Aids2022.org #AIDS2022 29 July – 2 August – Montreal & virtual - PowerPoint Presentation

1. Aids2022.org #AIDS2022 29 July – 2 August – Montreal & virtualThe return on investment of ending AIDS by 2030Erik Lamontagne1,2, Mead Over3, John Stover4, Anna Yakusik11:UNAIDS, 2:Aix-Marseille University, 3: Center for Global Development, 4: Avenir HealthSession: Achieving sustainability in the HIV response: Thinking differently!

2. In 2019, several countries have achieved or were on track to end AIDS.Despite progress towards that goal, AIDS remains a global crisis. The gains achieved are still fragile in many countries. In June 2021, the General Assembly of the United Nations adopted the Political Declaration on HIV and AIDS: Ending Inequalities and Getting on Track to End AIDS by 2030. We estimated the benefits and costs of this ambitious commitment.To do so, we compared the estimated incremental costs, benefits, and economic returns of a scenario which fulfils the AIDS targets to a counterfactual scenario defined as maintaining coverage of HIV-related services at 2020 levels.Introduction

3. Full income approach: Health can in fact be valued and added to other components of a nation’s production to arrive at a “full-income” measure of economic well-being. In other terms, the social value of increasing the life expectancy of an individual for say one year, exceeds the economic value of his or her productivity.Updated approach for BCA The value of reducing mortality risk by 1/10,000 = 1.80% and η = 1.6Benefits and costs valued in international dollar (PPP 2017)Reduction in mortality risk decays over time, must be sustained like any investment with recurrent “maintenance” expenditureContrast global social planner perspective with recipient perspectiveEstimation of incremental benefits and costs per country, per yearProperly enhances the value of earlier vs. later benefits or costsEnables analysis of factors determining the variation of ROI across 114 countriesCharacteristics of the model

4. The benefits, the costs and the Return on InvestmentAcross all LMIC, the average B/C is 7.7 : 1 in 20309.8 : 1 in 2050The longer the planning horizon the higher the ratio of B to C.

5. RegionBenefits per capita2021-50In IUS$Costsper capita2021-50In IUS$Benefit-cost ratio2021-2050(VSL 100, η=1.0)Lower bound (VSL 160, η=1.5)Upper bound(VSL 160, η=1.0)Asia & Pacific668.5566.3710.077.6116.11Eastern Europe and Central Asia3,952.13144.8727.2824.0143.65Eastern and Southern Africa1,242.19151.768.193.1013.10Latin America and Caribbean1,714.9079.6121.5415.9434.47Middle East and North Africa217.7266.903.251.645.21West and Central Africa579.1372.088.032.6812.84Western & Central Europe and North America216.2698.532.192.553.51LMIC average767.7678.169.826.0115.72Income GroupLow343.84103.543.320.995.31Lower-Middle612.7875.308.144.7013.02Upper-Middle1,511.8671.5021.1419.6933.83LMIC average767.7678.169.826.0115.72Benefit-cost analysis of ending AIDS in 2050Notes:Incremental costs valued in US (constant, 2019) dollars and US international (PPP, constant, 2019) dollars for the tradeable and non-tradeable components of costs, respectively.Regional values are the geometric averages of the countries in the regionIncome elasticity (η) = 1, US ratio of VSL to GDPpc = 100, discount rate (r) = 0.03Sensitivity analysis performed with η = 1.5, and US ratio of VSL to GDPpc = 160 and with η = 1.0, and US ratio of VSL to GDPpc = 160

6. Returns on investment associated with income and number of PLHIV: Global Social PlannerAcross all LMIC, the average B/C is 9.8 : 1From the global perspective, the B/C is larger in countries with a high number of PLHIV and income.

