Cost-Effectiveness of HIV Prevention in Developing Countries

HIV InSite Knowledge Base Chapter
Published September 2002
Elliot Marseille, DrPH, MPP, University of California San Francisco
Stephen F. Morin, PhD, University of California San Francisco
Chris Collins, MPP, Progressive Health Partners
Todd Summers, Progressive Health Partners
Thomas J. Coates, PhD, University of California San Francisco
James G. Kahn, MD, MPH, University of California San Francisco

Why Cost-Effectiveness Analysis?
Cost-Effectiveness Analysis: Basic Theory
Assessing Cost-Effectiveness Analyses
HIV Prevention Cost-Effectiveness: Findings for Developing Countries
Sex Worker Interventions
Sexually Transmitted Disease Control
Voluntary HIV Counseling and Testing
Male Condom Promotion
Female Condom Promotion Among Women at High Risk of HIV Infection
Improving Blood Supply Safety
Prevention of Mother-to-Child Transmission
Nevirapine Study
Intervening With Injection Drug Users
Antiretroviral Drugs: A New Frontier for Prevention?
Directions for Future Research
Table 1: Cost-Effectiveness of HIV Prevention Interventions in Sub-Saharan Africa
Figure 1: HIV Cases Averted per 1,000 Sex Workers Through Female Condom
Distribution, by HIV Prevalence in Sex Workers and Their Clients
Cost-Effectiveness of HIV Prevention in Developing Countries


This chapter posits that HIV prevention interventions in developing countries can reduce
the incidence of HIV infection and sometimes save financial resources in the process. It
also provides an overview of the basic theory underlying cost-effectiveness analysis.
Although the chapter focuses on prevention, treatment and research are also
indispensable to addressing the epidemic; these three tracks must be viewed as
inseparable components of the overall response to the AIDS pandemic.
Why Cost-Effectiveness Analysis?

Despite the widely acknowledged severity of the global HIV crisis, resources available to
combat the epidemic are severely limited. The combined contribution of official
international aid for HIV prevention and treatment from the 22 rich nations of the
Organization for Economic Cooperation and Development (OECD) is well below 3% of
the amount needed to stem the pandemic.(1) Because resources are currently so
constrained, it is imperative that available funds be spent for interventions that are cost-
effective, ie, interventions that avert a high number of HIV infections compared with
alternative uses of the funds.(2) Over time, cost-effectiveness information can also
support the rational allocation of resources as funding is scaled up to more closely match
real need. By increasing the likelihood that new funds will be spent efficiently, cost-
effectiveness analyses may also strengthen the political will to commit these funds.(3)
Cost-effectiveness analysis can guide the policy process in several specific ways. First,
because it is ultimately about choosing among alternatives, cost-effectiveness analysis
requires a clear description of all relevant policy options. Such an inventory of options is
otherwise rarely made. Defining the desired outcome (eg, reduction in HIV incidence in a
particular population) can stimulate new thinking about the best means to achieve this
end. It can also help to crystallize the most policy-relevant assessment of intervention
data, for example: "How much behavior change must a program deliver to be
Second, cost-effectiveness analyses take perspective into account. A program that may
not be cost saving nor even cost-effective to a particular governmental agency may
nonetheless be desirable from a societal perspective. This shifts the terms of the policy
debate away from narrow fiscal effect on a particular governmental entity and toward a
broader assessment of societal good, including possible savings to the national budget. In
this way, cost-effectiveness analysis can move politically moribund alternatives onto the
active agenda.
Third, the importance of politics in HIV does not preclude a role for cost-effectiveness
analysis, but instead means that such appraisals must be compelling enough to influence a
process with many actors and aims. Credible cost-effectiveness analyses can thus be a
means of political persuasion. Rather than supporting a policy decision merely because it
appears to be effective or because it enjoys broad political support, systematic analysis
pushes another and perhaps more useful question to the fore: Is it the best use of available
Finally, and most important, the failure to pursue rational resource allocation is done only
at the peril of overspending scarce prevention dollars on less effective programs, and
underspending on more effective ones. Ultimately these missed opportunities mean lost
These concerns are not hypothetical. Ainsworth and Teokul argue that the failure to
prioritize the scarce resources available to combat AIDS is a major cause of the lack of an
effective response to the pandemic.(4) Rather than focusing on interventions that are
most likely to be effective and cost-effective, governments and donor agencies support
programs that are politically popular and uncontroversial. Almost by definition, these
exclude strategies focused on high-risk groups such as sex workers, men who have sex
with men, and injection drug users. These are precisely the groups most likely to become
infected and to spread the disease into the general population. Recognizing the need for a
scaled-up response, international donors have supported so-called "multisectoral" or
"expanded" programs intended to increase the political and economic resources available
to fight the epidemic. But these efforts too often end up spreading funds over a wide
range of programs with little focus. Also, because they are multisectoral, they bring
agencies into the AIDS arena that may have little relevant experience or competence. The
result again is a lack of priority setting.(4)
Cost-effectiveness analysis cannot and should not substitute for the political process.
Nevertheless, cost-effectiveness information can focus the attention of decision-makers
on the interventions with real potential to contain the epidemic and to aid in setting
priorities within a reduced menu of options. Credible cost-effectiveness analysis can do
this by providing needed information to decision-makers who are already disposed to
focus on interventions that can make a difference. Where this political consensus has not
been achieved, cost-effectiveness analysis can bolster the arguments of those advocating
less popular but more cost-effective strategies. Although political processes, not
economic appraisal, determine policy, cost-effectiveness analysis can help shape the
political agenda.
Cost-Effectiveness Analysis: Basic Theory

