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A Conversation with Michel Kazatchkine, Executive Director of the Global Fund to Fight AIDS, Tuberculosis and Malaria

Speaker: Michel Kazatchkine, Executive Director, Global Fund to Fights AIDS, Tuberculosis, and Malaria
Presider: Peter Navario, Fellow for Global Health, Council on Foreign Relations
June 8, 2010
Council on Foreign Relations


This meeting was part of the the Future of U.S. Development Assistance for HIV/AIDS and Global Health Roundtable Series.


MR. KAZATCHKINE:  (In progress) -- and talk a bit about the year 2010 and how we can and indeed must scale up our efforts in global health.

So let me first say that health is the one area of development where we have made considerable progress in the last decade and particularly in the last five to eight years and that when it comes to AIDS, TB and malaria the achievements have been truly impressive.

There are a number of reasons for that -- an unprecedented political and societal mobilization, both in the north and in the global south, political commitment and with that political commitment, large resources for health.

Let's just go back to 2002 when the Global Fund was created.  At that time, the number of people who were accessing antiretroviral treatment for AIDS in the developing world was somewhere around 200,000 of which 150,000 were in Brazil alone.  Today, it is close to 5 million people who are now receiving -- who have initiated antiretroviral treatment in the developing world, 2.5 million in Africa alone when it was 30,000 in 2002.

And as a result, we're now seeing impact on mortality. A recent report, for example, shows that in Addis Ababa, mortality from AIDS has decreased by 60 percent, 6-0, in the last five years -- very significant progress and impact.

And malaria was a neglected disease in 2002.  Today, we are talking of most likely achieving MDG 6 when it comes to malaria by 2015 if not earlier.  The Global Fund that provides two-thirds of the overall funding for malaria has already allowed for the distribution of 120 million bed nets and has committed funding for 250 when the estimate of what we would need to reach, quote, "universal coverage of the most at-risk populations" in the most endemic countries in Africa is around 350 million.  So that effort together with that of the President's Malaria Initiative and that of the World Bank should allow us to reach universal coverage of the most at risk populations before 2015.

And large scale distribution of bed nets together with providing the ACT artemisinin in combination therapies, the right drug for drug resistant malaria parasite and together with indoor spraying of insecticide where it is indicated is having a huge impact again at the population level.  Mortality in small children -- malaria related mortality in small children below five and the number of new cases of malaria in 10 of the 12 most endemic countries in Africa has decreased by between 40 (percent) and 80 percent in the last three years.

So again, very impressive results.  But, as I'd like to say later, all of those results remain fragile because we need the sustainability of that effort.

When it comes to TB, it's around 7 million people who have -- additional people that with Global Fund support have accessed diagnosis and treatment for tuberculosis.  And the world is somehow on track when it comes to the MDG.  The MDG is to decrease the prevalence for tuberculosis from where it was in 2000, 222 per 100,000 prevalence, to a target of 124 in 2015, and we're currently at 164, somehow on track.

Where we're not on track is with multi-drug resistant tuberculosis and maybe I'll keep that for the discussion where the world's effort is really not where it should be.  The Global Fund is basically the only provider of drugs for multi-drug resistant tuberculosis and we're covering -- supporting about 30,000 patients when the estimated number of cases is around 500,000 worldwide.

So as you heard, the Global Fund, when it comes to malaria and TB where it provides two-thirds to 70 percent of the global financial, international financial effort but also in AIDS where together with the other major player, PEPFAR, the Global Fund has really been hugely contributing to those I think unprecedented changes and to that unprecedented progress in the history of public health in the developing world that we've been witnessing.

I'm not complacent here in any way.  I just think that we have -- I really think we have to realize the results, the amplitude of the results that have been achieved.  Many of us -- I look at some of you here, as David (ph), you know, who have been activists for a long time in the AIDS field -- perhaps wouldn't have thought eight years ago that we would reach the sort of level of impact that we are now reaching.

The Global Fund is now the main multilateral funder for HIV, TB and malaria but it's also together with GAVI now the main funder for health systems.  Here I look at Laurie.  And it is a major investor obviously in maternal and child health because everyone here would realize as we discuss in the Women Deliver conference these days how millennium development goals are interlinked and how AIDS and malaria particularly interfere with our progress or the progress we would like to make on maternal and child health.

AIDS remains the cause of over 50 percent of the deaths of women in child bearing age in Africa and is directly responsible for at least one in five maternal deaths as we discuss the slower progress of the world when it comes to MDG Five that is maternal health and here maternal mortality at the time of childbirth.

