About 40 million people globally were living with HIV/AIDS as of December 2003, most of them in sub-Saharan Africa; few have access to treatment. Propelled by recent advances in ARV treatment, PEPFAR is the first U.S. program to seek to dramatically expand HIV/AIDS treatment in resource- poor settings. PEPFAR builds on U.S. bilateral efforts begun in June 2002 to prevent mother-to-child transmission of HIV during pregnancy, labor and delivery, and breastfeeding. In May 2003, P.L. 108-25 established the position of the U.S. Global AIDS Coordinator to lead the U.S. response to HIV/AIDS abroad; the Senate confirmed the Coordinator in October 2003. The office received its initial appropriation in January 2004. About two-thirds of those infected with HIV live in sub-Saharan Africa. More than 50 percent of all HIV infections in the world, and nearly 70 percent of HIV infections in Africa and the Caribbean, occur in the 14 PEPFAR countries. According to WHO, less than 7 percent of the HIV- infected people in need of ARV drugs were receiving them at the end of 2003. UNAIDS reports that about 3 million people died from AIDS in 2003, the vast majority of them in sub-Saharan Africa. The disease has decimated the ranks of parents, health-care workers, teachers, and other productive members of society in the region, severely straining national economies and contributing to political instability. Propelled by recent advances in ARV treatment, PEPFAR is the first U.S. program to seek to dramatically expand HIV/AIDS treatment in resource- poor settings. In the 1990s, medical experts found that new forms of treatment, involving a combination of three drugs, were effective in suppressing the virus and thus slowing progression to illness and death. According to medical experts, data from Brazil, Uganda, and Haiti showed that patients in resource-poor settings adhere well to this complex drug regimen. Adherence to ARV treatment is important: if patients do not take the drugs properly or consistently, the virus in their bodies may become resistant to the drugs and the drugs will cease to be effective. The treatment must continue for life. Since 2000, the price of ARV drugs has dropped considerably, from a high of more than $10,000 per person per year to a few hundred dollars or less per person annually, owing in part to the increased availability of generic ARV drugs and public pressure. In addition, some generic manufacturers have combined three drugs in one pill—known as fixed-dose combinations, or FDCs—thereby reducing the number of pills that patients must take at one time. While major multilateral and other donors allow recipients of their funding to purchase these FDCs, the Office of the U.S. Global AIDS Coordinator currently funds only the purchase of drugs that have been approved by a “stringent regulatory authority,” citing concerns about the quality of drugs that have not demonstrated safety and efficacy to such an authority. Presently, only brand-name drugs meet this standard. As a result, the Coordinator’s Office does not now fund the purchase of generic ARV drugs, including FDCs. However, on May 16, 2004, the HHS Secretary announced an expedited process for reviewing data submitted to the HHS/Food and Drug Administration (HHS/FDA) on the safety, efficacy, and quality of generic and other ARV drugs, including FDCs, intended for use under PEPFAR. To date, only more developed countries have offered ARV treatment on a massive scale. The planned expansion of treatment to millions of people in developing countries under PEPFAR coincides with international efforts to increase the availability of treatment to HIV-infected people in poor countries. These efforts include the launch of the Global Fund in January 2002 and a campaign by WHO, announced in 2003 on December 1 (World AIDS Day), to provide access to ARV treatment to 3 million people by the end of 2005, commonly referred to as the “3 by 5” campaign. (See app. III for more information on global, including U.S., HIV/AIDS funding.) PEPFAR’s goal is to initiate ARV treatment for nearly 2 million people in the 14 targeted countries by 2008. As of February 2004, a total of 78,921 people, or about 4 percent of that goal, were receiving ARV treatment in these countries (see fig. 1). On April 25, 2004, to synchronize international efforts, the Global AIDS Coordinator and his counterparts from UNAIDS, the World Bank, the Global Fund, and other bilateral donors voiced their support for an international agreement to abide by the following principles: (1) that there be one agreed-upon framework for coordinating HIV/AIDS activities among all donors and other partners in each recipient country; (2) that each recipient country have one national AIDS coordinating authority; and (3) that each recipient country have one system for monitoring and evaluating AIDS programs. PEPFAR builds on U.S. bilateral efforts begun in June 2002 under another presidential initiative that focused