The North-South Institute



How to fund AIDS treatment for everyone

August 10, 2006


The Ottawa Citizen under the title 

On July 1, travelers at French airports began paying a “Solidarity Levy” on each ticket, with the revenue dedicated to combating global pandemics.  Travelers at Chilean airports have been doing so for six months, up to 15 other countries are pledged to follow suit, and the UK has promised to contribute from an existing airlines tax.  Numbers of travelers to the International AIDS Conference in Toronto will be contributing, even though Canada has not yet shown much interest in the potential of the levy.

The Solidarity Levy and the UNITAID drug purchase facility it will fund are the result of a combination of political leadership from the “south” and the “north”, begun two years ago by Presidents Lula of Brazil and Chirac of France in their Action Against Hunger and Poverty initiative.  It engages presently Chilean, Spanish, German, Norwegian and about 40 other governments in a Leading Group on Innovative Financing for Development.  The group, which met in Brasilia in July, promotes pilot projects in providing funds for key development objectives – like combating pandemics – which are additional to annual official development assistance in national budgets.  The overall objective is to multiply support for the internationally endorsed objective of universal access to prevention, care, treatment and support by 2010.

The UNITAID drug purchase facility seeks to assure not only increased accessibility to key medicines, diagnostics and other products, but to ensure that the essential objective of sustained and predictable supplies is met, something which, it is argued, official aid budgets fluctuating at government whim cannot assure.  The facility would seek leverage to achieve reduced prices using its own collective bargaining power and through collaboration with other actors like the Clinton Foundation. The project is moving forward quickly, from initial announcement early this year to the likely launch at the September 2006 UN General Assembly and operation beginning in October.

Non-governmental participants in the Leading Group meetings note that raising funds is not enough.  They point out that a number of countries receiving funds from international agencies like the Global Fund are paying much more than the best price for sole source medicines.  If UNITAID is really to be effective and efficient it must ensure that its funds are not wasted in this fashion.  The NGOs argue that the associated governments must act to break the strangle-hold of big-Pharma patent-holders.  Further as more and more people on treatment graduate from first-level drugs and face the still high-cost second stage drugs, initiatives are needed to open up to generic competition and research and development-oriented patent pooling to bring prices down and ensure that medicines appropriate to conditions in most-affected countries are available and affordable.

The funds likely to be raised by the Solidarity Levy are significant, but nowhere near the billions required annually if the goal of universal access to treatment is to be reached in four years.  Luckily the Leading Group has a number of other initiatives under review.  The currency transaction tax (CTT), a tiny levy on the trillions of daily dollars in play international exchange would yield the scale of funds required.  The Canadian parliament is on record as favoring Canadian participation in such a venture, but enthusiasm chills at the Department of Finance.  The Harper government could break the ice by joining Norway, France and others in a pilot on the CTT and participation in the Leading Group.

The Solidarity Levy is the sort of idea that might have been laughed at in higher international financial circles only months ago.  As French President Chirac said as he convened a major ministerial meeting in Paris in March, “the proposals were considered completely unrealistic a very short time ago…Now they are discussed in all the major international forums, at the G8 meetings, in the United Nations, in the Bretton Woods institutions, and within the European Union and within the African Union.”  Chirac argues that many of the profits of globalization remain untaxed.  As the German Development Minister responded: “Global tasks demand global financing. If we are to achieve the Millennium Development Goals, we have no option but to introduce innovative financing instruments.”

To achieve the current innovations, the magic link to an urgent human security goal – saving and extending millions of lives through the defeat of AIDS – has been essential. One wonders when that magic will spark initiative from Canada.

John W. Foster is Principal Researcher a The North-South Institute and a member of the Global Treatment Action Group (GTAG). He was a speaker at the recent first plenary conference of the Leading Group in Brasilia.