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	Background

PEPFAR’s original authorization in 2003 established the Office of the U.S.  Global AIDS Coordinator (OGAC) at the Department of State (State) and  gave OGAC primary responsibility for the oversight and coordination of all  resources and international activities of the U.S. government to combat  the HIV/AIDS pandemic. OGAC also allocates appropriated funds to  PEPFAR implementing agencies, particularly CDC and USAID. CDC and  USAID obligate the majority of PEPFAR funds for HIV treatment, care,  and prevention activities through grants, cooperative agreements, and  contracts with selected implementing partners, such as U.S.-based  nongovernmental organizations (NGO) and partner-country governmental  entities and NGOs.
This includes the 33 countries and three regions that developed PEPFAR annual  operational plans for fiscal year 2012. The 33 countries were Angola, Botswana, Burundi,  Cambodia, Cameroon, China, Côte d’Ivoire, Democratic Republic of the Congo,  Dominican Republic, Ethiopia, Ghana, Guyana, Haiti, India, Indonesia, Kenya, Lesotho,  Malawi, Mozambique, Namibia, Nigeria, Russia, Rwanda, South Africa, South Sudan,  Swaziland, Tanzania, Thailand, Uganda, Ukraine, Vietnam, Zambia, and Zimbabwe. The  three regions were the Caribbean, Central America, and Central Asia. that also provide support to HIV programs. Moreover, UNAIDS data  indicate that support for HIV programs in many countries is increasingly a  mix of resources from the country government, Global Fund, PEPFAR,  and other donors. PEPFAR strategy stresses the importance of having  the partner-country government play the coordinating role.
PEPFAR funding supports country programs that provide comprehensive  HIV treatment—a broad continuum of treatment, care, and supportive  services. This continuum begins with HIV testing and associated  counseling, during which patients learn their HIV status and receive  interventions to help them understand test results and link them to  subsequent HIV treatment services. For individuals who are HIV positive,  eligibility for ARV treatment is assessed by means of standard clinical or  laboratory criteria—using CD4 count tests to measure the strength of a   Patients eligible for treatment receive ARV  patient’s immune system. drugs as well as regular clinical assessment and laboratory monitoring of  the treatment’s effectiveness. Patients on ARV treatment also receive  various care and support services such as treatment of opportunistic  infections including TB co-infection, nutritional support, and programs to  promote retention and adherence to treatment. Patients are expected to  take ARV drugs on a continuing, lifelong basis once they have initiated  treatment.
CD4 (cluster of differentiation antigen 4) cells are a type of white blood cell that fights  infection. The CD4 count test measures the number of CD4 cells in a sample of blood.  Along with other tests, the CD4 count test helps determine the strength of the person’s  immune system, indicates the stage of the HIV disease, guides treatment, and predicts  how the disease may progress. Normal CD4 counts range from 500 to 1,000 cells/mm. never been on ARV treatment, pediatric patients, and pregnant and  breastfeeding women. In 2010, WHO updated its guidelines to  recommend ARV treatment for all people with CD4 counts of less than  350 cells/mm Treatment and Care include many of the clinical, laboratory,  and support services that make up the comprehensive HIV treatment  continuum as well as support services for orphaned and vulnerable  children. Prevention includes interventions to prevent HIV infection, such  as preventing mother-to-child transmission of HIV, sexual prevention, and  medical male circumcision. The program area known as Other includes  PEPFAR funds for efforts to strengthen health care systems, establish or  enhance laboratory infrastructure, and provide strategic health  information. For additional detail on the services budgeted in each  PEPFAR program area and associated PEPFAR budget codes, see  appendix II.

	Lower-Priced ARV Drugs, Economies of Scale, and Program Maturity Have Helped Reduce Per-Patient Costs and Contributed to Expanding Treatment Programs PEPFAR’s Reported Per- Patient Treatment Costs Have Declined Substantially

Declining prices for ARV drugs have been a key source of per-patient  cost savings, with most of these savings coming from the purchase of  generic ARV drugs. Costs have also declined because programs have  benefited from economies of scale and program maturity as they have  expanded. These savings have contributed to substantial growth in  treatment programs—both in the number of patients that PEPFAR directly  supports on treatment, as well as the number of patients treated within  the country programs that PEPFAR supports more broadly.
OGAC has reported a substantial decline in PEPFAR per-patient  treatment costs, from $1,053 in 2005 to $339 in 2011. Using available  program information, PEPFAR calculated these costs by dividing specific  elements of its budgets for HIV treatment in a given year by the number  of reported patients for the subsequent year (see fig. 1). For this  calculation, PEPFAR defined its HIV treatment budget as the total amount  budgeted for ARV drugs (hereafter referred to as ARVs), adult treatment,  pediatric treatment, and laboratory infrastructure. The number of patients  currently on ARV treatment directly supported by PEPFAR is routinely  reported by country teams at the end of each fiscal year. PEPFAR  officials told us that they use HIV treatment budgets to approximate  trends in PEPFAR’s per-patient treatment costs because they lack  detailed information on the costs of comprehensive HIV treatment over  time. They acknowledged that the calculation is a rough approximation  that does not capture the full scope of PEPFAR funds spent to support  the broad continuum of services under comprehensive HIV treatment.  The calculation also does not capture funds from other funding sources.
Detailed PEPFAR studies of the estimated costs of providing  comprehensive HIV treatment services in eight countries also show  declining per-patient treatment costs. The average of PEPFAR’s  estimates includes costs not only to PEPFAR but also to other funding  sources for PEPFAR-supported treatment programs. Using the data from  the country treatment-cost studies, PEPFAR estimated that in fiscal year  2011 the per-patient cost of providing comprehensive HIV treatment  services averaged $768, with PEPFAR’s share amounting to an  estimated $335. In comparison, the estimated per-patient treatment cost  in fiscal year 2010 was $812, with PEPFAR’s share amounting to an  estimated $436 of the total. These estimates represent average costs  because per-patient treatment costs vary by country, by treatment facility  within a country, and by different types of patients, such as adult patients  on ARV treatment versus pediatric patients on ARV treatment.