7. The AIDS response is a global public good: HIV has no borders. Every country benefits from ending AIDS as a global health threat.Alternative perspectives give different B/C for country X:Global social planner:  B/C = (Incremental benefits in X)/(Incremental global costs) Recipient government: B/C = (Incremental benefits in X)/(Incremental costs to X) Donor government: B/C = (Incremental benefits in X)/(Incremental costs to donor) Beneficiary & households: B/C = (Incremental benefits in X)/(Incremental prepaid+out-of-pocket) From the perspective of the party paying less than the entire cost, the B/C will be larger than that calculated by the Global Social Planner. Thus, the RoI to the recipient can be substantially larger than that usually presented.  The implication is that the recipient government has an even stronger interest in the HIV response when national financing leverages donor resources.The following scatter plot shows how much larger are the benefit-cost ratios from the recipient government’s perspective.Sustainability: different perspectives

8. Returns on investment associated with income and number of PLHIV: Recipient perspectiveAcross all LMIC, the average B/C to recipient governments is 21 : 1From the recipient's perspective, the B/C is no longer associated with income. ==

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10. The cost of inactionThe cost of inaction means new HIV infections and lives lost at an earlier age if we fail to meet the 2030 AIDS Targets.Realistic counterfactual scenario: the global community maintains its commitment in terms of coverage as it was just before COVID-19 (≈ “quasi-liability”). Where z = country. Alternatively can represent the perspective discussed earlierThe cost of inaction can be defined as the lost net benefits of not acting.  Lost net benefits are total lost benefits in life year (not) saved offset by the cost savings of not acting.  Delta B minus Delta C. 

11. Human cost of inactionEconomic Cost of inactionRegionAdditional new HIV infectionsAdditional HIV-related deathsFull income approachPer capita (IUS$)Asia & Pacific 7,459,813 4,939,827 628.60 Eastern Europe and Central Asia 3,923,959 1,160,715 3’848.78 Eastern and Southern Africa 13,969,338 7,109,057 1’212.42 Latin America and Caribbean 3,111,874 1,207,487 1’646.12 Middle East and North Africa 390,781 189,277 183.50 West and Central Africa 5,980,826 3,086,902 563.57 Western & Central Europe and North America 100,960 9,375 121.42 LMIC average 34,937,552 17,702,641 731.17 Income GroupLow 8,005,643 3,949,204 328.04 Lower-Middle 14,515,841 7,633,710 580.45 Upper-Middle 12,416,067 6,119,727 1’447.43 LMIC average 34,937,552 17,702,641 731.17 Cost of inaction in meeting the AIDS targetsNotes:Incremental costs valued in US (constant, 2019) dollars and US international (PPP, constant, 2019) dollars for the tradeable and non-tradeable components of costs, respectively.Regional values are the geometric averages of the countries in the regionIncome elasticity (η) = 1, US ratio of VSL to GDPpc = 100, discount rate (r) = 0.03Sensitivity analysis performed with η = 1.5, and US ratio of VSL to GDPpc = 160 and with η = 1.0, and US ratio of VSL to GDPpc = 160

12. Using the full-income approach, we found that each additional dollar invested between 2021 and 2030 generates US$ 7.68 [4.70-12.29] in economic returns. These Returns on investment represent US$ 9.81 : 1 [4.70 – 15.70] in 2050.Returns on investment vary substantially between countries, regions, and income categories. Returns are higher in countries with income. The benefits of investment are also highly correlated with the number of PLHIV.Perspective matters.  Through the year 2050, the RoI from the perspective of the recipient countries is 21:1, more than twice as large as the RoI from the global planner's perspective.B/C analysis provides sound analysis to support the sustainability of the AIDS response, particularly from the recipient’s and the donors’ perspectives. We should not get trapped by solely considering the global social planner's perspective.The cost of inaction in meeting the AIDS Targets represents an additional 4.48 million AIDS-related deaths, representing a cost of US$ 731 per person from the 114 LMIC. An idle situation is not an option.Investing to achieve the 2025 AIDS Targets and the 2030 provides significant returns from both human and economic perspectives.Concluding remarks

13. Thank youWe welcome questions and suggestionsContact: LamontagneE@unaids.org and MOver@cgdev.org

14. Annexes

15. Health improvement programmeDuration: 10 yearsCounterfactual scenario: Target scenario: , whereImpact: Assume that the ‘target’ programme improves health status over the counterfactual by an additional one unit each year: = 1  Typical dynamic profileof cost increments is similar,but more “front-loaded”.

16. The return on investment is the ratio of the future stream of benefits to the future stream of cost. , where v(.) converts Δ to currency Setting = 1 and v(.) to a constant , the value added to PV(Benefits) in year t is the value of all previous years’ improvements plus the value of the current year improvements: Setting r = 0and T=12 (as in the program in slide 1) gives (area under the stair-step) Valuing future health improvement