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Many currently believe that US domestic entitlements are too large, but disregard the fact that the PEPFAR program has created a new class of moral entitlements overseas – in the form of 4 million and counting people receiving US-supported life-sustaining AIDS treatment in low and middle income countries around the world.  Of course, the approximately $2.7 billion that the US spent in 2011 (53% of the $5.3B 2011 budget) on supporting the treatment of these people is only about two-tenths of a per cent of the US’s annual expenditure on Social Security and Medicare.  But I think the US has just as much fiduciary and moral responsibility to anticipate and plan for its current and future AIDS treatment entitlements overseas  as it does for its much larger Social Security and Medicare entitlements at home.

The US government recently announced its dedication to continue to pursue the objective of an “AIDS-free generation,” a laudable goal which I hope we see in my children’s’ lifetime.  However, before we can get there, we must first reach the tipping point where the number of people living with HIV/AIDS begins to decline.  In the absence of a cure for AIDS, that can only happen when we succeed in suppressing the number of new infections below the number of deaths.  Unfortunately, the latest UNAIDS numbers for Africa confirm that the number of annual new infections in Africa continues to exceed the number of deaths – and the gap is widening.  As the chart shows, the annual increase in the number living with HIV/AIDS (the excess of new infections over deaths, or the red line in the graph below) has itself more than doubled since 2005.

The objective proposed by the new PEPFAR blueprint is to reduce new infections below the number of people newly added to treatment in a given year. But this isn’t good enough, because the total number of people in low and middle income countries who are living with HIV/AIDS and dependent on the US and other donors for their daily medication would continue to grow – along with the moral entitlement to support these people on treatment.

Moving forward, I suggest that the US should figure out how to convert the moral entitlements it has already granted into credible long-term enforceable commitments which are more analogous to the commitments it makes to Social Security beneficiaries in the US.  My logic is that unless there is a lower bound to the US commitment in an individual recipient country, the recipient government will have little financial incentive to contribute its own scarce resources to AIDS treatment, because every penny it contributes might well be offset by the withdrawal of US resources.  (Even if the Obama administration means to continue funding this treatment, future administrations are entirely too free to renege.)  But just as the US must reform Social Security and Medicare to clearly establish a more sustainable upper bound for future payments, the US should clearly establish and communicate an upper bound to the US commitment to AIDS treatment in every beneficiary country.  The combination of the long-term commitments to a lower and upper bound on US contributions will change the incentive structure in recipient countries, establishing that the recipient country is responsible for the balance of the treatment need – and that the country has much to gain financially as well as through improved health of its citizens by implementing effective HIV prevention as rapidly as possible.

The recommendation in my book, “Achieving an AIDS transition,” is that, in addition to all the patients the US has started supporting, the US should commit to support a fixed percentage of the new treatment need in each recipient country, which might vary from 20% to 80% depending on the country.  The US government would have to plan how much would be required to meet each percentage point of need in each country and choose what percentage it intends to finance in every country to fit within the US’s projected future budget for AIDS treatment overseas.  But such an arrangement would assure continued US support and generate strong incentives for the country and its citizens to improve their HIV prevention efforts.

The pressure is on for the US government to cut spending.  In this environment, vague statements of administration support for meeting its moral commitments to AIDS patients in other countries provide unfair and perverse incentives to recipient government partners and provide insufficient guidance to Congressional and Administration budget cutters.  The White House should append the blueprint just released with a firm multi-year commitment to AIDS treatment specific to every recipient country.

Graph above is created from UNAIDS data accessed on December 3rd, 2012 from the AIDSinfo database. Here is the Stata code to replicate the graph.

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CGD blog posts reflect the views of the authors drawing on prior research and experience in their areas of expertise. CGD does not take institutional positions.