Abstract
There is paucity of evidence on cost of antiretroviral therapy (ART) delivered through the public sector in India. Moreover, the Government of India is considering changing the criteria for introduction of ART to HIV patients, which is likely to have significant economic implications. In this paper, we assess the health system cost of ART services at two levels of health care delivery. Bottom-up costing was used to collect data on capital and recurrent resources consumed over a period of one year (April 2014–March 2015). Capital costs were annualized and shared costs apportioned to calculate annual and unit costs of providing ART care. Sensitivity analysis was undertaken to measure the extent of uncertainty in input prices. The annual per capita cost of ART therapy was INR 48,975 (USD738) in the Centre of Excellence (COE) and INR 24,954 (USD376) in the ART centre. Drugs contributed around 70% and 65% of total annual cost, followed by human resource (19% each) and capital cost (7%; 12%) in COE and ART centres, respectively. These provide a comprehensive assessment of the cost of ART care in India. The study estimates could be used for planning of services, as well as undertaking further cost-effectiveness studies.
Introduction
India accounts for the third largest number of people living with HIV (PLHIV) after South Africa and Nigeria, accounting for 6% of the globally-affected 35.3 million people. 1 Eighty five per cent of these are found among the most productive age group of 15–45 years, with an overall prevalence of 0.27%. 2 Antiretroviral therapy (ART) is the mainstay of treatment which suppresses viral load (VL), slows disease progression and improves quality of life of HIV patients.3,4 In year 2006, the Government of India under the National AIDS Control Program (NACP) introduced ART centres to provide free or subsidized treatment in addition to prevention strategies. These centres have provided free antiretroviral (ARV) drugs, laboratory testing, management of opportunistic infections and counselling services to more than 800,000 PLHIV. 5 Wider access to treatment has led to a 29% reduction in estimated annual deaths between 2007 and 2011. 6
Over the last decade, the Care Support and Treatment (CST) strategy of NACP has received a substantial increase in the budgetary allocation from 17 to 29.5% of total budget as the programme moved from phase III (2007–12) to phase IV (2012–17).4,6 Unlike other curative services in India where the majority of costs are borne out-of-pocket, ART care is largely tax-funded through the NACP budget. 7 However, there is no comprehensive analysis to determine the cost of ART care from the health system’s perspective apart from a single analysis. 8 This study reported that the average cost of the ART programme per HIV patient was INR 1264 (USD29.4) per month or INR 15,168 (USD353) per year. Accounting for the patient’s out-of-pocket expenditures, this study reported that the societal cost of the ART programme was about USD50 per month per client. However, this report is also dated now, and several programmatic changes have taken place in the organization of ART services since then. Most notably, the World Health Organisation has recommended a change in guidelines for initiating ART therapy, that is from minimum CD4 cell count to ‘Test and Treat’ which states that any person identified with HIV is eligible for ART. 9 This is likely to increase the number of eligible patients for ART which will further increase cost. 10 As a result it is important to determine the cost of ART care from health system’s perspective. The evidence on cost of ART services would be useful for several reasons – first, it helps understand the economic implications and fiscal sustainability of any programmatic change in guidelines for initiating ART. Second, an initial assessment of cost of ART care will also help determine the cost-effectiveness of alternative guidelines as well as models of care delivery. Third, an assessment of cost across various facilities helps assess the technical efficiency of delivering services and helps in organizing the services more effectively. Several studies on costing of health care services in India have been published more recently; however, since the NACP continues to be a vertically-run programme, these studies do not provide much information on cost of HIV services, particularly ART care.11–13 In order to fill this evidence gap, and to help drive further research on economics of ART care, the present study aims to estimate the cost of providing free ART treatment at two levels of service delivery – a Centre of Excellence (COE) and an ART centre.
Methodology
Study setting
In India, a three-tier model of service delivery for ART has been developed by ART centres as central anchor, Link ART Centres for decentralized ART Service delivery, and COE for specialized tertiary care. The ART centres which are central to the NACP’s CST strategy are located in the medical colleges and the district hospitals. 14 ART centres provide all the basic services to PLHIV including diagnostic facilities, treatment with ARVs, managing opportunistic infections, and providing support to ensure adherence. In the event that a patient is suspected of treatment failure, the ART centres refer the PLHIV to the COE. Ten such COEs have been established in select teaching institutions in different parts of the country to facilitate the provision of tertiary level specialized care and treatment to complicated cases, training and mentoring, and operations research.