The Global Fund has now invested or committed for over $19 billion in grants in seven years' time in 140 countries, so it's a very large investment.  And our current estimate is that that funding has already allowed to save about 5.7 million lives and that funding is contributing to save an additional 4,000 lives per day.

Sixty percent -- just I'll give a few other -- a few more numbers: 60 percent of the funding goes to Africa; 55 percent of the funding goes to AIDS, 30 percent to malaria, 15 percent to TB.  And that is not the result of a top-down decision that is not the result of our thinking or how we would wish to allocate resources in Geneva.  This is the result of the demand that we receive from countries.

Because the few things I'd like to very briefly add about the Global Fund is to remind you or to indicate to you, for those of you who wouldn't know these principles, the few founding principles of the Global Fund and how it works.

First, what I call a sacrosanct principle, which is country ownership.  It is the countries that define their own priorities based on their analysis of the epidemiological situation, based on their assessment of what they could achieve if the resources were to be there.  And it is the countries that build their own strategic plans for AIDS, TB, malaria or for the health sector more generally and then tell us, this is our national strategy.  This part of it is funded by PEPFAR; let's say this part of it is funded -- this is what we bring as a government, this is the gap and this is therefore what we're requesting from the Global Fund.  So country ownership.

The second key principle is inclusiveness.  We are a public-private partnership.  I just come out from a meeting across the street at the NSC where I was with representatives from the private sector.  We're a private-public partnership.  We're based on the principle that none of the entities -- be it the private sector, the civil society or the public sector -- can respond alone to an epidemic.  When you fight an epidemic, all sectors of society have to come together.

And so our board is a board that is I think a unique board in developmental aid.  It is a board where donors and implementers are equally represented.  When it comes to donors, despite the fact that 95 percent of our resources come from governments and 85 percent of the resources from G-8 countries, the governments from the global north have eight of the 10 seats at our board and two seats are for private sector, one for foundations, one for the corporate sector.  So if you wish the positive bias to the private sector.

Similarly, if I may say so, when it comes to the implementing block, out of the 10 seats, seven are for various regions of the world and mostly ministers of health representing constituencies of 15 to 20 or 25 countries and three seats are for the civil society, one for a delegation from NGOs from the developed world, one for a delegation from NGOs from the developing world and one for people affected by the diseases.  And so, the person who represents the communities affected by the diseases has the same right of vote in our board as the representative of the United States of America that provide us this year with $1.05 billion contribution in 2010.  So this inclusiveness and this partnership is absolutely key.

We also have it at the country level.  When I say countries send us proposals and requests for funding, it isn't the request that would just come from a ministry of health.  It's coming from an entity which we call the country coordinating mechanism where government is present in addition to the civil society, the non-governmental sector writ large, which is represented for at least 14 percent of the seats in that CCM in addition to the multilaterals and the bilaterals (sp).  So country ownership inclusiveness.

Then everything that we would fund is evidence-based, so all of the requests that come to the Global Fund are screened and then carefully assessed by an independent panel of international experts from the north and from the south that we call the Technical Review Panel.  It's now a panel of 36 members that will look for how programmatically, epidemiologically, scientifically and financially a proposal is sound and that assessment usually brings that panel to only recommend about 50 percent of the proposals that come to the Global Fund.

When I now look retrospectively at the work of that panel, I see that -- what we see is that as we rate the performance of the grants, AB or AB-1, B-2, and C in our system, 85 percent of the grants are performing A or B.  And so this shows that the selection or the recommendation by the Technical Review Panel allows our board to decide on investments that actually have 85 percent chances for the programs to reach their objectives.  And that's I think a very strong message to our donors.

And finally, we -- and I just open that in my last remark -- we are performance based in the way we disburse the funding.  So when we sign a grant with a country, we would decide on a set of targets, we would disburse the first traunche of money that would allow the country to go from A to target B and we would only disburse the tranche to go from B to C once the objectives, the B objective will have been reached.

And the way we know that the objectives have been reached is that of course I receive a report from the country but then we would then also have an independent auditor in the country which we call the local funding agent which may be an audit firm or an independent entity, a university and that local funding agent will send his own report telling me that indeed the objectives have been achieved and that indeed he can testify that the money has been spent accordingly to the program and indeed spent for the program.  If the two reports coincide then we disburse the next traunch.  If there is discrepancy, we will investigate.

So that's -- I did think I should spend these few minutes on telling you about the model because I thought that could be very relevant to the discussion and interesting to you as we're now discussing about how the GHI will be implemented and whether and how the U.S. may move towards more country ownership in the way it delivers its development aid and at a time when the U.S. are talking about becoming more multilateral in developmental aid.