		Generic Products and Lower Prices Paid for ARV Drugs Have Been Key Factors Contributing to Declining Per-Patient Treatment Costs

Two key factors have contributed significantly to declining per-patient  ARV drug costs in PEPFAR-supported treatment programs: (1) the  increasing use of generic products and (2) decreasing prices for specific  ARV drugs.
From fiscal year 2005 to 2011, PEPFAR-supported treatment programs  substantially increased their use of generic products, as shown by  PEPFAR’s data on ARV purchases. In fiscal year 2005, the first year  when PEPFAR purchased ARVs, generics represented about 15 percent  of ARV purchases (by volume). By fiscal year 2008, generic ARV  products had risen to 89 percent of purchases. By fiscal year 2011, 98  percent of all ARVs PEPFAR purchased were for generic products.  Although PEPFAR’s overall increases in generic ARV purchases have  been steady and substantial over the 7 years of data that we reviewed,  the percentage of PEPFAR purchases for generic ARVs each year has  varied across countries based on the availability of quality-assured  generic products in each country. This is because PEPFAR purchases  only quality-assured ARV products that comply with the laws—including  patent and drug-registration laws—that apply in each partner country. For  example, because of country-specific requirements in South Africa, in  fiscal year 2008 only 25 percent of the ARVs that PEPFAR purchased in  South Africa were generic products. In 2010 and 2011, PEPFAR worked  with the South African government to update its ARV procurement  processes, and in fiscal year 2011 almost 97 percent of PEPFAR- purchased ARVs in South Africa were generic.
PEPFAR estimates that in fiscal years 2005 to 2011, it saved almost $934  million by buying generic versions of ARVs instead of equivalent branded  products. PEPFAR estimated these savings by determining the amount it  spent each year on quality-assured generic products that have an  equivalent branded product. for those generics with internationally negotiated prices for the equivalent  branded products. (See table 1.) Purchasing generic ARVs has also  allowed PEPFAR to broaden the selection of ARVs it purchases to  include WHO-recommended products, particularly fixed-dose combination  products that do not have an equivalent branded formulation. However,  PEPFAR has not estimated savings associated with purchasing these  fixed-dose combination products because there are no branded  equivalents.
An equivalent branded product is one that contains the same active ingredients and is  available in the same form—tablet, capsule, liquid—and dose (for example, 100 mg and  300 mg).

			Decreasing Prices for Specific ARV Drugs

PEPFAR has also benefited from declining prices for specific ARV  products, which have led to declining prices for the ARV treatment  regimens recommended for use in resource-limited settings. WHO  recommends that most patients starting ARV treatment for the first time  receive one of several first-line regimens that combine three ARV drugs.  Based on updated 2010 WHO treatment guidelines, these first-line  regimens are built from combinations of the following six ARVs: tenofovir  disoproxil furmarate (tenofovir), zidovudine, lamivudine, emtricitabine,  nevirapine, and efavirenz. WHO’s 2010 guidelines recommended that  countries move away from including stavudine, a previously  recommended ARV, in first-line regimens, because of toxicities  associated with the drug. Instead, WHO recommended that countries use  tenofovir or zidovudine. At the time, stavudine had been a preferred  component of many countries’ first-line regimens and was relatively  inexpensive. In contrast, tenofovir and zidovudine were relatively more  expensive. While prices for tenofovir-based regimens remain higher than  prices for the stavudine regimens they replace, tenofovir prices have  declined to the point where they are, on average, lower than prices for  zidovudine, the current first-line alternative. Figure 2 shows how average  prices have declined for three comparable first-line treatment regimens.
PEPFAR has analyzed program characteristics that affect per-patient  costs as treatment has expanded in PEPFAR-supported programs.  PEPFAR evaluated treatment costs using a cost estimation approach that  includes detailed country treatment-cost studies as its primary  information source. These studies collect data through patient records  and interviews from a selected number of delivery sites. PEPFAR has  conducted country treatment-cost studies in eight countries. Five studies  were completed in 2009 (Botswana, Ethiopia, Nigeria, Uganda, and  Vietnam); two studies were completed in 2011 (Mozambique and  Tanzania); and one study was completed in 2012 (Kenya). In the country  treatment-cost studies, ARV and non-ARV drug costs (e.g., equipment,  personnel, and supplies) were identified and evaluated over a period of at  least 1 year as the treatment program expanded. Each country treatment- cost study stated that per-patient treatment costs declined over its  evaluation period, from a 6 percent decline in Kenya’s 2012 study to a 74  percent decline in Vietnam’s 2009 study.
In addition, a November 2012 peer-reviewed journal article summarized  findings from PEPFAR-supported studies of the costs of providing  comprehensive HIV treatment services. This analysis used available data  (collected from 54 delivery sites across six country treatment-cost  studies) to analyze the factors that contribute to declining per-patient   The summary analysis concluded that program scale  treatment costs. and maturity had the most significant relationship with per-patient costs.
The 2012 summary analysis of the 54 delivery sites from six country treatment-cost  studies was conducted by selecting possible factors (excluding ARV drugs) that might  describe site characteristics and influence costs. The analysis used statistical modeling to  identify the relationship between selected factors and costs. See N. A. Menzies, A. A.  Berruti, and, J. M. Blandford, “The Determinants of HIV Treatment Costs in Resource  Limited Settings,” PLOS ONE, vol. 7, issue 11 (2012). supported by the site in a defined period—and reduced per-patient  treatment costs. This analysis estimated a 43 percent decline in per- patient costs if an additional 500 to 5,000 patients are put on ARV  treatment, and a 28 percent decline in per-patient costs if an additional  5,000 to 10,000 patients are put on ARV treatment. Program scale was  also identified in the eight country treatment-cost studies as a factor  affecting per-patient treatment costs, as each country experienced large  increases in the number of people put on ARV treatment after rapid  expansion in clinic capacity and infrastructure in PEPFAR-supported  treatment programs. Officials told us that these reductions with program  scale are due to the efficiencies gained with larger patient cohorts.
The 2012 summary analysis also identified a relationship between the  program maturity—the time elapsed since sites began expanding their  treatment programs—and reduced per-patient treatment costs. The  summary analysis determined that per-patient costs declined an  estimated 41 percent from 0 to 12 months, and declined an estimated 25  percent from 12 to 24 months. The majority of country treatment-cost  studies found that the first year following expansion saw the greatest  reduction in costs, followed by minor cost reductions in later evaluation  periods. In each country studied, the expansion of treatment programs  included one-time investments, such as training and equipment costs, as  well as ongoing costs, such as personnel and laboratory supplies, that  were analyzed over time. After the large increase in funding at the  beginning of the study period, one-time costs fell by the end of the study  period in all eight countries, ranging from a 9 to 93 percent decline.  Ongoing costs also fell from the beginning to the end of the evaluation  period, ranging from a 16 to 59 percent decline. PEPFAR attributes the  relationship between declining per-patient treatment costs and program  maturity as due primarily to the reduction in one-time investments and in  part to fewer resources needed for ongoing investments as the programs  expanded treatment. Officials also told us that as treatment programs  mature, experience providing comprehensive HIV treatment can lead to  program efficiencies—such as maximizing work flow in outpatient  clinics—that reduce per-patient costs.