The present study was conducted in two health facilities: one COE in a tertiary care facility which caters to population of several northern states of India and an ART centre located in a district hospital in Punjab state. The choice of selection of the study facilities was based on its functionality. While the selection of COE was purposive, one ART centre was chosen randomly from among all the ART centres within the catchment area of the COE, which were fully functional and had more than 80% capacity utilization. The latter criteria were chosen so that the utilization patterns do not affect the unit cost estimates. The profile of the study centres is given in Table 1.
Profile of the study centres for costing of ART services.
ART: antiretroviral therapy; COE: Centre of Excellence; HIV: human immunodeficiency virus.
Costing
Economic costs of ART care were assessed from the health system perspective using a standard ‘bottom up approach’.12,13 By ‘health system perspective’ we imply the resources which were provided by either the NACP, the State AIDS Control Society, or the routine health system in providing ART care to PLHIV. Cost centres were identified based on services delivered including diagnostic service centres, ART therapy centres, and counselling centres. Within these cost centres, both capital and recurrent resources were identified, and their quantity was measured and valued based on prices. Capital costs included cost on resources which would last at least for a period of more than one year such as medical equipment, building space, other non-consumable furniture items, and so on. The recurrent costs included salaries of human resources, consumables, reagents used in diagnostics, drugs (ARV drugs and medicines to treat opportunistic infections), and overheads such as water, electricity bills, and so on. Human resources employed in these centres included doctors, nurses, laboratory technicians, counsellors, and helpers. Non-consumables included items like furniture, computers, and diagnostic machines. Resources for diagnostic services such as reagents and kits for the tests were also included as consumables.
Data collection
Data were collected for a period of one year (April 2014–March 2015) at both study centres. A facility level costing questionnaire was developed to enlist all the resources that were utilized for providing care. Data on annual resources consumed were collected through review of various records, stock registers, and reports. Key stakeholders in each cost centre were interviewed, along with observation of facility use patterns to understand the time allocation of different resources in these cost centres. Salaries of specialized staff were obtained from the accounts departments of the institutes. Unit prices of drugs were obtained from the office of the Punjab State AIDS Control Society (SACS) as these drugs are procured centrally by NACO and are then distributed among different treatment centres. For prices of other drugs and consumables, equipment and non-medical consumables, procurement prices at the COE were obtained. In case the prices were not available from the respective facility or SACS, market rates were applied for those items. 15
In the COE, specialist doctors and other staff from departments of neurology, dermatology, gastroenterology, and internal medicine were part of the ART team. One doctor from each of these departments was interviewed for their role and time allocation in various activities as part of the team in the last one week. This included average time spent per patient in outpatient consultations and average number of patients seen in a week. Time spent on any activity with less than weekly frequency, for instance any training or meeting, was also recorded and valued. For people involved in full-time ART care, their entire cost was attributed towards ART care while for others it was calculated by estimating the proportion of their time value allocated exclusively to treatment of HIV patients. Any volunteer time or staff for which the health facility did not directly pay was also identified and assessed.
Data analysis
The data were analysed using MS Excel and SPSS 21. The capital resources were annualized over the years of average life of utilization of the product using a discount rate of 5%. Life of capital items was assumed based on assumptions from the other costing studies from India as well as expert opinions.12,16–19 Annual costs on space were calculated by multiplying the area of floor sizes of rooms devoted to ART care at both the centres with local commercial rental prices of similar space. Recurrent costs such as drugs, consumables and human resources which were exclusive to ART care were calculated by multiplying the annual quantity utilized with unit price/monthly salaries to estimate the total annual cost.
The cost of shared human resources was apportioned as per their proportional time value used in various cost centres. Consumables such as drugs and reagents were apportioned as per proportional quantities used in different diagnostic tests or treatments and costs were allocated accordingly. Non-consumables in laboratories were apportioned based on weighted average time and total number of each type of tests. Unit costs were estimated by adding total costs and dividing it by number of patients. The details of the statistical methods employed in the study are given in Table 2. Univariate sensitivity analysis was carried out to identify the effect of uncertainties in inputs on the annual cost by varying it 20% on both the lower and higher side of the base value.
Costing assumptions and apportioning statistics.
ART: antiretroviral therapy; COE: Centre of Excellence; ICTC: Integrated Counselling and Testing Centre; OPD: outpatient department; SACS: State AIDS Control society.