on preventing mother-to-child transmission (PMTCT) of HIV during pregnancy, labor and delivery, and breastfeeding. This $500 million initiative, formally known as the International Mother and Child HIV Prevention Initiative, and more commonly referred to as the PMTCT Initiative, focused on the same 14 countries as PEPFAR. According to administration officials, the countries were selected based on the severity of their HIV/AIDS burden, the extent to which they have a substantial U.S. government presence, the effectiveness of their leadership, and foreign policy considerations. The initiative focuses on treatment and care for HIV-infected pregnant women and provides a short course of ARV treatment that has been shown to be 50 percent effective in lowering the risk of transmission of the virus in breast-feeding mothers. With the establishment of the Coordinator’s Office, PMTCT Initiative funding and activities were included in PEPFAR. (See fig. 2 for a timeline of international and U.S. efforts to combat HIV/AIDS worldwide.) The agencies primarily responsible for implementing PEPFAR are the State Department, where the U.S. Global AIDS Coordinator is based and reports directly to the Secretary of State; USAID; and the Department of Health and Human Services (HHS). The Coordinator plays an overall coordinating role, and the State Department raises HIV/AIDS issues through diplomatic channels and public relations campaigns. USAID maintains overseas missions in 12 of the 14 PEPFAR focus countries, with personnel trained in procurement and managing grants to foreign entities; it works with NGOs and other entities. HHS’s overseas presence is focused on providing technical assistance and is more recently initiated. HHS/CDC provides clinicians, epidemiologists, and other medical experts who generally work directly with foreign governments, health institutions, and other entities. Within HHS, PEPFAR also draws on expertise from the National Institutes of Health/National Institute of Allergy and Infectious Diseases, which is involved in HIV/AIDS research in PEPFAR focus countries; the Health Resources and Services Administration, which has experience expanding HIV/AIDS and other health services in resource-poor settings in the United States and is providing some assistance in several PEPFAR focus countries; and the Office of the Secretary/Office of Global Health Affairs, which plays a coordinating role on HIV/AIDS within HHS. Other agencies involved in PEPFAR are the Department of Defense, which works on HIV/AIDS issues with foreign militaries, helps construct health facilities, and conducts some research and program activities in PEPFAR focus countries; the Peace Corps; and the Departments of Labor and Commerce, which are involved in HIV/AIDS-related activities in the workplace and with the private sector, respectively. (See fig. 3.) In May 2003, the U.S. Leadership Act established the position of the U.S. Global AIDS Coordinator “to operate internationally to carry out prevention, care, treatment, support, capacity development, and other activities for combating HIV/AIDS;” the Senate confirmed the Coordinator in October 2003. (See app. IV for detailed information on the structure of this office.) The Coordinator has been granted authority to transfer and allocate the funds appropriated to his office among the U.S. agencies implementing PEPFAR in the 14 focus countries and additional bilateral HIV/AIDS programs in other countries. The U.S. Leadership Act authorizing PEPFAR states that not less than 55 percent of the amount appropriated pursuant to section 401 of the act is to be spent on treatment and that at least three-quarters of that amount should be spent on the purchase and distribution of ARV drugs for fiscal years 2006 through 2008. Of the remaining 45 percent, 20 percent should be spent on prevention, 15 percent on palliative care, and 10 percent on orphans and other vulnerable children. Congress appropriated $488 million for the Coordinator’s Office in fiscal year 2004, and the President requested $1.45 billion for fiscal year 2005. The office was formally established in January 2004. It created three mechanisms, or funding “tracks,” to allocate money: track 1, track 1.5, and track 2. Tracks 1 and 1.5 are one-time mechanisms that rapidly allocated funds to expand ongoing activities through Washington, D.C.-based multicountry awards and locally based country-specific awards, respectively. Track 2 serves as an annual operational plan for each country. A portion of the funds for tracks 1 and 1.5 were obligated by a target date of January 20, 2004 and the remainder were obligated by mid-February following congressional notification; budgets for track 2 were submitted to the Coordinator’s Office for review on March 31, 2004, and approved on a rolling basis through early May. Pending congressional review, the Coordinator’s Office expects that agencies will have begun to obligate these funds by the end of June.