		As Per-Patient Costs Have Declined, PEPFAR Has Supported Treatment for More People

As per-patient treatment costs have declined in PEPFAR-supported  programs, savings have contributed to substantial increases in the  number of people on ARV treatment, including both people directly  supported by PEPFAR and those who receive treatment through country  programs (see fig. 3). Since the end of fiscal year 2008, PEPFAR has  directly supported ARV treatment for over 3.3 million additional people.
Moreover, in fiscal year 2012 PEPFAR added more people to ARV  treatment than in any previous year.
As a result of the recent increases in the number of people on ARV  treatment, PEPFAR reports that it has met the requirement in the 2008  Leadership Act to increase the number of patients on ARV treatment  proportional to changes in appropriated funds and per-patient treatment  costs. PEPFAR calculations indicate that, while funding for PEPFAR  increased by about 10 percent and average per-patient treatment costs  declined by almost 67 percent from fiscal year 2008 to 2011, the number  of people under treatment due to direct PEPFAR support increased by  125 percent compared with the 2008 baseline. On the basis of these  results, PEPFAR anticipates that it will continue to exceed the mandated  treatment targets and is also making progress towards meeting another  target—set by the President in December 2011—that calls for PEPFAR to  provide direct support for ARV treatment for more than 6 million people by  the end of fiscal year 2013.
In addition to increasing the number of people it directly supports on ARV  treatment, PEPFAR has supported partner countries in expanding their   Declining per-programs to provide ARV treatment to more people. patient treatment costs have contributed to the countries’ abilities to  expand their programs. Additionally, PEPFAR has increased its efforts to  strengthen the capacity of partner-country programs to deliver treatment  services. Some country governments are also contributing additional  resources to treatment programs. As a result, national programs have  also expanded rapidly. For example, in South Africa an estimated 1.7  million people were on ARV treatment at the end of 2011, almost 1 million  more than were on ARV treatment at the end of 2008, according to  UNAIDS data. Similarly, in Kenya almost 540,000 people were on ARV  treatment at the end of 2011, an increase of almost 290,000 since 2008.

	PEPFAR Cost Information Supports Efforts to Expand Country Treatment Programs but Has Limitations

PEPFAR expects that total costs for country programs will increase over  the near term if country treatment programs expand to reach unmet  needs and adhere to updated international guidelines. PEPFAR’s current  cost information could help partner countries expand treatment because  the information is useful for planning and identifies cost-cutting  opportunities. However, PEPFAR’s cost estimation and expenditure  analysis approaches have certain limitations—primarily relating to the  timeliness and comprehensiveness of data—that do not allow PEPFAR to  capture the full costs of treatment programs.

		Total Treatment Costs Are Expected to Increase over the Near Term as More People Receive Treatment

Despite decreasing per-patient treatment costs, PEPFAR expects that  country treatment programs will continue to expand to address large  unmet needs, resulting in increases in total treatment costs. For example,  in Uganda’s treatment cost study, although the estimated per-patient  treatment cost in Uganda fell by 53 percent over the course of the  evaluation, the total site-level costs grew as the program expanded to  treat more people. As of 2011, Uganda had provided ARV treatment to  about 290,000 people—half the number of those eligible for ARV  treatment. In its 2012 country operational plan, Uganda set a goal of  providing ARV treatment to 347,000 people with direct PEPFAR support.  Given the magnitude of the unmet need for treatment in Uganda and  other PEPFAR partner countries, higher treatment goals will continue to  drive the expansion of treatment programs, and PEPFAR expects this will  add to the amount of resources required.
PEPFAR partner countries are also considering treatment program  expansion on the basis of emerging scientific evidence. The new  evidence demonstrates that ARV treatment can be highly effective not  only for treating people with HIV but also for preventing HIV-positive  people from transmitting the virus to others. In early 2012, WHO updated  its guidance for certain elements of ARV treatment that advises countries  to expand treatment programs to new groups, which will increase total  treatment costs. The 2012 updates did not change WHO’s  recommendations about when to initiate ARV treatment; however, the  revised guidance described the long-term benefits of expanding eligibility  for ARV treatment in several categories of HIV-positive people, including  all pregnant and breastfeeding women and certain high-risk populations,  in order to prevent HIV transmission. Some countries are beginning to  expand eligibility for ARV treatment to some of these groups, particularly  by initiating lifelong ARV treatment for all HIV-positive pregnant and  breastfeeding women as part of concerted efforts to eliminate mother-to- child transmission of HIV. UNAIDS estimates that expanding programs to  these groups would increase the number of people in low- and middle- income countries who are eligible for ARV treatment by over 50 percent,  from 15 million to 23 million.
PEPFAR and its partner countries use cost information to plan for  expanding treatment programs. For example, some of PEPFAR’s country  treatment-cost studies have projected total costs under different  scenarios of expanded treatment. Four of the eight country treatment-cost  studies we reviewed included scenarios that project total costs with  different patterns and rates of treatment expansion over a 3- or 5-year  period. For example, Nigeria’s 2009 country treatment-cost study  projected costs under three scenarios: (1) keeping its treatment targets at  2008 levels, (2) adding 100,000 patients, and (3) adding more than  200,000 patients, which represented half of those estimated to need ARV  treatment in 2008.