I've been talking about HIV, TB and malaria but as I just said in the introduction, clearly that work and that funding is not strictly vertical.

First, we are a major funder for health systems.  Let me give you another figure here.  When it comes to our AIDS investments -- and again, our investments follow the demand and they mirror -- they are what the countries request so it's interesting that these numbers come directly from the countries.

When it comes to AIDS investments, it's roughly 30 percent -- actually, it's 32 percent for prevention, 28 percent or so for treatment and 30 percent for health system strengthening, that is for providing -- building the elements be it the health workforce, the infrastructure, procurement and supply chain management or data collection and analysis and information systems, so everything that constitutes a health system to which I would add a window that is very important to us at the Global Fund which is funding the civil society and the communities so that we can allow for task shifting on the ground and so that many civil society organizations are actually providing support, providing directly preventative interventions or even supporting treatment directly for patients in each of the three diseases.  So an important contribution to health systems strengthening.

And here we now have passed one more step and you may have heard that last year, Julian Lob-Levyt, the executive director of GAVI and myself, we had written to Gordon Brown and to Bob Zoellick, who chaired the Task Force on Innovative Finance, to say that we would wish to build a common platform between GAVI and Global Fund to fund health systems.

That platform is now expanding to the World Bank and I do hope that in the coming months countries will apply to a unique platform for health system strengthening that would include Global Fund, GAVI and the World Bank.  I already alluded to the fact that our funding obviously impacts hugely on maternal and child health and I won't say more at this time.

Let me just finish by a few things on the funding and the funding for the Global Fund in difficult times economic and financial crisis.  2010 will be a decisive year for the Global Fund and actually for global health because, first, it's a year when the attention of the world will be focusing on the millennium development goals; we are two-thirds of the way to 2015.

There will be a summit of the United Nations looking at progress in MDGs in September in New York.  But then, two weeks later, on October 5, we will have our replenishment conference where donors will come and pledge for three years, 2011, '12 and '13.  So that will take us to January 1st, 2014, basically a year before the MDG target.

So that replenishment will largely determine where the world will be with regard to the health related MDGs by 2015.  And really, the donors will somehow decide on whether we can win the fight, whether we can come close to or reach the MDGs or whether we will waver in our commitment and let the progress falter.

What we are saying in our advocacy documents -- and again, I look back at what I would have said 10 years ago when I would think of all what I will be saying in a minute would be truly aspirational.  What we're saying now is that we strongly believe that if the effort is sustained and expanded, we should be able to reach basically a world almost with no malaria deaths by 2015, certainly reach MDG Six for malaria but really come close to -- the way I put it is eliminating malaria as a major public health problem in the endemic countries, not eliminating malaria but eliminating malaria as a major health burden or problem in endemic countries.

Second, we should be able to effectually or virtually eliminate mother-to-child transmission of HIV.  Four hundred thousand children were born HIV infected last year in Africa whereas it was I don't know how many in the States but in France, in my country it's four at the same time.

So this means that we know how to do that.  We're currently at about 45 percent of the women who are diagnosed HIV positive during pregnancy reaching, having access to prevention we should be able to scale this up to 95 percent -- and this is something that U.N. AIDS, UNICEF, PEPFAR, you know, together with Global Fund has truly committed to work on.  We should of course be able to have millions more lives saved through -- by preventing millions more new infections with HIV and by preventing millions of people, more people from dying by providing them with AIDS treatment.

We should be able to achieve significant decline in TB prevalence and I hope that we will be able to further impact on multi-drug resistant tuberculosis.  And finally we should achieve significantly more progress on maternal and child health, and we may discuss that further.

Now, with that knowledge, knowing that these are things that we could be able to achieve by 2015, of course, comes a great responsibility.  Because we're demand driven in our model, I do not come to the donors saying, this is how much we need because I cannot anticipate on what the demand will be but we have been building scenarios.

And let me just tell you that the middle scenario, as we call it, is a scenario based on a very simply calculation.  It says if we were to continue funding, all what we have already committed for, and if we, in addition to that we were to scale up our efforts at the same pace as we have been scaling up in the last three years, that will take us to what we call the middle scenario which is $17 billion for three years as compared to $10 billion that came out of our last replenishment in 2007.  So let me just leave you with that number.

Again, for our discussion, let me say that I look very much forward to that discussion, particularly perhaps to also understanding from you and your inputs how do you see the role of the U.S.  The U.S. is the first contributor to the Global Fund.  The U.S. has been providing around 28 percent of the funding to the Global Fund.  We often say that every dollar from the U.S. leverages somehow $2 from the rest of the world.  Every dollar coming from the U.S. that goes to the Global Fund actually goes to programs on the ground because we have no overheads.  Actually, all our administrative expenses and overheads are covered by the money that is generated by the funds that we have in the bank in our trustees' bank -- that is, the World Bank.

