was made by the 
Commission to reinforce  actions to stabilise and minimise the spread of the epidemic 
in most of the developing countries in the next decade. 

•  Regarding health services, including those dealing with people infected  with HIV, the 
Community's commitment to support developing countries' efforts  to strengthen  their 
health  systems and  focus  on sustainable effective  systems mainly  for the poorest will 
be a major  task  for  next decades.  The Community is also proposing to make greater 
efforts  to  implement  new  strategies  faster  and  more  effectively  jointly  with  all  its 
partners.  Furthermore,  it  will  additionally  give  renewed  attention  to  developing 
appropriate medicines systems in the countries requesting support for HTV and include 
appropriate care for AIDS. 

•  We are at the turning point in the action related to HIV/AIDS in developing countries. 
The  lack  of  effective  vaccines, the  lack  of  accessibility  to  medicines  for  STD's  and 
opportunistic  infections  (including  TB),  and  the  recently  discovered  anti-retroviral 
therapy  is  at  the  heart  of  the  concerns  world-wide  and  especially  in  the  poorest 
developing countries  affected. 

The EC is committed to  renew its existing efforts  in order to ensure a decline in  infected 
persons in most of the developing countries where able to give support. 

Furthermore,  new  additional  efforts  and  additional  financial  resources  of the  EC  could 
be concentrated  in two areas: 

©  at the country level to purchase commodities once they  are on the market 

o  at the international level to leverage further  investment of the private sector to develop 

and purchase vaccines and/or microbicides 

2.1 

ANNEX  1 

1) Regulation for AIDS budgetline: "Art. 2b": 

" Studying ways and means of improving  access to treatment  for people infected  with 
HIV  in the  poorest  countries.  This  study  should  be  conducted  in  close  collaboration 
with the United Nations  agencies, concerned NGO's, pharmaceutical  laboratories and 
the Members States of the European Union." 

2)  Luxemburg Council: 

"Le  Conseil  européen  demande  à  la  Commission  d'étudier  les  modalités  de 
l'établissement  d'un  fonds  de  solidarité  thérapeutiques  sous  l'égide  de  l'ONUSIDA 
destiné à la lutte contre le SIDA dans les pays en voie de développement" 

3)  Parliament ACP document amendment: 

"rappelle  à  la  Commission  que  le  Conseil  européen  de Luxembourg  lui  a demandé: 
d'étudier  les modalités de l'établissement d'un fonds  de solidarité thérapeutique sous 
l'égide  de  l'ONUSIDA  destiné  à  la  lutte  contre  le  SIDA  dans  les pays  en  voie  de 
développement"  et  demande  à  la  Commission  de  prévoir  la  mise  en  oeuvre  de  ce 
fonds dans le cadre de la prochaine convention." 

4)  G8 in Denver: 

" Preventing  the  transmission  of  HIV  infection  and  the  development  o  ADDS is  an 
urgent global public health imperative. While other prevention and treatment  methods 
must  be  pursued,  in  the  long  term  the  development  of  safe,  accessible  and  effective 
vaccines  against  AIDS  holds  the best  chance  of  limiting  and  eventually  eliminating, 
the  threat  of  this  disease.  We  will  work  to  provide  the  resources  necessary  to 
accelerate  AIDS  vaccines  research  and  together  will  enhance  international  scientific 
cooperation and collaboration" 

5) UNAIDS statement on mother to child transmission (23-24 March 98): 

" A global effort  is needed to promote the updating  and scaling up of interventions  to 
prevent  mother  to  child  transmission  of  HIV.  Furthermore,  there  is  on  ethical 
imperative  to  support  the  introduction  of  the  shorter  AZT  (zidovudine)  regime  in 
countries  in which trials have been completed  and to encourage  such interventions  in 
countries which have capacity and willingness to support them" 

6) WORLD BANK: Vaccine Purchase Fund: 

This initiative seeks to assure industry of a commercially viable market in developing 
countries  by  establishing  an  international  Vaccine  Purchase  Fund.  Such  a  fund  can 
create  a guaranteed  paying market  in the developing  world  of known  minimum  size. 
By  encouraging  industrial  investment  in vaccine  development,  the Vaccine  Purchase 
Fund  could be financed by current country or donor funds,  or by a guaranteed  line of 
credit through the World Bank. Ten to  15 participating countries, providing  $50-$ 100 
million  each,  would  create  a  $0.5-$1.0  billion  dollar  developing  country  vaccine 
market.  Funds  would  only  be  made  available  to  purchase  a  vaccine  once  it  was 

24 

successfully  developed. A World Bank line of credit conditional loan is a particularly 
attractive  approach as current funds allocated to HIV  could continue to be used  for 
prevention  and  treatment  until  a  vaccine  was  developed.  Ultimately,  having  funds 
available for purchase will be essential for assuring vaccine availability, but by itself 
will  most  likely not be sufficient  to  fully  overcome the reluctance of major vaccine 
companies to invest in developing HTV vaccines for low income countries. 

7) UMAfl>S: HIV drugs access initiative pilot project on providing wider access. 

ONUSIDA: lance l'initiative visant à améliorer l'accès aux médicaments pour la prise 
en charge de l'infection au VIH et du SIDA dans les pays en voie de développement, 

"En  raison  de  l'ampleur  et  du potentiel  de  destruction  massive  et  durable  dus  au 
SIDA, il est encore plus urgent et prioritaire de renforcer et d'actualiser les systèmes 
de prestations de soins de santé. L'initiative de l'ONUSIDA lance un phase pilote qui 
englobe  la mise en oeuvre et le suivi de nouvelles stratégies destinées à éliminer les 
obstacles entravant l'amélioration de la prise en charge de VIH/SIDA et se déroulera 
au  Chili,  en  Côte  dTvoire,  en  Uganda  et  au  Vietnam,  pays  qui  permettent  une 
évaluation  adéquate  de  l'initiative  dans  des  contextes  géographiques,  sociaux, 
culturels, économiques et structurels très divers" 

ISSN 0254-1475 

COM(98) 407 final 

DOCUMENTS 

EN 

05  11  15  16 

Catalogue  number  :  CB-CO-98-421-EN-C 

ISBN 92-78-37558-6 

Office  for Official  Publications of the European Communities 

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