		PEPFAR Has Detailed Cost Information but Needs More Timely and Comprehensive Data

or  including more widespread approach to HIV testing with immediate initiation of ARV  treatment for those found to be HIV positive. These estimates would increase the number  of people eligible for ARV treatment to 25 million and 32 million people, respectively. routine cost monitoring and in-depth facility-based cost studies—that  countries can use to produce robust information on costs at local and  national levels.and help identify opportunities for greater efficiency.
Such information can be used to analyze program costs  PEPFAR uses two complementary approaches to analyze costs in the   One approach provides comprehensive in-depth programs it supports. analysis of treatment costs, while the other approach will provide routine  monitoring of spending data specific to PEPFAR. However, neither  approach captures the full costs to country treatment programs of  meeting increasing demand and resource needs in environments that are  continually changing.
PEPFAR’s cost estimation approach identifies the costs of providing  comprehensive HIV treatment services in a partner country, examines the  range of the costs across delivery sites and types of patients, and  analyzes the costs over a period of at least 1 year. This approach—and  the country treatment-cost studies conducted as its primary information  source—provides valuable information on the costs of delivering  comprehensive HIV treatment services. The country treatment-cost  studies consist of in-depth analysis from patient record data and  interviews from a selected number of delivery sites—outpatient clinics  that provide comprehensive HIV treatment services. Each delivery site’s  data is grouped by cost unit and segmented into 6-month periods in  order to examine ARV drug and non-ARV drug costs over time. Cost  estimation allows PEPFAR to assess costs to itself and to other funding  sources—country governments, including Global Fund contributions, and  other local and international organizations. However, there are three key  limitations.
First, the cost estimation approach has provided valuable information on  the costs of delivering comprehensive HIV treatment services, but a lack  of timely data is a significant limitation, particularly given the rapid pace of  change in treatment programs. Data for five of the eight country  treatment-cost studies were collected between April 2006 and March  2007—before the significant expansion of country treatment programs.  PEPFAR officials noted that changes in treatment program costs can  happen too fast to be captured, and because the data collection and  analysis for country treatment-cost studies are time and resource  intensive, the reported results from the studies lag behind conditions on  the ground. PEPFAR collects retrospective data for a determined period  of time—typically a few months—and analyzes that data for treatment  costs and results, which requires a period of typically 2 years. For  example, Nigeria’s treatment-cost study involved data collection at nine  delivery sites and supporting organizations from April to October 2006,  but the final report on the results was completed in December 2009.  Moreover, most country cost estimates included data collected in 6-month  periods beginning at or around the start of PEPFAR support, thus  providing cost information on the impact of treatment expansion with  PEPFAR funds. Only one country treatment-cost study—Kenya’s 2012  study—covered a time period of data collection that could indicate how  costs changed after PEPFAR’s increased support of expanded treatment  programs.
Second, PEPFAR’s cost estimation approach has been limited in the  scope of information it has provided because of the small number and  type of delivery sites selected. For seven of the eight country treatment- cost studies, patient record data consist mostly of data that typically were  collected from nine outpatient clinics per country that received direct or  indirect PEPFAR support. In addition, PEPFAR reports that the selected  sites vary in how representative they are of the respective country  program.among sites because the services provided may differ widely.  Additionally, services and costs at sites in one country may not represent  the type of services provided under comprehensive HIV treatment  available across other PEPFAR partner countries, which makes it difficult  to identify best practices that can be applied to other programs to  increase program efficiency. However, PEPFAR’s most recent country  treatment-cost study (completed in Kenya in October 2012) included 29  delivery sites and was the first study to use random sampling to select  sites. PEPFAR officials characterized the study as a representative  sample of the country’s delivery sites. Separately, limited information is  available for sites not supported by PEPFAR. Although entities outside  PEPFAR have conducted studies to estimate treatment costs at different  sites, PEPFAR reports that these studies have not assessed as many  services (e.g., services for people living with HIV who are not yet on ARV  treatment), and, as a result, there were not sufficient, comparable data  available for a meaningful comparison of costs.
The costs of comprehensive HIV treatment services vary  Third, although PEPFAR’s cost estimation process enables it to analyze  costs at the treatment facility level for PEPFAR and other funding  sources, it does not include program management costs incurred above  the facility level. In addition, PEPFAR has identified but not analyzed  possible cost benefits associated with improved patient outcomes from  standardization and extended monitoring intervals for stable patients, and  continued decreases in ARV drug pricing because of better tolerated  regimens and declines in second-line regimen formulations. Challenges in  linking cost data to patient outcomes data was identified as a limitation by  all of the country treatment-cost studies. Information on program  management costs and outcomes will become increasingly important as  countries take on additional responsibility for supporting treatment  delivery and allocating resources across all program sites.
To obtain more timely cost information, PEPFAR began piloting the use of  expenditure analysis in 2009 to review country-specific PEPFAR  spending across program activities, including treatment. PEPFAR’s  expenditure analysis approach involves collecting data from PEPFAR  implementing partners on amounts that each partner spent to provide  direct or indirect treatment services, and links that spending to the  numbers of patients receiving support for treatment through the partner.  The expenditure analysis approach updates costs rapidly and includes  information on PEPFAR costs above the facility level. Between 2009 and  2012, PEPFAR completed nine expenditure analysis pilots in eight  countries. PEPFAR officials told us that, during fiscal year 2012, it  began to use its formal expenditure analysis approach in a different set of  nine countries, and these analyses were completed and disseminated to  countries in February 2013. PEPFAR uses expenditure analysis to  identify spending outliers among its implementing partners. PEPFAR  officials said they use that information to discuss with implementing  partners the causes of their relatively high or low expenditures per patient  and to identify potential efficiencies that other partners can implement.  For example, in Mozambique—the first country to complete a second  expenditure analysis—PEPFAR officials found that the variation of per- patient expenditures for non-ARV drug costs narrowed among five  implementing partners between 2009 and 2011. PEPFAR attributed the  smaller range of expenditures in part to their ability to use expenditure  analysis data to stress efficient delivery of services.
Expenditure analysis does not provide a comprehensive picture of  treatment costs, because it only includes spending by PEPFAR  implementing partners. Although expenditure analysis enables PEPFAR  to allocate resources more efficiently by comparing its implementing  partners, it does not include spending from partner-country resources and  other funding sources. Because PEPFAR cannot require reporting for  non-PEPFAR resources, PEPFAR officials stated that using diplomatic  efforts with country governments has been a priority to enable sharing of  expenditure data. PEPFAR has reported that the vast majority of patients  on PEPFAR-supported ARV treatment receive services in the public  sector (36 of the 43 delivery sites among the five country treatment-cost  studies completed by 2009 were government-run facilities). As a result,  cost information across all treatment partners at the facility and country  level is important for facilitating fully informed discussions among those  partners about current and future resource allocation. (The features of  PEPFAR’s cost estimation and expenditure analysis approaches for  obtaining cost information are described in table 2.)
Each of PEPFAR’s complementary approaches provides cost information  that can help countries to plan for the efficient expansion of treatment  programs, and PEPFAR has made some plans to strengthen each  approach. As of February 2013, PEPFAR was preparing three additional  country treatment-cost studies, including a follow-up study in Tanzania— PEPFAR’s first repetition of a study in a partner country. In addition,  PEPFAR has shortened the time frame for examining costs, compared  with the time frames for earlier studies. In the Kenya, Mozambique, and  Tanzania treatment-cost studies that were completed in 2011 and 2012,  the data collection period for all facilities was a maximum of 1 year (or two  6-month periods). PEPFAR officials told us that cost estimation is  important for identifying cost drivers, especially because it includes non- PEPFAR costs and can be used to develop cost projections for various  treatment scenarios. However, because the studies are in-depth  analyses, requiring extensive field work, they will continue to be time and  resource intensive. PEPFAR officials told us that conducting country  treatment-cost studies more regularly has not been their highest priority;  they noted that their efforts have been focused on implementing  processes for routine expenditure analysis in PEPFAR partner countries.  Although PEPFAR has taken steps to strengthen cost estimation, country  treatment-cost studies have been conducted in only a small number of  countries (eight partner countries) and delivery sites (usually about nine  clinics per country). In addition, although PEPFAR-supported treatment  programs are changing rapidly, for five of the eight studies that have been  completed, data were collected between 2006 and 2007. PEPFAR  currently does not have a plan for systematically conducting or repeating  country treatment-cost studies, as appropriate, in partner countries.  Without such a plan, PEPFAR may be missing opportunities to identify  potential savings, which are critical for expanding HIV treatment programs  to those in need.
Using the expenditure analysis approach to obtain more rapid cost  information to inform planning efforts by country teams addresses the  timeliness limitations of the country treatment-cost studies, but does not  capture non-PEPFAR costs. However, PEPFAR officials told us that non- PEPFAR spending data are difficult to obtain because the budget  processes of each partner are often not aligned and country systems may  not be structured to aggregate HIV-specific data. For example, in an  expenditure analysis pilot in Guyana, officials said that aligning  expenditure categories across all treatment partners (PEPFAR, Global  Fund, and Guyana Ministry of Health) was a time-consuming process  requiring negotiation with the country government on the level of  alignment needed. PEPFAR reports that it has engaged with country  governments and multilateral partners to address the ability to capture full  country-expenditure data. Further, it has begun collaborating with up to  three countries to obtain expenditure data for the full country program  during 2013. Although we recognize the difficulties involved in capturing  non-PEPFAR expenditures, these spending data are important for  decision makers as countries take on additional responsibility for  allocating resources. PEPFAR officials told us that, by the end of fiscal  year 2014, they plan to roll out formal expenditure analysis to all PEPFAR  countries as part of annual reporting requirements; however, they said  there are no current plans to routinely capture non-PEPFAR costs in  those analyses. Without comprehensive data on expenditures, PEPFAR- supported programs will not be fully informed when making decisions  about how to allocate resources.

