ZIMBABWE ARV CRISIS LOOMING

UNCLAS SECTION 01 OF 02 HARARE 001440

SIPDIS

AID/W FOR AFR/SD/HRD, G/PHN/DAA
G/PHN/POP, G/PHN/HN, G/PHN/HN/HIV
G/PHN/HN/HPSR, G/PHN/HN/EH
G/PHN/HN/CS
AFR/SA, MARJORIE COPSON

E.O. 12958: N/A
TAGS: AMED EAID PREL US ZI HIV AIDS
SUBJECT: ZIMBABWE ARV CRISIS LOOMING

1) Summary: A crisis is looming for Zimbabweans
living with AIDS on anti-retroviral (ARV)
regimens. There are currently very low stock-
levels of all ARV drugs in both the public and
private sectors. Due to foreign exchange
shortages and controls, the GOZ is either
unwilling or unable to provide adequate resources
to procure ARVS. UNICEF is trying to work out a
solution to the immediate problem by negotiating a
currency swap with the Ministry of Health (MOH).
If longer-term solutions are not rapidly found,
there is a significant risk of drug resistance or
death for those that will no longer have access to
these life prolonging drugs. End Summary.

2) Background: Zimbabwe is at the epicenter of
the HIV/AIDS pandemic and is experiencing a
generalized epidemic that has propelled the
country towards a crisis affecting every family in
the nation. The following statistics depict the
gravity of the situation: 20% of sexually active
adults (15-49 years) are HIV-infected; life
expectancy has fallen from 61 years to 34; there
are an estimated 3,290 deaths due to AIDS each
week and an estimated 1,000,000 children have been
orphaned due to AIDS. Of the 1.8 million that are
HIV positive, approximately 342,000 are in need of
(ARVs) drugs. It is estimated that only 20,000
Zimbabweans presently have access to ARVs. Half
are estimated to be receiving the ARVs from the
public sector, with the other half purchasing from
private pharmacies.

3) Candid Admission by GOZ: At a recent HIV
Care and Treatment Forum, GOZ officials were
uncharacteristically forthright on ARV stock
levels, stating that public sector stock levels
were below 3 months of supply. (Note: Minimum
standard stock levels for the ARVs should be 6
months. End note.) Stock levels in private local
pharmacies are extremely low or unavailable.

4) Broken Promises: In 2004 the Ministry of
Finance stated that it would supply the Ministry
of Health with US$2 million per month in foreign
currency to purchase ARVs. In December 2004, the
Ministry of Finance finally made US$2 million
available and the MOH used the funds to procure
generic drugs through a local manufacturer.
Despite the Ministry of Finance's commitment, no
further foreign currency has been made available
to the MOH for ARV procurement.

5) AIDS Activists: Both international and local
media have started to publicize the impending ARV
stock out crisis and the lack of foreign currency
for drug procurement generally. While AIDS
activists in Zimbabwe are rarely vocal, they have
recently banded together to petition the Governor
of Zimbabwe's Reserve Bank to make foreign
currency available for ARVs.

6) Price Increases: The price of ARVs for
patients receiving care in public sector health
facilities has remained stable for over a year at
a subsidized rate of less than US$2 for a month's
supply. The cost is rapidly escalating, however,
at private sector pharmacies due to high inflation
(359%) and the rising cost of foreign currency.
In July alone, the cost of a month's supply of
generic fixed-dose combination ARVs increased from
US$7 to US$17; the same supply now costs US$46.
Like most commodities in Zimbabwe, the price of
ARVs increases weekly, if not daily. With an
estimated 75% unemployment rate in the formal
sector, and 80% of the population living below the
poverty line, the reality is that the vast
majority of Zimbabweans can ill afford the price
of ARVs even at a subsidized rate. In addition,
there are significant other costs to accessing
ARVs, such as laboratory tests or even transport
to a health facility.

7) Drug Resistance: Increased ARV prices and
shortages will inevitably have dramatic
repercussions for patients on treatment. ARVS
need to be taken consistently, on a daily basis,
as interruptions can cause resistance to the
drugs. As costs rise and supplies are inadequate,
doctors fear that patients may cope by reducing
the quantity they take on any given day or by not
being able to take the drugs at all.

8) Foreign Currency: The cause of the low
stocks of ARV drugs is the acute shortage of
foreign currency to purchase the drugs
internationally. While Zimbabwe has some local
production of generic ARVs, the sole local
manufacturer (Varichem Pharmaceuticals Private
Limited) is also facing problems due to shortages
of foreign currency needed for importation of raw
materials to produce the drugs.

9) Global Fund: Zimbabwe has received limited
amounts of Round 1 Global Fund monies devoted to
ART, insufficient to cover the current national
requirements. In October, Zimbabwe was awarded
Round 5 monies. However, it is unlikely these
monies will flow quickly enough to mitigate the
national shortages. Moreover, the Global Fund
proposal specified intensive coverage of only a
limited number of districts, not to the overall
national supply. Thus Zimbabwe may, in fact, be
put into a contradictory predicament to 'scale up'
ART in certain districts per the Global Fund
proposal, while running out of supplies in many
other districts.

10) Local Currency Swap: UNICEF is actively
trying to put together a solution to the immediate
drug shortage by negotiating a currency swap with
the MOH. Under this plan, the GOZ would provide
local currency to UNICEF/Zimbabwe which, in turn,
would use its foreign currency and its procurement
channels to procure ARVs for the GOZ public health
system. UNICEF/Zimbabwe would use the local
currency supplied by the GOZ for its own in-
country operating costs. Last week, the MOH
hosted a meeting in which it proposed that donors
and international NGOs also participate in the
swap mechanism and that UNICEF manage the funds
and procure the ARVs.

11) Comment: A number of questions remain
regarding whether the GOZ will be able to solve
the ARV shortage. Even with UNICEF's assistance,
it is unclear at this point if the Ministry of
Finance will approve the proposed swap process
and, if it does, whether it will provide
sufficient local currency for it to work. Even if
all goes well with the proposed swap, the
underlying problem is Zimbabwe's fast contracting
economy which is simply not generating the foreign
exchange necessary to pay for the country's import
needs: food, fuel, electricity, drugs, etc.
Zimbabweans currently taking ARVs and the hundreds
of thousands still in need of these drugs are
increasingly taking note of the GOZ's expenditures
on foreign travel, imported vehicles and large
arrearage payments to the IMF. They are starting
to openly question the GOZ's priorities for
foreign currency and whether these include their
needs for life saving drugs.
DELL