A central concern of economics is how best to use available resources in a world where
desires, if not needs, always exceed the capacity to fulfill them. The key concept
informing consideration of this issue is "opportunity cost." Opportunity cost refers to the
concept that use of resources one place precludes their use elsewhere. It is concerned
with real resource consumption, rather than with mere financial effects. Thus, the real
cost of a particular expenditure is the best alternative use of those funds, now foreclosed.
These statements may seem trivial because they devolve to the truism that money spent here cannot be spent there. But, like the prospect of being hanged in the morning, "opportunity cost" focuses the mind wonderfully, and therein lies its utility. It can counteract the bureaucratic tendency to unthinkingly continue this year what worked last year. Thinking about opportunity cost can thus stimulate creativity about the best use of resources given current needs and alternatives. The opportunity cost concept suggests that it is not enough to do something useful with the resources available. Action with a net positive effect is still wasteful if the foregone alternative would have had higher value. It prompts the question, "Because money is limited (budgets are constrained), what is its best use at the margin (the next available dollars)?" Budgets, however, are always constrained, and the margin is the economist's permanent residence, so opportunity cost and the challenge to allocate resources rationally are always present. Opportunity costs and rigorous thinking about resource allocation inoculate decision-makers against the kind of thinking that prompts statements such as, "We are concerned with saving children's lives. Money cannot be a determining factor." What such statements overlook is that "money" is not "mere money" to be subordinated to the saving of lives. Cost is another name for an unrealized benefit somewhere else. That benefit might result in the saving of more children's lives than the use being defended. The problem of resource allocation then becomes, "Where can the greatest benefit be obtained for a given expenditure?" Cost-effectiveness analysis provides a conceptual framework and practical tools to assist with that determination. It is purely instrumental. As with economics generally, cost-effectiveness analysis is value-neutral regarding goal selection. One must look elsewhere to decide what is worth having. Once a goal is determined (eg, reduced HIV incidence), the role of cost-effectiveness analysis is to help reach it with as small an expenditure (opportunity cost) as possible. It is concerned, in other words, with efficiency. The measure of efficiency used in cost-effectiveness analyses is the cost-effectiveness ratio, which is the ratio of program costs to a health-related outcome such as lives saved, life-years saved, or cases of HIV prevented: Cost-effectiveness ratio = (Cost of program - medical and other costs saved) ------------------------------------------------------------ The numerator equals the cost of delivering the intervention minus the medical costs saved by preventing the transmission of HIV and other economic benefits of prevention. The smaller the cost-effectiveness ratio, the more economically efficient the program. One widely used measure of health benefits (the denominator in this equation) is the
Disability-Adjusted Life-Year, or DALY. DALYs gained from an intervention are the
sum of the years of life saved, where each life-year has received a weight to reflect both
quality of life and the economic productivity of that life-year. DALYs provide a common
metric of health benefits that allows for comparison of outcomes from different types of
programs and populations.
The most comprehensive cost-effectiveness measures reflect a societal perspective in
which all relevant costs are counted, regardless of who incurs them. This is standard
methodology(5) and includes the broadest possible assessment of program effects.
However, it is quite possible for an intervention to be cost-effective from a societal point
of view, but still require unaffordable outlays from a ministry of health or other public
health sector payer. The ideal analysis, therefore, would include calculations from the
perspective of both the public health sector payer and society as a whole. If an
intervention is cost-effective from a societal perspective, but not from the payer's
perspective, a case might be made for subsidies or external contributions.
Assessing Cost-Effectiveness Analyses