	Using OGAC’s Budgetary Formula, PEPFAR Has Met the Treatment Spending Requirement, but the Formula Does Not Fully Account for All Funds

The 2008 Leadership Act requires that more than half of PEPFAR funds  be used to support specific aspects of treatment and care for people living  with HIV. Using an OGAC-developed budgetary formula, PEPFAR has  met this treatment spending requirement. Since PEPFAR was  reauthorized in 2008, PEPFAR country teams’ budgets allocated to  capacity building have increased. However, funding for capacity building  is excluded from OGAC’s formula. OGAC currently does not have a  methodology to account for the extent to which these funds contribute to  HIV treatment and care. As a result, it is not possible to determine the full  amount of PEPFAR funds that are allocated to support the HIV treatment  and care services identified in the spending requirement.

		Using OGAC’s Budgetary Formula, PEPFAR Has Met the Treatment Spending Requirement

Budgets for “treatment and care for people living with HIV”  (Budgets for Treatment + Care + Prevention program areas)
To determine the amount of the PEPFAR budget that constitutes  “treatment and care for people living with HIV,” OGAC sums the amounts  allocated by all country teams each year to six of the seven budget codes  within the Treatment and Care program areas (see app. II for more details  regarding this calculation).
PEPFAR budget data indicate that, using OGAC’s budgetary formula, the  program met the spending requirement each year since reauthorization.  Between fiscal years 2008 and 2012, the calculated budget for “treatment  and care for people living with HIV” ranged from approximately 54 to 52  percent of total budgets for the Treatment, Care, and Prevention program  areas.

		Current Budgetary Formula Does Not Account for Increased Proportion of Funding Allocated to Country Capacity Building

OGAC’s budgetary formula implementing the treatment spending  requirement does not account for the increasing proportion of funds that  PEPFAR country teams have allocated to country capacity building. The  2008 Leadership Act identifies health capacity building in order to  promote the transition toward greater sustainability through country  ownership as one of the purposes of the law. Consistent with this  principle, PEPFAR country teams have increased investments to  strengthen country health systems. These funds, which are typically  allocated in the “Other” program area budget codes—health systems  strengthening, strategic information, and laboratory infrastructure—are  excluded from OGAC’s budgetary formula. However, from fiscal year  2008 to fiscal year 2012, country team budgets for the Other program  area increased from $574 million to $710 million. Over the same time  frame, OGAC-defined budgets for “treatment and care for people living  with HIV” declined from about $1.8 billion to $1.4 billion. Total budgets for  the Treatment, Care, and Prevention program areas were relatively  constant from fiscal year 2008 to 2011 but declined to $2.6 billion in fiscal  year 2012. (See fig. 4.) By fiscal year 2012, budgets in the Other program  area represented more than 21 percent of all program area budgets, up  from about 15 percent in fiscal year 2008.
OGAC officials told us that the current budgetary formula was developed  based on OGAC’s interpretation of the intent of the treatment spending  requirement. Calculating the proportion of funds allocated to specific  activities as a percentage of total country budgets allocated to the  Treatment, Care, and Prevention program areas—excluding budgets for  the Other program area—is consistent with the methods OGAC used to  track spending under the first PEPFAR authorization. OGAC officials said  that this approach allows OGAC to isolate budgeted funds that support  the direct services that PEPFAR delivers to patients at the facility level,  consistent with PEPFAR’s early focus on directly delivering treatment  services as part of a broad emergency response.
As PEPFAR’s role in each country has evolved, the components of  PEPFAR country team budgets that contribute to the HIV treatment and  care services specified in the spending requirement have also evolved.  However, some of those funds are not accounted for in the current  budgetary formula. In particular, although budgets allocated to capacity  building have increased, those funds are not accounted for in either  component of OGAC’s budgetary formula: the budget for “treatment and  care for people living with HIV” or the total budgets for the Treatment,  Care, and Prevention program areas. Some capacity-building efforts,  such as enhancements to drug supply chain systems that are budgeted  under health systems strengthening, also contribute to HIV treatment and  care services. Other health systems strengthening activities may have a  less direct effect on those services. Moreover, OGAC officials said that  some funds budgeted for prevention activities—particularly funds for  prevention of mother-to-child transmission of HIV that cover ARV  treatment and care services for HIV-positive pregnant and breastfeeding  women—also contribute to HIV treatment and care services. Those  contributions are likewise not accounted for in the calculated budget for  “treatment and care for people living with HIV.”
OGAC officials told us that they currently do not have an agreed  methodology that would allow them to determine the extent to which  funds for capacity building, or certain prevention activities, contribute  directly to HIV treatment and care. As a result, it is currently not possible  to determine accurately the proportion of total country budgets that  support the services specified in the treatment spending requirement, if  the contributions of PEPFAR country teams’ capacity-building and  prevention budgets are taken into account. OGAC officials acknowledged  that as PEPFAR continues to evolve, addressing the challenge of  accounting for the contributions that funds from budgets for capacity  building and prevention make to HIV treatment and care programs may  require revisions to the current budgetary formula. However, the  treatment spending requirement expires at the end of September 2013.