I must say we have been having -- enjoying a very good relationship with the previous AIDS Ambassador Mark Dybul and I have a very easy and wonderful working relationship with Eric Goosby -- with Ambassador Goosby.  We're working hard at making sure there's no duplication in country and that our efforts are coming together.  Yet, I remain a little unclear on how the GHI will actually shape and how some of the principles that are included in the GHI will translate into programs on the ground.

So thank you again very much and I'll stop here and let's open it for discussion.  Thank you, Peter.  (Applause.)  Shall I just -- yeah?  Okay.

MR. NAVARIO:  Okay.  Yes.  That works.  Just so that we can get enough time for the general Q&A, I will -- I just want to start off with the October replenishment meeting and ask about the scenario where full replenishment does not occur.  What would be -- what do you envision as the Global Fund's -- the steps that the Global Fund would take to deal with, you know, not achieving the replenishment goals?

MR. KAZATCHKINE:  First, I have to say that I'm fully conscious of the economic and financial climate and I, of course, respect very much what I hear from donors and they talk about -- (off mike).  I'm also saying that I do know what we should be able to achieve based on the results that we show.  I do know that the donors face economic and financial difficulties.  The developing countries actually suffer disproportionately more from the crisis, so it may be paradoxically that their needs are even greater in times of crisis than in times of healthier economies.

And third, you know, it isn't overall huge money for what it can actually bring from a human perspective but also from the societal and social, economic and a political perspective.  It is the -- (inaudible) -- and it's one of the areas where we can bridge some of the major kind of inequity between the rich and the poor, the north and the south.  So to me it is a very politically and socially sound investment.

If we fail, there aren't so many things we can do.  Of course, we go for efficiency gain but we're not waiting for the outcome of the replenishment to go for efficiency gains.  We have a strong policy now with countries asking them to reach at least 10 percent efficiency gains; that is, achieving the same target with lesser money.  Of course, we will redouble efforts of resource mobilization not only with governments but with new donors, in the emerging economies, including Gulf states, including the private sector.

MR. NAVARIO:  Would you envision a reevaluation of middle-income countries, applications to the fund who are relatively low prevalence?

MR. KAZATCHKINE:  If the answer isn't -- (inaudible) -- to the executive director of the Global Fund, I will say this is a discussion for the board.  If the question is -- (off mike) -- I would say -- I wouldn't tend to be I think there's a lot of artificiality -- (inaudible) -- you just classifying countries by income.

I think what is important is that countries that are middle income, co-fund and co-contribute to countries rather than us saying we will only fund programs in the poorest countries of the world because clearly some of the middle-income countries with a bit of help of the Global Fund can really achieve or should be able to achieve universal coverage.  They could also -- the Global Fund money targets some of the vulnerable populations at their governments -- (off mike) -- for example, civil society involvement that their governments wouldn't necessarily target as a priority.  So if we want to fight an epidemic, we really have to fight that epidemic everywhere and not just in a small sector of the country.

MR. NAVARIO:  I'll sort of ask one more question and then I'll turn it over --

MS.    :  (Off mike.)

MR. NAVARIO:  Or we can move back -- we should move back.  Sorry about this.  Okay.  That's better.  No interference.  So I'll just ask one more question.  It's a bit -- it's more of a philosophical question as you occupy a unique vantage point as the head of the Global Fund.

And I'm wondering, as I think about how global health has evolved so significantly over the past six or seven years with the increase in global focus, the resources that came with that, as you can -- as the leader of one of the major organizations that mobilize resources in global health and you think about strategy, how the world of global health has changed, I'm wondering about acknowledging the value of the ideal targets when we talk about we need $20 billion a year, we need to treat 20 million people a year, that sort of thing.

I'm wondering about your thoughts sort of strategically about this macro-focus, this focus on sort of the ideals versus perhaps a more realistic discussion of what can be achieved with the resources that are either available or expected.

And I would point to one example that comes to mind and that is the country of Malawi which, by all accounts, has done a remarkable job.  They made sort of a tough decision from the outset and that was we're going to provide first line treatment to as many patients as we possibly can.  We're going to have minimal laboratory testing that sort of thing.  So they made a bit of a tough decision.

I'm just -- I'm wondering about your thoughts, as you look ahead and when you think about mobilizing resources in global health, has sort of the macro-level targets and some of the idealism displaced some of the discussion or inhibited some of the discussions about some of the more realistic strategies and tactics?