The results of cost-effectiveness analyses are driven mainly by the assumptions that
underlie them, such as intervention effectiveness or baseline HIV incidence. A jaundiced
extension of this truism is that one can therefore use cost-effectiveness analyses to argue
anything. The best protection against the manipulation of cost-effectiveness analyses is
complete and clear presentation. Although this section cannot inventory all the elements
of a good cost-effectiveness analysis, nor all of the pitfalls that may snare the unwary
consumer of economic appraisals, there are a few general principles. The first and most
important is "No black boxes". In other words, all the key assumptions that drive the
analysis--or, anticipating the consumer, that might be expected to do so--should be
clearly identified and justified. These include both modeling assumptions that determine
how inputs are related mathematically to produce the final cost-effectiveness ratio, and
data assumptions concerning the estimated value of those inputs. A convincing rationale
should be presented for each. Consumers should ask, "Are they appropriate for the
setting? Are they thoroughly examined in the sensitivity analyses where the effect of
changed assumptions on results is studied? Are the estimates derived from reliable
A second rule is "Note the perspective". This means being aware of the level (eg,
individual clinic, agency, national government, society as a whole) at which costs and
benefits are being accounted. This should be made explicit, but often is not. The
consumer should ask, "Is the analytic perspective appropriate to the policy question being
addressed? How might a different perspective change the results?" Cost-effective
interventions, except those that are also cost saving, still require a net increase in funds.
An analysis that assesses only the financial effects on a health care agency or clinic may
conclude that a given intervention is unaffordable. This could happen, for example, if
averted future medical care costs do not accrue to the implementing agency. However,
from the perspective of a higher level of government that does receive the savings in medical cost, the intervention could be cost-effective or even cost saving. A third rule is, "Confront the uncertainties". A good cost-effectiveness analysis presents the results of a "base case" analysis that incorporates the best estimates for each input. These findings are then supplemented by extensive use of sensitivity analyses, which explore how variations in the value of key inputs affect the results. The sensitivity analyses are very useful in determining the range of circumstances in which a given intervention is likely to be cost-effective. These explorations can be instructive in their own right: Figure 1 shows how the number of HIV cases averted by a program of female condom distribution to sex workers (SWs) in South Africa varies according to the HIV prevalence in the client population.(6) Cases averted increase as prevalence rises to 60%. Thereafter, it falls as higher prevalence means fewer HIV-negative susceptibles who can be protected through female condoms. This includes both fewer HIV-negative SWs and fewer HIV-negative clients. A final rule could be called, "Compared to what?" A cost-effectiveness ratio is strictly a relative measure. The finding that an intervention is cost-effective simply means that one can expect as much or more health benefit from spending a given amount of money on that intervention as on alternative uses of the same money in that setting. For example, US$3,000 per case of HIV averted may be cost-effective in one setting but not in another of equal wealth where the portfolio of cheaper programs has not yet been exhausted. The problem is that there is usually little relevant information on the cost-effectiveness of the other options. The analyst is then thrown back on a more general standard of what is viewed as cost-effective in sub-Saharan Africa or in developing countries generally. As more cost-effectiveness information becomes available, it will become possible to tune these comparisons more closely to the specific setting under consideration. In the meantime, the analyst should explain the rationale for using a particular cost-effectiveness threshold. HIV Prevention Cost-Effectiveness: Findings for Developing Countries There is a rapidly growing and compelling body of literature on the efficacy and cost-effectiveness of HIV prevention interventions in resource-poor countries. These studies contain important lessons--not intuitively obvious--about strategies to limit the spread of HIV. For example, one study concluded that the benefit of prevention is highest if programs are introduced when HIV prevalence is still low.(7) This was the case in Senegal, where early and concerted government effort helped to forestall new HIV infections before prevalence escalated. At the end of 1999, the last year for which UNAIDS provides country-level data, Senegal's adult HIV prevalence was 1.77%.(8) Most studies on the cost-effectiveness of HIV prevention emphasize the superior efficiency of targeting high-risk groups over nontargeted interventions. Examples of high-risk groups include sex workers and their clients, others with multiple sex partners, men who have sex with men, and injection drug users. Yet targeting those who are already infected may also be a highly cost-effective strategy for behavioral change interventions. For example, an analysis of voluntary counseling and testing in Kenya and
Tanzania found that cost-effectiveness increased in tandem with the proportion of HIV-
positives in the client population.(9)
Major interventions for which sound cost-effectiveness data are currently available (and
which are applicable to resource-poor settings) include:
sex worker interventions
male and female condom promotion
control of sexually transmitted diseases (STDs)
voluntary counseling and testing
blood supply safety measures
prevention of mother-to-child transmission
Table 1 summarizes the findings of studies conducted in sub-Saharan Africa of six key
HIV prevention interventions. In all cases, the intervention is cost-effective. The sections
below synthesize key findings related to each intervention.
Sex Worker Interventions