Results
Annual costs
The annual costs incurred to provide ART care and support services at the COE and ART centre were INR 43.3 million (USD653,687) and INR 19.6 million (USD295,638), respectively. Recurrent costs constituted major constituent of the overall cost (85–90%). Drugs were major contributors which constituted 70 and 65% of overall costs at COE and ART centres, respectively. Cost of human resources (19%) followed by building space (<10%) were the other prominent contributors to the annual cost of treatment. Table 3 and Figure 1 provide the detailed costs under different cost heads in two study centres.

Distribution of annual costs for providing curative care to PLHIV at two study centres in India. ART: antiretroviral therapy; COE: Centre of Excellence.
Annual cost of care provision for HIV patients according to services.
ART: antiretroviral therapy; HIV: human immunodeficiency virus.
Among diagnostic services, most cost was incurred in HIV tests (50%) followed by CD4 cell count tests (37%) and VL tests (13%) in the COE. In the ART centre, 61% of the total diagnostic costs were spent on HIV testing followed by 39% on CD4 cell count tests. Around INR 2 million (USD31,377) was spent on research and training annually in the COE, while no such provision was available in ART centre (refer Table 4).
Unit cost of care provision for HIV patients in two study centres in India.
ART: antiretroviral therapy; COE: Centre of Excellence; HIV: human immunodeficiency virus.
Unit cost of services
The cost of providing ART treatment and diagnostic services per patient per year is described in Table 5. The cost of ART therapy per person per year was INR 48,975 (USD738) in the COE and INR 24,954 (USD376) in the ART centre. Per patient cost of drugs and equipment was two and four times, respectively, in the COE than that of the ART centre. One HIV rapid test cost INR 182 (USD2.7) in the COE and INR 79.6 (USD1.2) in the ART centre, respectively. The cost of counselling per patient was INR 1682 (USD25.3) in the COE and 2540 (USD38) in the ART centre.
Distribution of unit costs of providing care to PLHIV in two study centres in India.
ART: antiretroviral therapy; COE: Centre of Excellence; PLHIV: people living with HIV.
Sensitivity analysis
The tornado diagrams in supplementary Figures S1 and S2 showed that the total annual cost of providing ART treatment was most sensitive to cost of drugs followed by salaries of human resources while equipment, consumables, and overhead expenses had the least effect.
Discussion
Our study found that the costs per PLHIV per year for providing ART care were INR 45,105 (USD680) in the COE and INR 24,954 (USD376) in the ART centre. The differences in annual cost of treatment between the two centres could be attributed to many reasons. First, the quantity of drugs consumed in the COE was double that in the ART centre. In the COE, 3.1 million and 0.2 million units of ARVs and OI drugs were consumed in comparison to 1.4 million and 77 thousand units in the ART centre, respectively. Second, the COE had more than twice the number of staff (n = 30) in contrast to the ART centre (n = 13). Also, consultation visits from specialized staff of other departments to the COE, further added to its cost of treatment. Third, the laboratory in the COE was a state reference laboratory with a separately assigned building and staff. In addition, it had facilities for VL analysis unlike the ART centre. Thus, the cost of running an ART diagnostic facility was higher in the COE than the ART centre.