MR. KAZATCHKINE:  Well, three things.  First, the strategy and the strategic thinking is evolving, obviously, when Malawi started responding to HIV/AIDS -- and that was at the time of round one of the Global Fund -- Malawi and Africa were really -- and all of us -- in an emergency mode.  So we had to respond to the emergency of the health centers and the hospitals just being overwhelmed.  And I guess a number of you have been traveling to Africa in those years and seeing several patients per bed and the corridors just crowded with people lying -- coming with AIDS or malaria primarily and tuberculosis.

So the first thing is that our strategic thinking has been evolving from that sort of emergency response mode in the first six years I think in the fund and in the last two years more of a forward thinking.  And this is where we started more explicitly talking about health systems, although we have been funding health systems from the beginning but in a more structured way and similarly for maternal and child health.

My second point is that I don't think there's anything ideal there.  It's really about being very realistic.

First, the target of having universal coverage of bed nets for malaria, universal coverage for prevention and treatment in AIDS is realistic because we're also saying, all of us -- and listen to Michel Sidibe in UNAIDS that for two people starting treatment, three people are currently becoming infected with HIV.

So we have to stop that vicious circle at one point and we will stop it by investing both in prevention and in treatment, not in one or the other, particularly because we know that treatment now is having a huge preventative effect by itself.  And that's not a new notion but it's -- now there is sound evidence or scientific evidence for that from the AIDS field.  But of course, as you treat the reservoir of the virus and decrease the reservoir, there will be less transmissibility, less transmission and less epidemic growth.

And the third point is that because we're demand driven, our ask from the donors is not an aspirational role.  It is, as I said earlier, what the countries themselves know that they will be able to achieve because in a performance based system for funding, you have to adjust the budgets to the targets you fix to yourselves, you decide on.  And some of the countries will have very ambitious targets and can move very, fairly rapidly to those targets -- let's say, Rwanda, which always comes as an example for a number of reasons, and then some countries -- and let's say the Central African Republic or some of the regions, the eastern part of DRC where obviously reaching those objectives is hugely difficult.

So our targets are really adjusted to what is feasible and our overall aim is an epidemiologically justified aim rather than an ideal aim.  It also, from an economic perspective, would mean that once we have invested in reaching those first targets the model shows that the return on investment will allow the further investments to be of lesser magnitude.

For example, in malaria, it's been well modeled that once we reach universal coverage with bed nets, we will need to renew the bed nets, but the amount that will be invested in, for example, drugs to treat malaria will be decreasing significantly.

MR. NAVARIO:  All right.  Let's open it up to the floor.  If you have questions, please turn your card on the side.  I've got Kwaku and Laurie (sp) and then Leonard and then we'll come over here.  So Kwaku.

Q     Thank you very much.  Kwaku Yeboah from Project Concern International.  Michel, I have two questions.  The first question has to do with would you provide some insights as to the absorptive capacity of countries in respect to the amount of money that have been provided?

And I'm asking this in connection with the role of international NGOs, one in supporting the Global Fund application proposal writing but beyond that in supporting the implementation, quality implementation.  And I'm asking this specifically in relation to funding of, you know, indirect costs for international organizations.  I agree that there's a move to try to support local organizations to be able to provide some of these services but to what extent has a role for the international NGOs.

And then the second question has to do with counterfeit anti -- ACTs making their rounds and how that is going to affect ultimately the quality of malaria treatment.

MR. NAVARIO:  We'll take three questions and then we'll move to the other side.  So I've got Laurie and then Leonard.

Q     Okay.  Thank you very much for coming here today.  And my question is really to that we're getting a lot of reports from a variety of different organizations of variable credibility regarding individuals who are turned away trying to get ARVs and typically these reports insist that the culprit is PEPFAR and that the Americans aren't giving enough money and that's why people are turned away from ARVs in Uganda or Malawi or whatever country you may pick.

Do you, first of all, think that there is evidence that lack of PEPFAR funding is concretely resulting in an inability of individuals to obtain ARVs on a timely basis.  Why is it assumed it's PEPFAR money as opposed to say Global Fund support or national government support?

And do you think that allegations of country corruption -- I think, for example, that the fund froze money in Zambia and Uganda in particular -- is playing a role in what is perceived as an inability to obtain drugs because of lack of external support?

MR. NAVARIO:  Okay.  Thanks.  And one final one.