Because they have high rates of partner change and because they are frequently likely to
be infected with other STDs in addition to HIV, sex workers (SWs) constitute a group
that should receive high priority for HIV prevention interventions. If transmission in this
group is not interrupted, infection spreads rapidly beyond SWs and their clients to the
wives or sexual partners of the clients (who may not know of this risk and who may be
powerless to act even if they did know). They can in turn transmit infection to their
infants and to the general adult population.
Peer education programs have been shown to be highly effective in reducing transmission
from and to SWs.(10, 11) A 1991 analysis carried out among 1,000 SWs in Nairobi found
that a program of STD control and condom promotion was able to prevent between 8,000
and 10,000 new cases of HIV infection per year.(12) Given the modest cost of the
program, each averted HIV infection costs between US$8 and US$12, demonstrating
extremely high cost-effectiveness. Interventions of this type are competitive with the
most cost-effective HIV and non-HIV public health interventions.
Sexually Transmitted Disease Control
STDs other than HIV, especially those that cause ulceration, significantly increase risk of
HIV transmission upon exposure.(13, 14) Enhanced STD control is therefore a
potentially efficacious and cost-effective HIV prevention strategy. A study of the effect
of STD services on HIV infection rates, conducted in Mwanza, Tanzania, examined the
effects of enhanced STD services (with comparisons to matched communities that did not
receive the intervention).(13-15) This research project demonstrated a statistically
significant effect of enhanced STD services in lowering HIV incidence by 38% over 2
years. The intervention cost US$350 per HIV infection averted or US$13 per DALY
gained. This intervention should be considered highly cost-effective.
Voluntary HIV Counseling and Testing