	Conclusions

PEPFAR has supported rapid expansion of HIV programs since 2008,  providing direct support for more than half of the estimated 8 million  people on ARV treatment in low- and middle-income countries. Data from  the last 4 years indicate that the growth in treatment programs is  accelerating. Substantial declines in the costs of providing treatment to  each individual have contributed to recent accomplishments. Despite this  progress, there is substantial unmet need. More than 15 million people  are estimated to be eligible for ARV treatment based on current WHO  guidelines. Moreover, 23 million would be eligible if programs expanded  eligibility to include groups such as all pregnant and breastfeeding women  and certain high-risk populations, consistent with recommendations in  recent updates to WHO guidelines.
In order for the country programs that PEPFAR supports to be able to  expand to meet these needs, it will be important that they maximize how  efficiently they use available resources. Given the scale of the unmet  need, countries’ plans to expand HIV treatment may continue to drive up  the total costs of providing treatment even if per-patient treatment costs  further decline. Each country’s ability to expand treatment, then, hinges  on thorough planning based on data-driven analyses of the cost of  delivering the full scope of comprehensive HIV treatment services. This is  a complex task as cost inputs often cut across PEPFAR budget codes,  and costs are incurred by PEPFAR and other donors, partner-country  governments, and multilateral partners. Although PEPFAR has used its  cost estimation and expenditure analysis approaches to assist countries’  planning efforts and describe opportunities for savings, treatment costs  have not yet been fully studied. In particular, existing data are not always  timely, come from a limited number of sites in select countries, and do not  always capture non-PEPFAR costs. Thus, PEPFAR may be missing  opportunities to identify further savings. Given the rapid pace of change in  PEPFAR-supported programs, effectively identifying potential savings  requires more timely and comprehensive information on treatment costs  than PEPFAR’s approaches currently provide.
The 2008 Leadership Act has required PEPFAR to spend half of the  funds appropriated to PEPFAR on specific HIV treatment and care  services and has also set a major policy goal of promoting country  ownership. Using OGAC’s budgetary formula, PEPFAR has met the  current spending requirement. Over the same time frame, PEPFAR funds  have been devoted increasingly to building country capacity. However,  because OGAC cannot fully account for the contributions that its country  capacity building activities have made to the HIV treatment and care  services identified in the treatment spending requirement, it cannot  provide complete information on how PEPFAR funds are being allocated  to meet both the treatment spending requirement and the goal of  promoting country ownership. The current treatment spending  requirement, however, is in effect only until September 30, 2013, when it  expires.

	Recommendations for Executive Action

To improve PEPFAR’s ability to help countries expand their HIV treatment  programs to address unmet need, and do so through the efficient  allocation of resources and effective program planning, the Secretary of  State should direct PEPFAR to develop a plan to do the following:  systematically expand the use of country treatment-cost studies to  additional sites and partner countries, where it is cost-effective to do  so, to help estimate costs and examine country-specific  characteristics of comprehensive HIV treatment that may result in cost  savings; and work with partner countries, where feasible, to broaden PEPFAR’s  expenditure analysis to capture treatment costs across all partners  that support each country program and develop more timely  information on the full costs of comprehensive HIV treatment.

	Agency Comments and Our Evaluation

We provided a draft of this report to State, USAID, and HHS’s CDC for  comment. Responding jointly with CDC and USAID, State provided  written comments, reproduced in appendix III. In its comments, State  agreed with our findings and conclusions and concurred that high-quality  information on costs and expenditures is vital for program management.  State’s comments also emphasized that, because in-depth cost studies  are time- and resource-intensive to conduct, those studies should be  complemented with more timely data from expenditure analysis to help  ensure that PEPFAR-supported programs have a portfolio of information  that can be used to inform program decision making. In response to our  first recommendation, State commented that PEPFAR is developing  guidance on an optimal schedule for evaluating costs—at the country  level and across the program—to balance in-depth analysis with more  timely data from expenditure analyses. This approach is consistent with  our recommendation that PEPFAR develop a plan to expand country  treatment-cost studies where it is cost effective to do so. In response to  our second recommendation, State agreed that expenditure analysis  would be more valuable if it included non-PEPFAR spending, but noted  that PEPFAR cannot compel its partners to routinely report on their  spending. However, State said that PEPFAR designed its expenditure  analysis approach so that it can be adapted to capture spending from  other partners. Moreover, State commented that in the last year PEPFAR  has collaborated with multilateral partners in up to three countries to plan  expenditure analyses that will capture non-PEPFAR spending. While we  recognize that PEPFAR cannot require its partners to report on their  spending, because HIV treatment costs are increasingly supported  through a mix of funding from PEPFAR, other donors, partner-country  governments, and multilateral partners such as the Global Fund, it is  critical that PEPFAR continue exploring opportunities to work with  partners, where feasible, to broaden the use of expenditure analysis. In  addition, State and CDC each provided technical comments that were  incorporated, as appropriate.
As agreed with your offices, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the Secretary of State and  the U.S. Global AIDS Coordinator. The report also will be available at no  charge on the GAO website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-3149 or gootnickd@gao.gov, or contact Marcia Crosse at  (202) 512-7114 or crossem@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page   of this report. GAO staff who made major contributions to this report are  listed in appendix IV.