Q     Leonard Rubenstein from the Center for Public Health and Human Rights at Johns Hopkins.  I'd like to ask you a question about Southeast Asia where there is a growing concern about the detention and growing number of detention centers for drug users.  And there have been many calls now to close these centers.

At the same time, it appears, although there's not a whole lot of transparency yet by these governments, especially Vietnam, that the Global Fund is directly or indirectly supporting these detention centers.

And I'd like to know if you had a comment on how the fund can address what is really a growing -- a growth industry and to match the calls for closing these detention centers with funding decisions that don't promote their continuation.  Thank you.

MR. KAZATCHKINE:  Well, thank you for these very interesting questions.  The absorptive capacity -- and the easy answer -- I mean, the fastest answer I can provide you with is of course to say that again, we are in the performance-based funding model.

So a situation where we would inject a large amount of money in a country and then that money would sit somewhere in the country because it cannot be disbursed wouldn't happen in our model because we disburse by traunches based, again, on how the objectives are met.  And so the rate at which the money is being disbursed follows the -- directly it relates to the absorptive capacity and the implementation rate at the country level.

What happens is that if a country has been, let's say, too ambitious for whatever reason in its objectives and is not able to spend within a given timeframe the amount of money that it was allocated originally, that money will not be kept for that country.  That money will return to the Global Fund pot, if you wish, and be redirected to where it can better be spent.  That's the basis for the performance-based funding system.

We've actually spent and redirected somewhere close to $600 million over the years in that system.  NGOs are of course a major way of increasing the absorptive capacity at the country level.  Forty percent of all of our funding -- that's 40 percent of 10 billion (dollars) disbursed so far -- has gone to the nongovernmental sector.

And we have many examples where NGOs, be they national or international NGOs but with national representation, because we're not funding Washington -- we're only funding countries -- where we have many example where actually NGO, that programs would show better performance to some of the government led programs.

The counterfeit drugs is an important question.  But to me, the answer is we need to provide these key life saving drugs free.  Whenever there's no market, there's no counterfeit drugs.  And we've seen that very clearly with the first line antiretroviral drugs.

When -- in my earlier life, I was the director of a national agency for AIDS research in France and we had a project where we were following the price of the 3TC and AZT on the vegetable market in Dakar and compare it to the price of the drugs at which Senegal was buying its drugs, after -- I think it's December 2008, maybe December 2007, as soon as Senegal had made access to antiretroviral drugs free, there was no more drugs on the black market and on the vegetable market and we closed down the project.

So counterfeit drugs and particularly counterfeit anti-malarial drugs are really an issue because too many people have to buy their malaria drugs.  It's between 25 (percent) and 60 percent of the ACTs are actually bought in the private sector in Africa -- I mean, through private sector channels.

Now the price of an ACT treatment in the private sector is about $5 per treatment which for people who live on less than $1 a day or $2 a day is just unaffordable.  This is why -- and I have no time to go into the detail here -- we have launched with UNITAID, with the support of DFID particularly an -- and of the Roll Back Malaria Partnership a big program that is called AMFM, Affordable Medicines for Malaria, in which we will basically be -- (audio break) -- the private sector when the private sector will be buying from the manufacturer its ACTs.

So that let's say if the -- if a private sector buyer will buy it for $1 from Novartis, we would subsidize 95 cents, the private sector purchaser would pay five cents and when taking his margins, the drug will end up being at 20 (cents) or 40 cents which is the price of Chloroquine that our people are used to be -- to afford and that will help actually bringing the ACTs, fighting counterfeit drugs and displacing the old drugs that are now ineffective.  This program is now starting in nine countries in Africa.

Laurie, I have been reading the report in the New York Times.  Actually, I had a long conversation with Don McNeil when he was preparing that article so he told me about the story in Uganda.

I -- well, Uganda -- and I hate talking about a specific country but let's do that here -- Uganda is not the country where there's the best integration between whatever the national program would run, which is Global Fund supported, and PEPFAR that in a few countries have been running -- you know, has been running its own program somehow in parallel to the national program.  So a PEPFAR clinic would depend on the supply of funds and of drugs for the PEPFAR clinic.

And the communication has not been optimal or has not been good at all between some of those clinics and the national system.  I've seen that in many other countries.  I was in Malawi just 10 days ago and the ability of the country to actually follow where the drugs -- when the shipment arrives where and how much drugs go to one center versus the other is very poor.  There's no computerized system.  And so when a center runs out of drugs, it takes time in terms of -- for the information to get to the decision maker that could switch drugs from a center that would have too many drugs to the center that is lacking those drugs or for the system to realize that there is a risk of stock outs.