The most definitive study on both the cost and the cost-effectiveness of voluntary HIV
counseling and testing (VCT) was carried out in the context of a randomized controlled
trial in Tanzania and Kenya.(9) Cost-effectiveness outcome measures included both cost
per HIV infection averted and cost per DALY saved. The study examined changes in the
cost-effectiveness of VCT by variation in the HIV prevalence of the client population. It
also documented the effect of varying the proportion of clients who receive VCT as a
couple compared with individuals. The cost per HIV infection averted was US$249 and
US$346, in Kenya and Tanzania, respectively, and the cost per DALY was US$13 and
US$18, respectively. The intervention was most cost-effective for HIV-infected people
and those who received VCT as a couple.
VCT remained cost-effective across the full range of sensitivity analyses. Analysis of
targeting showed that increasing the proportion of couples to 70% reduces the cost per
DALY saved to US$11 in Kenya and US$13 in Tanzania, and that targeting a population
with HIV prevalence of 45% decreased the cost per DALY saved to US$8 in Kenya and
US$12 in Tanzania. Targeting HIV-infected people is also a highly cost-effective strategy
as they may be more disposed to behavior change than the uninfected. The per-client cost
of VCT reported in this study was US$29 in Tanzania and US$27 in Kenya.(9). These
figures are somewhat higher than other estimates. If these cost estimates from the Kenya
and Tanzania trials exceed those in most other settings, this would suggest that VCT is
even more cost-effective than was reported in this study.
Male Condom Promotion

A number of studies have demonstrated the effectiveness of male condom promotion in
reducing the frequency of risky sex and HIV incidence in high-risk populations.(10, 11)
Other studies document the cost per condom distributed.(16) Although there are no
published studies on the cost-effectiveness of male condom promotion considered as a
stand-alone intervention, male condom promotion is included as an adjunct to a package
of services that also includes peer education and STD control.(12) These programs,
considered as a whole, are highly cost-effective.
Furthermore, a recent analysis of the cost-effectiveness of the female condom (discussed
below) suggests that programs of female condom promotion are likely to be very cost-
effective in areas of high prevalence, even among women with moderate rates of partner
change. Since the female condom costs roughly 10 times as much as the male condom, it
seems quite probable that male condom promotion can be highly cost-effective in most
parts of the developing world with a significant HIV epidemic.
Female Condom Promotion Among Women at High Risk of HIV Infection

A recent study analyzed the cost-effectiveness of the female condom if supplied to a
hypothetical cohort of 1000 SWs in South Africa.(6) The study's major finding was that
this program would generate net savings to the public sector health payer of US$9,163 or
about US$9 per SW served. Sensitivity analyses indicate that the economic findings are
robust across a wide range of values for key inputs. The program generates net savings of
US$5,421 if HIV prevalence in SWs is 25% rather than 50.3% and savings of US$3,591
if each SW has an average of 10 clients per year rather than 25. A program focusing on
non-SWs with only one casual partner would also save money.
Female condoms and male condoms have about equivalent effectiveness in reducing risk
of HIV transmission, but as previously noted, female condoms are far more costly. Cost-
effectiveness results are therefore sensitive to assumptions made about the rate of
substitution between the two types of condoms (ie, the portion of sexual episodes covered
by female condoms that would have been covered by male condoms had the female
condoms not been available). In the base case modeled in this study--which included HIV
prevalence of 50% among the SWs, cost of the female condom of US$0.66 per unit, and
saved life-time HIV treatment costs of US$2,507 per case averted--the substitution rate
was 25%. In other words, 25% of female condoms substitute for male condoms and thus
provide no additional benefits. Cost savings are preserved if HIV prevalence is reduced to
25% or the substitution rate is raised to 75%. Under a scenario that includes both high
substitution rates (75%) and lower HIV prevalence (25%), the intervention no longer
actually saves money but retains its cost-effectiveness (US$454 per case averted). These
results assume no reuse of the female condom.
Improving Blood Supply Safety