Appendix I: Objectives, Scope, and Methodology

In this report, we examine  1.  changes in per-patient treatment costs and their effect on program  2.  how PEPFAR’s cost information supports countries’ efforts to expand  3.  how PEPFAR has met the treatment spending requirement.
To describe how per-patient costs have changed and their effect on  program implementation in treatment programs supported by the  President’s Emergency Plan for AIDS Relief (PEPFAR), we focused our  work on PEPFAR’s reported trends in cost information relating to fiscal  years 2005 through 2011. We also reviewed agency documents on  PEPFAR’s detailed cost estimation approach, results from eight country  treatment-cost studies, and summary information that PEPFAR has  published on available cost estimates and characteristics of HIV  treatment programs. These included two PEPFAR reports summarizing  estimated per-patient treatment for fiscal years 2010 and 2011, including  how the estimates varied across partner countries. Separately, we  analyzed data on PEPFAR’s antiretroviral (ARV) drug purchases in fiscal  years 2005 through 2011 to identify trends in drug prices across  PEPFAR-supported countries. We also reviewed PEPFAR’s estimates for  savings attributable to purchasing generic ARV products. To assess the  reliability of the ARV drug data used in our analysis, we interviewed  PEPFAR officials and officials from a supply chain contractor that  manages the bulk of PEPFAR’s ARV drug purchases and collects data  annually on almost all ARV purchases by PEPFAR implementing  partners. We also reviewed documentation on their data collection  processes. Finally, we performed checks, such as examining the data for  missing values and discussing the results of our analyses with officials  responsible for the data. On the basis of these steps, we determined that  the ARV drug data were sufficiently reliable for our purposes. In addition,  we conducted field work in three PEPFAR partner-countries—Kenya,  South Africa, and Uganda—in June 2012 to obtain information costing  activities and challenges faced in implementing treatment programs. We  selected these countries on the basis of program size, estimates of HIV  disease burden, travel logistics, and other factors. We interviewed key  implementing partners, technical experts in costing methodology, and in- country officials and reviewed documentation from the selected countries.  Finally, we examined trends in the number of patients treated in  PEPFAR-supported country treatment programs, including PEPFAR data  reported by its country teams as well as global figures from the Joint  United Nations Programme on HIV/AIDS (UNAIDS). On the basis of our  reviews of documentation for these data as well as interviews with  PEPFAR officials, we determined that the data were sufficiently reliable  for our purposes.
To describe how PEPFAR’s cost information supports countries’ efforts to  expand treatment, we assessed the timeliness and completeness of  information generated through PEPFAR’s cost estimation and  expenditure analysis approaches. Specifically, we assessed PEPFAR’s  cost estimation approach and eight country treatment-cost studies for  their ability to provide key information for program planning and resource  allocation. We assessed PEPFAR’s expenditure analysis approach by  examining PEPFAR documentation on expenditure analysis and results  to date. We also interviewed PEPFAR officials about the strengths and  weaknesses of the cost estimation and expenditure analysis approaches,  and any plans to revise these approaches. In addition, we reviewed  PEPFAR country operational plans and country treatment-cost studies for  information on expected cost trends and country goals for expanding  treatment programs. Last, we reviewed World Health Organization (WHO)  HIV treatment guidelines and their impact on the estimated number of  people requiring treatment as country programs expand.
See: Department of State, Office of the U.S. Global AIDS Coordinator, PEPFAR  Blueprint: Creating an AIDS-free Generation (Washington, D.C.: November 2012); The  U.S. President’s Emergency Plan for AIDS Relief: 5-year Strategy (Washington, D.C.:  December 2009); PEPFAR Fiscal Year 2012 Country Operational Plan (COP) Guidance  (Washington, D.C.: August 2011); PEPFAR Fiscal Year 2013 Country Operational Plan  (COP) Guidance, Version 2.0 (Washington, D.C.: October 2012). budget data for fiscal years 2008 through 2012. We interviewed PEPFAR  budget officials about the budget data to ensure the completeness of the  data and discuss any changes in budget methodology over time. We also  interviewed OGAC officials regarding the budgetary formula that OGAC  uses to implement the treatment spending requirement.

Appendix II: PEPFAR Program Areas, Budget Codes, and Budgetary Formula for Treatment Spending Requirement

PEPFAR support for country programs is categorized into four broad  program areas—Treatment, Care, Prevention, and Other—each  comprising multiple budget codes. The types of services captured within  each program area and the associated budget codes are shown in table 3  below.
Section 403 of the 2008 Leadership Act required that, in each fiscal year,  more than half of the funds appropriated pursuant to section 401 of the  act shall be expended for the following: (1) ARV treatment; (2) clinical  monitoring of HIV-positive people not in need of ARV treatment; (3) care  for associated opportunistic infections; (4) nutrition and food support for  people living with HIV; and (5) other essential HIV-related medical care  for people living with HIV.
Budgets for “treatment and care for people living with HIV”  (Budgets for Treatment + Care + Prevention program areas)
To determine the amount of the PEPFAR budget that constitutes  “treatment and care for people living with HIV,” OGAC sums the amounts  allocated by all country teams each year within six of the seven budget  codes within the Treatment and Care program areas: adult treatment, adult care and support,
ARV drugs, pediatric treatment, pediatric care and support, and
TB/HIV.

Appendix III: Comments from the Department of State

Appendix IV: GAO Contacts and Staff Acknowledgments

	GAO Contacts

	Staff Acknowledgments

In addition to the contact named above, Jim Michels, Assistant Director;  Chad Davenport; E. Jane Whipple; David Dayton; Fang He; Todd M.  Anderson; Kay Halpern; Brian Hackney; Erika Navarro; Katy Forsyth;  Grace Lui; and Etana Finkler made key contributions to this report.