So what we're really working on with Eric Goosby now -- and I clearly see this as a political wish and move from GHI -- is that there is more integration of the PEPFAR clinics into a national system and that would hopefully allow some of those stock outs not to occur.  However, they will occur if we do not have the funding to expand the programs in general, be it PEPFAR or Global Fund.  We will be facing impossible dilemmas -- should we go on treating the cohorts of the people who are lucky enough to already access treatment or should we address new patients and enroll new patients into programs.  It's just an impossible dilemma.

I don't think in the Ugandan case the fact that we have been freezing some of the funds has anything to do with that lack of funding at this time because we actually have resumed funding for HIV in Uganda.

Thank you for the question on the detention centers.  This is -- I've already been asked this question a few times in the last 10 to 15 days and I realize there is some e-mail in circulation about that.  I know some of those centers well.  I'm even proud to have been -- again, in an earlier life -- the one who first introduced antiretroviral drug to the Binh Thanh rehabilitation or detention center in Ho Chi Min City back in 2001 in the very early days.  I think every patient who is in need of an antiretroviral drug should get the antiretroviral drugs, whether he is in an appropriate or inappropriate environment independently of his will.

So I'm currently investigating, you know, internally what do people mean by Global Fund is supporting these centers.  If our support is to provide the patients in these centers with the antiretroviral drugs they need, then I say, yes, of course.  That is what we have to do.

If that money is to fund a system that we disapprove, not only disapprove on ethical grounds but also that for which there is no evidence that it actually help in any way, then what I am saying is that I'm ready for march for it.  I'm ready to sign petitions.  I'm ready to go Vietnam and talk to the authorities and talk to the CCM.  But I will not blackmail patients by saying I will not be funding unless you do something.  I think the era when people who are donors for development aid use the power of being a donor to dictate to others what they should do is over and should be over.  It's very dangerous.

So I'm really -- and as we approach the Vienna conference, I will stand very strongly for human rights and I hope that the Global Fund appears to have a very strong stand on human rights and that I personally have a strong commitment to human rights.

But again, I cannot use human rights as an instrument or instrumentalize human rights here to potentially deprive people in need from access to life-saving drugs.  And I don't think it's for Geneva to find the solution.  I think it's for all of us, for the NGOs, for institutions and entities like yours to go to Ho Chi Min City, reopen the dialogue with the authority around what the Binh Thanh center may be.  It's for us to communicate with the Vietnamese scientists that there is no evidence whatsoever that detention centers rehabilitation force this continuation of drugs on which patients may be dependant.  There's no evidence that this works in any way, that is 80 percent people in 80 percent of the cases will go back to drugs once they've left these centers.

But that's the way I see that question.  But I'm currently, as I said, investigating internally what we're really funding.  And thank you for asking that.

MR. NAVARIO:  We're going into little bit of extra time here.  So I don't know if you're able to just stay for a few minutes.

MR. KAZATCHKINE:  Yes, I am.  Yes.

MR. NAVARIO:  Let's just take -- and if people need to leave, please do so.  We'll just stay for a few -- I'll just take three more questions and I'll work on this side of the room over and please ask them as -- a single question and as quickly as possible.  We'll do Chris and then Dave and then back here, these three on this side.

Q     Thank you very much.  At the beginning of PEPFAR and Global Fund for AIDS there was a lot of discussion and concern about absorptive capacity.  And clearly, by the progress that's made thus far there was a lot of underutilized resources that it was able to absorb.

But I'd like to get back to some the questions that are on Zambia and other countries, and Christopher Murray's recent paper that came out that a lot of this funding hasn't been additive.  It has actually -- countries have actually decreased their own spending as the donor funding has increased and whether or not this is a signal the leakage that's occurring in a lot of this funding is a signal that we've actually surpassed that absorptive capacity that the funding is growing already beyond what they can handle at this point in time.

As we're trying to scale up and ask for more money, are we going to get into the danger that if we continue to scale up, we may undermine the ability to actually increase funding?


Q     Yes.  David Bryden, Infectious Disease Society.  Just a question on HIV/AIDS prevention.  I'm wondering if -- you mentioned treatment are prevention which I think is a really important thing for all of us to get our heads around and the important results that came out from Croy (ph) about that.  And I'm wondering if you have looked at how to quantify the impact of your treatment investment on prevention.  Is there any way for you to factor that in in terms of accounting for how many infections you've prevented?

I'm taking into account the fact that obviously testing wouldn't take place in time to prevent all transmission but certainly some transmission has been blocked thanks to the reduction of viral load, thanks to your investment in treatment.  So is there some way that you can capture that in assessing your contribution to prevention?