As with all HIV prevention strategies, the cost-effectiveness of blood supply safety
programs is highly dependent on HIV prevalence in the service area. This is particularly
true of programs to prevent HIV infection through contaminated blood products because
the cost of testing a unit of blood is the same regardless of whether the blood proves to be
infected. Health benefits are achieved only if the blood product is actually infected and if
the potential recipient was HIV negative. A 1995 study of the economics of blood supply
safety found that it cost US$172 per HIV infection averted.(17) This result indicates that
blood supply interventions can be highly cost-effective. This is particularly true when one
considers that the design of this and similar studies may actually be biased toward a less
favorable result than is achieved in practice for two reasons: a) only cases of HIV
transmitted from blood donor to recipient were considered, whereas transmission to
subsequent sex partners was ignored; and b) whereas HIV prevalence among donors was
assumed to be 16%, prevalence among recipients was assumed to be 40%, comparable to
the highest rates found in sub-Saharan Africa. This means that in only 60% of cases of
transfusion of infected blood would it be possible for the recipient to become infected.
Prevention of Mother-to-Child Transmission

The field of prevention of mother-to-child transmission of HIV (PMTCT) has received
more attention from cost-effectiveness analysts than any other area of HIV prevention.
This may be because of the more easily measured effectiveness of PMTCT interventions
compared with behavior change strategies. The result is that the published literature in
this area is the most advanced with regard to defining the circumstances under which
these interventions make economic sense.
Recent analysis of the cost-effectiveness of PMTCT calculated the financial and
mortality outcomes in a hypothetical population of 20,000 pregnant women in a working-
class urban South African population.(18) The analysis examined the cost-effectiveness
of four different formula-feeding interventions, three antiretroviral (ARV) regimens, and
a combined ARV-plus-formula-feeding intervention. The study concluded that "short-
course" ARV interventions (a more limited regimen than the current standard of care in
the United States) are cost-effective in a wide range of settings with or without formula
feeding. The Centers for Disease Control and Prevention (CDC) regimen with formula
recommended (but not provided free of charge) would be cost-saving to the health
system. The CDC regimen with formula supplied free of charge to the mothers would be
cost-effective at a rate of US$37 per life-year saved.
Another research project, based in the KwaZulu Natal province of South Africa,
calculated the cost-effectiveness and affordability of "short-course" AZT plus 4 months
of formula feeding.(19) The same analysis was then applied to each of the other South
African provinces. Researchers concluded that this intervention would be cost-effective
even without the savings in HIV/AIDS care costs associated with the infections averted
by the intervention. (At the time, data on the lifetime medical care costs associated with
pediatric HIV were unavailable for South Africa or elsewhere in sub-Saharan Africa.) A
subsequent multicenter collaborative consensus study of 106 HIV-infected children found
that lifetime treatment costs totaled R19,712 (about US$1,736(*)).(20) The study also
found that a program at a scale sufficient to prevent 37% of pediatric HIV infections
would cost R3.89 (about US$0.34(*)) per person in South Africa and would be affordable
to the health care system.
Nevirapine Study