Related GAO Products

President’s Emergency Plan for AIDS Relief: Agencies Can Enhance  Evaluation Quality, Planning, and Dissemination. GAO-12-673.  Washington, D.C.: May 31, 2012.
President’s Emergency Plan for AIDS Relief: Program Planning and  Reporting. GAO-11-785. Washington, D.C.: July 29, 2011.
Global Health: Trends in U.S. Spending for Global HIV/AIDS and Other  Health Assistance in Fiscal Years 2001-2008. GAO-11-64. Washington,  D.C.: October 8, 2010.
President’s Emergency Plan for AIDS Relief: Efforts to Align Programs  with Partner Countries’ HIV/AIDS Strategies and Promote Partner  Country Ownership. GAO-10-836. Washington, D.C.: September 20,  2010.
President’s Emergency Plan for AIDS Relief: Partner Selection and  Oversight Follow Accepted Practices but Would Benefit from Enhanced  Planning and Accountability. GAO-09-666. Washington, D.C.: July 15,  2009.
Global HIV/AIDS: A More Country-Based Approach Could Improve  Allocation of PEPFAR Funding. GAO-08-480. Washington, D.C.: April 2,  2008.
Global Health: Global Fund to Fight AIDS, TB and Malaria Has Improved  Its Documentation of Funding Decisions but Needs Standardized  Oversight Expectations and Assessments. GAO-07-627. Washington,  D.C.: May 7, 2007.
Global Health: Spending Requirement Presents Challenges for Allocating  Prevention Funding under the President’s Emergency Plan for AIDS  Relief. GAO-06-395. Washington, D.C.: April 4, 2006.
Global Health: The Global Fund to Fight AIDS, TB and Malaria Is  Responding to Challenges but Needs Better Information and  Documentation for Performance-Based Funding. GAO-05-639.  Washington, D.C.: June 10, 2005.
Global HIV/AIDS Epidemic: Selection of Antiretroviral Medications  Provided under U.S. Emergency Plan Is Limited. GAO-05-133.  Washington, D.C.: January 11, 2005.
Global Health: U.S. AIDS Coordinator Addressing Some Key Challenges  to Expanding Treatment, but Others Remain. GAO-04-784. Washington,  D.C.: June 12, 2004.
Global Health: Global Fund to Fight AIDS, TB and Malaria Has Advanced  in Key Areas, but Difficult Challenges Remain. GAO-03-601. Washington,  D.C.: May 7, 2003.

Output:
Why GAO Did This Study

Through PEPFAR--first authorized in 2003--the United States has supported major advances in HIV/AIDS treatment, care, and prevention in more than 30 countries, including directly supporting treatment for almost 5.1 million people. However, millions more people still need treatment. Congress reauthorized PEPFAR in 2008--authorizing up to $48 billion over 5 years--making it a major policy goal to help partner countries develop independent, sustainable HIV programs. Congress also set spending and treatment targets. OGAC leads PEPFAR by allocating funding and providing guidance to implementing agencies. As requested GAO reviewed PEPFAR-supported treatment programs. GAO examined (1) how perpatient treatment costs have changed and affected program implementation, (2) how PEPFAR cost information supports efforts to expand treatment, and (3) how PEPFAR has met a legislated treatment spending requirement. GAO reviewed cost analyses and reports and analyzed ARV drug data relating to fiscal years 2005 through 2011; conducted fieldwork in three countries selected on the basis of program size and other factors; and interviewed PEPFAR officials and implementing partners.

What GAO Found

The Department of State's (State) Office of the U.S. Global AIDS Coordinator (OGAC) has reported that per-patient treatment costs declined from about $1,053 to $339 from 2005 to 2011. Purchasing generic antiretroviral (ARV) drugs, together with declining drug prices, has led to substantial savings. OGAC estimates that the President's Emergency Plan for AIDS Relief (PEPFAR) has saved $934 million since fiscal year 2005 by buying generic instead of branded products. PEPFAR's analyses of data from eight country treatment-cost studies indicate that per-patient costs also declined as programs realized economies of scale while taking on new patients. Furthermore, the analyses suggest that costs decreased as countries' treatment programs matured, particularly in the first year after programs expanded, and reduced one-time investments. Per-patient cost savings have facilitated substantial increases in the number of people on ARV treatment. In September 2012, an estimated 8 million were on treatment in lowand middle-income countries, of which PEPFAR directly supported 5.1 million-- an increase of 125 percent since 2008, the year the program was reauthorized.
Despite substantial declines in per-patient treatment costs, it is important that countries continue to improve the efficiency of their programs to expand to meet the needs of the estimated 23 million people eligible for ARV treatment under recent international guidelines. PEPFAR's cost estimation and expenditure analysis approaches provide complementary information that can help partner countries expand treatment and identify potential cost savings. However, as currently applied, these approaches do not capture the full costs of treatment. Cost estimation provides in-depth information, but data are limited because detailed cost studies have been done in only eight partner countries, at a small number of sites. Moreover, although treatment programs are changing rapidly, key data for most of the studies are no longer timely, since they were collected in 2006 and 2007. PEPFAR does not have a plan for systematically conducting or repeating cost studies in partner countries. Data from expenditure analyses, while more timely, are limited because they do not include non-PEPFAR costs. Without more timely and comprehensive information on treatment costs, PEFPAR may be missing opportunities to identify potential savings, which are critical for expanding HIV treatment programs to those in need.
Using an OGAC-developed budgetary formula, PEPFAR has met the legislative requirement that more than half of its funds be spent each year to provide specific treatment and care services for people living with HIV. From fiscal year 2008 to fiscal year 2012, PEPFAR funds allocated to capacity building--to strengthen health systems, laboratory capacity, and strategic information systems--increased from 15 percent to 21 percent of PEPFAR's total funds to support country programs. However, the current formula does not include the capacity building funds. These funds--which support PEPFAR country teams' efforts to meet another legislative goal of promoting sustainable country-owned programs--and other PEPFAR activities also contribute to HIV treatment and care services. PEPFAR does not currently have a methodology to account for those contributions. Without such a methodology, it is not possible to determine the full amount of PEPFAR funds that are allocated to support the HIV treatment and care services identified in the spending requirement. However, the treatment spending requirement expires at the end of September 2013.

What GAO Recommends

GAO recommends that State develop a plan for (1) expanding the use of indepth cost studies to additional countries and sites, where appropriate, and (2) broadening expenditure analysis to include non-PEPFAR costs, as feasible. State generally agreed with the report's recommendations.