This book explains how, and why, economics has been applied to a terrible pandemic, using a range of examples mostly drawn from the region most affected, sub-Saharan Africa. Part I shows that microeconomic approaches have found fertile ground in a public health approach that ‘blames’ individual choices for HIV transmission. Despite their attractiveness, however, these approaches fail to explain contemporary patterns of HIV prevalence, illustrating the importance of factors that are excluded from the standard micro-economic approach. Part II of the book looks at our problems in understanding the economic impact of AIDS, and explains why economists cannot agree if epidemic disease is a good or bad thing for economic development. In both sections of the book, the potential for alternative approaches is shown, and the book ends by arguing that a political economy approach can bring meaningful insights to our understanding of the spread and impact of HIV/AIDS.

The book addresses the impact of HIV/AIDS across different countries, the global response to HIV/AIDS, and cost-effectiveness of HIV/AIDS-related interventions.

The global response to HIV/AIDS has been a major aspect of global health and development policy over the last three decades. The book illustrates the devastating health impacts of the epidemic, with life expectancy in some countries falling to the lowest levels observed anywhere, and the remarkable success of the global HIV/AIDS response in reversing such extreme outcomes. Concerns about the implications of HIV/AIDS for economic development have played a role in motivating the global HIV/AIDS response. However, evidence on the impacts of HIV/AIDS on economic growth or poverty is weak, and the magnitude and relevance of such economic effects appears trivial compared to the consequences for life and health. Because of the success in extending access to treatment globally, HIV/AIDS has effectively transitioned into a chronic disease. This means that HIV/AIDS absorbs not only a substantial chunk of current global and national financial resources, but that these spending needs are projected to persist over decades. The costs of the HIV/AIDS response thus resemble a long-term financial liability, shaped by past and current policies. Relatedly, the calculus of cost-effectiveness of HIV/AIDS interventions has changed. People who become infected with HIV can now expect to not die because of AIDS; at the same time, each HIV infection results in medical needs and expenditures extending over decades. The book presents a framework for integrating these financial consequences and the transmission dynamics of HIV in the analysis of cost-effectiveness of HIV/AIDS interventions and in the design of HIV/AIDS programs.

HIV is the leading cause of premature death in Thailand. Since the first case of AIDS was reported in 1984 more than one million Thais have been infected. The social, human and economic costs of this burden are enormous. The Thai government has shown a strong commitment to providing care and support to persons living with HIV/AIDS by launching the National Access to Care Program (NAPHA) in 2003, which provides for publicly financed antiretroviral therapy (ART) to all HIV-infected people. This book documents through interviews how ART has radically changed the lives of those living with HIV. In the words of an HIV positive 29-year old man, ART is a "miracle." The book then develops an innovative analytical framework and uses it to show how the future sustainability and cost-effectiveness of this ambitious program depend critically on Thai government choices of AIDS treatment policy, HIV prevention policy and AIDS drug pricing. For the most likely assumptions, the book estimates that ART will save years of healthy life at a cost of between $700 and $2,400 per year. Successful AIDS treatment accumulates ever-increasing numbers of patients who need subsidized ART. Despite the magnitude of the resulting fiscal burden, the authors judge this expenditure to be a worthwhile public health investment for Thailand, However, they show that the future sustainability of the program will hinge critically on how well the government manages the quality of ART service delivery, on whether it is able to sustain its past successes in HIV prevention and on its negotiations with multinational pharmaceutical manufacturers on the prices of new AIDS drugs.

The fight against HIV/AIDS is, above all, an economic issue. The scale of the pandemic and the lack of funds needed to eradicate it require identifying key issues in field interventions and optimal economic policies to fund them. In developing countries, where the epidemic is reaching its peak, the magnitude of governmental and international interventions triggers major crowding-out effects on every other economic decision of those countries, and thus HIV/AIDS affects every aspect of social life. Economic policies alleviating crowding-out effects are thus paramount to foster the economic growth of developing countries and, in turn, their future welfare. Economic issues in the fight against HIV/AIDS are also a primary concern for developed countries, in charge not only of subsidising current treatment campaigns domestically but also of funding R&D in innovative treatments. Designing optimal incentives for public and private agencies to reduce the costs of available medicines, and to develop innovative treatments such as a therapeutic vaccine, is as important as drug delivery or any other field campaign to eventually eradicate the disease. Over two decades of practical implementation of economic policies and academic research have shown many pitfalls in current policies, and they have made it possible to identify previously missed issues. This book shall provide a recent and comprehensive coverage of those policies, and it shall analyse their economic efficiency as well as ways of improvement using state-of-the-art academic findings in Economics and Finance. The authors discuss in detail and provide new economic analyses on the following issues: The nation-wide and international economic consequences of the spread of the disease; Market incentives and disincentives to produce and to develop treatment technologies; The nature and optimality of economic policies devoted to fighting the disease in developing countries, as well as the enhancement of current policies through financial innovations.

From the early days of its recognized occurrence, AIDS has been per ceived as posing tremendous threats, burdens and challenges to human beings. Individuals, societies and, in a global point of view, mankind are affected by the effects of the HN infection, the nature and extent of which is still unclear in many ways. In the beginning only biomedical and epidemiological analyses of the problem were the top research priori ties, the former laden with great hopes that it may soon be possible to stop the spread of the disease and to overcome its physical impact. Yet it soon became clear that AIDS would be something to be reckoned and coped with on a long-term basis, making a thorough investigation of its impact absolutely mandatory. AIDS has serious economic consequences. Taken seriously, they can not be confined to predictions of costs intended to support the AIDS issue in the struggle for resources. Besides cost calculations - a method ologically tricky and wide-ranging topic in itself -and their application to cost-effectiveness and other analyses, economic issues include identify ing and assessing patterns of care, analyzing problems of financing, exploring impacts on markets other than health care, and modelling scenarios for future developments and strategies. At present, the eco nomic aspects of AIDS still constitute a very recent topic in European health economics and health systems research. Many projects are just about to start, and there must be a better exchange of information between research groups.

We began to research for this book in 2000, with the idea that we might contribute to the search for solutions to the global HIV/AIDS pandemic by c- bining perspectives from different disciplines. Much has happened in the interv- ing years. First, the severity of the HIV/AIDS pandemic in sub-Saharan Africa – and the threat it posed for many others regions of the world – led to a movement among several countries to correct the imbalance between producers and users of ph- maceutical products. This effort produced a clarification of the right of gove- ments to produce generic medicine under compulsory licenses and an amendment of the World Trade Organization’s TRIPS Agreement to allow exports of generic medicines from one WTO Member to another. In 2007, the amended rules were put into practice, with Canada authorizing the export of generic antiretroviral drugs to Rwanda. However, at the same time, global patent laws have been undermined due to regulatory capture, most notably in free trade agreements and through political pressure on countries like Thailand to not to exercise their right to issue compulsory licenses for pharmaceutical products. Second, the amount of money available for the treatment and prevention of HIV/AIDS has increased dramatically, with the establishment of the World Bank Multi-Country HIV/AIDS Program for Africa (MAP), the Global Fund to Fight AIDS, Tuberculosis and Malaria and the US President’s Emergency Plan for AIDS Relief (PEPFAR), among other funding initiatives.