PMTCT in developing countries has been revolutionized with the dissemination of
findings from the HIVNET 012 trial.(21) This study's regimen consisted of a single dose
of nevirapine administered to the mother at onset of labor and to the child within 72 hours
of birth. It has two crucial advantages over alternative interventions. First, at US$4 per
mother-child pair, the ARV costs are far lower than in other regimens.(#) Second,
because dosing is easy and can be administered so late in the pregnancy, more women
might have access to it than to alternatives that require prenatal care.
These factors, combined with an efficacy of about 50%, make nevirapine regimens more
cost-effective over a wider range of settings than any of the alternative regimens.(22) It
also confers greater public health impact in the many developing country settings where
only a small proportion of women visit a clinic early in pregnancy. In areas with 15%
prevalence, the nevirapine regimen has a cost-effectiveness ratio of US$19 per DALY or
US$506 per case of pediatric HIV averted. In areas with a higher prevalence (30%), the
cost-effectiveness is still greater-US$11 per DALY or US$298 per case averted.
Given the low cost of nevirapine, it is the VCT costs rather than drug costs that drive the
numerator of the cost-effectiveness ratio. Further progress in increasing the efficiency of
PMTCT intervention lies in finding ways to reduce the cost of VCT while keeping its
quality at an acceptable level.
Alternatively, in a somewhat controversial suggestion, researchers have noted a large
potential increase in cost-effectiveness of the HIVNET 012 regimen by eliminating the
VCT component altogether in high prevalence areas, and instead providing nevirapine to
all willing pregnant women. Because of reduced stigma in accepting treatment under
these circumstances, uptake rates, and therefore public health impact, may be enhanced
with this approach. However, this analysis did not quantify the potential benefits of VCT
in reducing adult-to-adult HIV transmission. Nevertheless, as a temporary measure where
the infrastructure for VCT is unlikely to be established in the near term, distribution of
nevirapine to all consenting pregnant women, even those who have not been tested or
who may refuse testing, may be an option to consider.
Intervening With Injection Drug Users

HIV is readily transmitted via shared, unsterilized syringes. Injection drug users (IDUs)
(or those receiving injection drugs in substandard medical settings) are therefore at high
risk of HIV infection and can be an important factor in spreading HIV to non-drug-users
through sexual transmission. A number of studies, most from the United States, have
demonstrated the cost-effectiveness of various strategies for reducing the spread of HIV
among IDUs. These strategies, often provided in combination, include:
• counseling and testing, partner notification • provision of clean needles to addicts with or without return of used needles • bleach distribution to enable users to maintain clean needles if they do reuse them • substance abuse treatment, typically methadone maintenance Based on data from Baltimore, Maryland, individual programs of HIV counseling and testing, partner notification, or bleach distribution have a cost-effectiveness ranging from US$3,500 per case averted to US$32,000 per case averted, assuming an annual HIV incidence of 4% among IDUs. This is highly cost-effective for industrial country settings, where the lifetime medical costs for treating HIV typically average about US$195,000.(23) Drug treatment emphasizing methadone maintenance is also cost-effective at US$4,000 per HIV case averted and has added crime and unemployment reduction benefits not included in these figures. Cost-effectiveness of needle exchange programs varies widely, from US$3,000 to US$90,000 per case averted, depending on HIV incidence in the area
and the efficiency of the program. Most estimates cluster in the range of US$12,000 to
US$45,000 per case averted.(23)
It is not clear, however, whether similarly high levels of cost-effectiveness can be
attained in Eastern Europe and the countries of the former Soviet Union, but there is
reason to believe this is possible: Although savings in medical costs are lower in these
areas (because available treatment is much more limited), so too are wages for the
personnel needed to deliver the services. Indeed, a study of the effectiveness and cost-
effectiveness of an intervention program with injection drug users in Svetlogorsk,
Belarus, found that such interventions can be extraordinarily cost-effective.(24) The
intervention evaluated in this study emphasized a comprehensive approach that included
the exchange of used-for-sterile syringes, safe sex counseling, condom promotion, bleach
distribution, and referral for STD services. The average cost per HIV infection averted
was projected at only about US$68 (estimate range: US$54 to US$100), and reflects the
uncertainty of some of the inputs used to calculate averted HIV infections. If the cost of
the associated mass media campaign were included, the cost per HIV infection averted
rises to the US$240 to US$442 range, still notably cost-effective. The importance of
these findings is underscored by the explosive HIV epidemic--a significant portion of it
fueled by injection drug use--now under way in many parts of the former Soviet Union
and Eastern Europe(25).
Antiretroviral Drugs: A New Frontier for Prevention?

