The Cost of HIV Prevention and Treatment Interventions in South Africa

This paper estimates the costs of introducing several AIDS-related prevention and treatment programmes in South Africa. Our approach combines detailed information about the costs of implementing these interventions with demographic projections of their impact. Information about prices, wages and other cost components is drawn from a range of primary and secondary sources. Johnson and Dorrington's (2002) modelling of the demographic impact of four AIDS-related health interventions is a central input into our costing exercise. We begin the paper with an overview of the key characteristics and results of their ASSA2000 'Interventions Model'. The paper then discusses the cost components of each of these interventions. We draw attention to the additional costs not considered in our primary analysis, and to the effect of antiretroviral medicine prices on the total cost of providing highly active antiretroviral therapy (HAART) to those who need it. HAART is expensive, but the net costs to government are significantly lower than the direct costs of providing HAART. This is because people on HAART experience fewer opportunistic infections (OIs) – thereby saving the government the costs of treating those OIs. We estimate these 'hospital costs averted', provide a brief discussion of the savings associated with fewer orphans, and then conclude with a calculation of the cost of prevention and treatment programmes as a percentage of GNP.