Q     I'm Celina Schocken from Population Services International.  And I wanted to ask you, Professor Kazatchkine, about over the last few months there's been talk about increased linkages between U.S. government programs and Global Fund, particularly on comparative advantages.

And I was wondering if you could talk about what are the comparative advantages of the Global Fund model and what are some ways in which the U.S. government foreign assistance programs and other bilateral programs could work more closely with the Global Fund and take advantage of those comparative advantages.

MR. NAVARIO:  Michel, could I also just add to the first question that Chris asked, maybe you could comment on the realization of the Abuja Declaration goals and domestic investment in -- you know, Chris was talking displacement.  I think is there any -- you know, I'm wondering if there's any role for the Global Fund in encouraging and other donors in encouraging the realization of the Abuja Declaration targets?

MR. KAZATCHKINE:  Well, thank you again for those questions.  On the first question, first, in the way the Global Fund works, as I was saying in that performance-based funding way of channeling the money to countries, there is a direct relationship between absorptive capacity and how much we would disburse to a country because again, we have the system where we disburse by traunches.  So, as I said earlier, there isn't a risk or a high risk of a situation where a country would have funding that it is not able to spend.

That doesn't answer your question which is more broadly about the fact that with the large amounts of money for health that have been coming, some of that money will have been fungible and rather than additive.  There is some evidence from that in the Chris Murray paper.

Now, I think that paper has to be -- you know, whenever you read a paper, you really have to focus on the materials and methods section.  And the problem is what is a national budget?  And that is also with regard to Peter Navario's question.

When the European Commission's funding really basically goes to budget support, what is the budget of Niger?  Is it the resources of Niger itself which are basically inexistent or is it the resources of Niger plus what the European Commission has provided as budget support?  And that then biases the discussion about how much leakage or fungibility has really taken place.

So I'm now saying that there is no such fungibility.  I'm just saying -- and I discussed with Chris Murray -- and we need more data and here I look at you, Bob, but some of those analyses maybe, Bob, you would agree, are extremely difficult to perform and the data are really not very solid.  Again, it doesn't mean that that is not happening but the extent to which it's happening I think we don't really know.

For the Abuja Declaration, we have prepared a paper for our replenishment meeting which is on our website about how countries have been doing with regard to Abuja, so three things on this.

First, a number of countries are far from the 15 percent target but there is a fairly large group of countries that is between 9 (percent) and 13 (percent), which is significant progress over the 3 (percent) to 6 (percent) at the time of the Abuja Declaration.  Second, we should all be conscious that of course, even if we were to reach 15 percent everywhere, that will in no way be sufficient to cover the needs.  And third, again, a question, what is national budget when a number of donors are actually funding that national budget?

David, the answer is no, we haven't done that analysis at this time.  And thank you for actually putting that question.  No, I'm not aware of whether we -- with the rates of coverage that have currently been achieved where that analysis is pertinent but I will certainly keep that in mind.

Celina, your question is a tough one.  I would say, to me, when you think of the Paris Declaration and the Accra Agenda of Action, I think the country ownership is clearly a big plus of the Global Fund model.  I think the inclusiveness of all stakeholders is a big plus.  And then I personally think that being multilateral when it comes to responding to an epidemic is a big plus.

I often say global issues require global responses and thus a global fund.  And people have been -- you know, you've heard about how people think around the environment, of climate change or about agriculture now and how much of the Global Fund model.

So then you would say, so where are the weaknesses?  I think the weakness is in the model is the very foundation of the model which is that we have no in-country representation so that we're really funding the country and it's for the country and the partnership it builds to implement.  And that partnership -- you know well from the PSI experience -- is really functioning marvelously in some countries -- again, the Ethiopias, the Rwandas, the Zambias -- and that partnership is not functioning well in a number of other places.

And, of course, it's the places where the bilaterals do not wish to invest for various reasons including political reasons or it is places where they wouldn't invest for economic reasons because a bilateral invests with an intention that is not just the intention of fighting, you know, for health.

And this is where I think the multilateral system, be it the Global Fund and the U.N., you know, are providing a buffer system somehow.  And this is why also in all fragile states, our principal recipients of our grants is the U.N. system, UNDP and all of the governments and countries where there isn't an easy way to find a national principal recipient.  I think that would be my answer at this time.

MR. NAVARIO:  Great.  Well, I'm going to end it there.  Please join me in thanking Professor Kazatchkine for joining us at the Council.  Thank you very much.  (Applause.)

MR. KAZATCHKINE:  Thank you.  Thank you, Peter.  Thank you very much.

MR. NAVARIO:  And thanks to all of you for coming.