Recent findings from Uganda indicate that the risk of transmission within discordant
couples is highly correlated with the level of HIV found in the blood (viral load).(26)
This raises hope that the risk of transmission from HIV-infected individuals with viral
loads suppressed by ARV therapy may be lower than the risk of transmission from those
who are not receiving therapy. If this is true, then ARV therapy not only controls the
progression of HIV to AIDS and death, but may also slow the spread of the disease in the
population. In short, ARV therapy might be a potent prevention option.
However, more research must be carried out before this hope can be transformed into
practice. First, it is possible that viral load suppressed by ARV therapies is associated
with a higher risk of transmission than is the same viral load occurring in ARV-naive
patients. Second, because those on ARVs may engage in more risky behavior and
because they are likely to live longer, the benefits from lower per-episode transmission
probabilities could be overwhelmed by increased risky behavior, especially over
time.(27) A theoretical model testing the interaction of these and other relevant variables
in San Francisco suggests that the potential prevention benefits of ARV therapy are
overwhelmed by increases in risky behavior.(28) Unfortunately, it appears that these
dangers are not simply theoretical: San Francisco has recently witnessed evidence of
increases in HIV incidence that may well be linked, at least in part, to misconceptions
that ARV therapy is equivalent to a cure and that it eliminates transmission risk by those
with ARV-associated viral load reductions.(29)
No information is yet available regarding the ways these dynamics might operate in
developing countries. Nevertheless, the introduction of ARV therapies must be
accompanied by vigorous education and counseling programs for the recipients to reduce
further transmission from them to others (often referred to as "positive prevention").
Directions for Future Research

Much is known about prevention of HIV in the developing world. A recent review of the
cost-effectiveness of 10 prevention options in the developing world found that they
ranged from actually saving the health system money to costing US$18 per DALY
gained.(30) Most estimates cluster in the range of US$5 to US$18 per DALY (see Table
Most of these studies are based on models that incorporate data where available but are
based predominantly on constructions of the likely range of values of key inputs.
Nevertheless, they can provide important general lessons about strategies to limit the
spread of HIV. For example, some studies have concluded that the benefit of prevention
is highest if the program is introduced when HIV prevalence is still low, and that the
success and cost-effectiveness of targeted prevention interventions depend on the level of
heterogeneity in risk activity and risk-group mixing patterns.(31) Almost all of these
studies emphasize the superior efficiency of targeted over nontargeted interventions.
The extant body of work also has severe limitations. It consists of evaluations of stand-
alone programs at one "snapshot" point in their development. Program data have been
used to calculate average cost-effectiveness ratios, with little effort to examine marginal
cost-effectiveness or the relationship between cost-effectiveness and program scale. In
addition, the literature contains few studies that formally compare multiple options. Most
analyses are also restricted to the perspective of the health care payer and do not include
the broader societal perspective. Finally, good cost-effectiveness data are extremely
sparse or missing for some important prevention strategies. These include condom social
marketing, school-based education programs, mass media campaigns, and programs for
migrant populations. The next generation of economic evaluations should address these
types of interventions. It should also address the effect of scale, phase of the epidemic,
and program combinations on costs and cost-effectiveness.

Cost-effectiveness analysis offers a critically important perspective for decision-makers
seeking the largest health impact for limited HIV prevention dollars. There is also ample
evidence of the cost-effectiveness of a wide range of HIV prevention interventions. New
spending on these interventions, particularly if targeted to high-risk groups and
implemented as early as possible in the local development of the epidemic, is capable of
producing dramatic reductions in HIV incidence. These programs achieve important
health benefits and in some cases even save money, which may be used for other aspects
of HIV prevention and care. These findings should be carefully considered and
incorporated into the HIV prevention planning process and program priority setting of
each affected country.
Even with optimistic estimates of increases in global funding for HIV/AIDS, the task of
controlling the epidemic remains daunting. Regardless of the infusion of new resources,
little gain will be realized if they are used inefficiently. Thus, it is imperative that
available funds be spent for interventions that are cost-effective and that information on
cost-effectiveness help guide resource allocation as funding is scaled up to more closely
match real needs.
* Currency conversion on 3/30/02.
# Nevirapine cost has subsequently been reduced to zero by the manufacturer for
developing countries planning a national program to prevent MTCT.

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