Evidence from the literature
Drugs contributed two-thirds of total costs followed by human resources (19–20%) in both study centres. This is contrary to costing studies undertaken globally and in Indian health care settings for general health care services which highlight that cost of human resources is the major contributor to total cost of services provision.20–22 Thus, the distribution of cost of ART care is different to other general health care services which is attributable to the high cost of ARV drugs. Another study in Indian settings reported the annual cost of treatment per patient to be USD300 for first-line ART therapy. 23 The estimates are lower than our study where both first- and second-line ART were considered during estimation. Another study from India reported the unit cost of ART to be in the range from INR 970 to INR 1850 per person per month. 24 The inflation-adjusted cost per month per client from this study would be INR 2252 which is close to our study estimates of INR 3759 (USD57) and INR 2079 (USD31) per patient per month in the COE and the ART centre, respectively. The cost estimation in the former study did not account for any capital costs or costs of HIV tests. As per the World Bank, globally USD600 per patient per year is spent on treatment of HIV. 25 Once adjusted for inflation, the World Bank estimates are estimated to be USD1139.6 per patient per year. Our cost estimates are significantly lower than the World Bank figures. This could be attributed to the introduction of generic ARV drugs as well as price regulation of ARV drugs in India during the last decade. 26 This highlights the success of government programmes not only in keeping the cost of ART care under check but also reducing the same by 48%. This is supported by another study which highlighted the decline in cost of care for HIV patients from USD680 per month in 1998 to USD26 per month in 2005 owing to the introduction of generic drugs. 27 This price reduction in cost of drugs resulted in increased accessibility of PLHIV to ART therapy leading to earlier initiation of treatment. 28
As far as cost per diagnostic tests is concerned, our study estimates for cost of HIV rapid test (INR 182 [USD2.7] in the COE and INR 79.6 [USD1.2] in the ART centre) were lower than what was reported in 2013 (USD6). In the latter study, authors evaluated the impact, cost, and cost-effectiveness of different ART eligibility criteria by utilizing mathematical modelling techniques in four countries including India. 29 The increased diagnostic cost in previous study can be attributed to the fact that it included service delivery costs necessary to identify and link HIV individuals to care. In private settings, the cost of HIV test ranges from INR 400 to 600 per test. 30 In the US according to one study, the mean cost for rapid HIV testing and counselling was USD48 for an HIV-negative test and USD64 for preliminary HIV-positive test. 31
Similarly, the cost of CD4 testing was INR 226 (USD3.4) in the COE and INR 167 (USD2.5) in the ART centre. Another study on financial burden of health services on HIV patients reported that the cost of CD4 cell count monitoring in India was USD25 in 2007. 27 In this study, the authors had included costs of CD4 kits and reagents only. In a private setting, the average cost of a CD4 test is INR 1200. 30 The availability of newer and alternate techniques of testing has resulted in reduction in the costs of CD4 cell count testing. 32
Policy and research implications of study findings
Some published papers point out the inefficiency of the public system for delivering health care in India.33,34 In the debates on provisioning of universal health coverage, such evidence leads to advocacy for demand-side financing rather than creation of public sector infrastructure and service provision through supply-side financing. In most such demand-side financing schemes, the care is purchased mostly from the private sector. 35 The findings of this study, albeit in the context of HIV care, refute this myth of inefficiency of the public sector. As found in this study the costs of an HIV test, CD4 test, and VL test in a government setting are 28, 20, and 50% of what they cost in the private sector. This finding provides evidence for further strengthening of the public system through adequate financing to make provision of health care services more efficient. Even if the services are to be purchased from the private sector, the findings of our study suggest the need for significant price negotiation. A recent study on cost of treatment for cancer in India also highlighted that there is wide variation in provider payment rates in several health insurance schemes where care is purchased from the private sector, and it also significantly deviates from the actual cost. 36 This study also recommended revising these rates for purchasing services from the private sector based on such cost analyses. Moreover, there is also significant evidence that the provision of health care through the public sector is more equitable.37,38 Hence, the public sector needs to be strengthened for provision of efficient and equitable ART services in India.
We found that nearly 70% of the total cost per patient was attributable to drugs. Much of this overall drug cost in turn is explained by ARV drugs. This is unlike the distribution of cost of other health services which have been reported at primary, secondary, or tertiary care level in India – all of which have found human resource cost as the most important component of the unit cost.11,36,39,40 Any attempt to further reduce the cost of delivering ART care to PLHIV should hence focus on assessment of prices at which drugs are procured. Recent innovation in reforming the procurement systems by creating centralized institutions for procurement has helped negotiate and reduce prices through a process of competitive bidding. 41 There is need to assess and further improve the procurement mechanisms for ARV drugs in order to explore possibilities of further price reduction through either inducing competition or through regulation. Regulation as a mechanism of price regulation has also recently been tried in India in the context of cardiac stents and orthopaedic implants. 42
The guidelines on when to initiate ART for PLHIV have evolved over the years. In 2004 HIV patients were initiated on ART once the CD4 cell count fell below 200 cells/mm3. The threshold increased to less than 350 cells/mm3 in 2010 and then to less than 500 cells/mm3 in 2013. The current recommendation is to ‘Treat All’, regardless of the clinical stage or CD4 cell count. As India adopts the proposed Test and Treat guidelines universally, the cost of treatment is going to increase; the question now arises that whether India should adopt these guidelines and will the change in guidelines be sustainable in future? There will be implications on cost and as a result it is important to measure the benefits which early initiation of therapy will have to ascertain the value for money of changing the guidelines. It has been established that early initiation of therapy has potential benefits of decreased HIV transmission and reduced HIV-related complications like development of malignancies and cardiovascular disease. 43
The early initiation of ART therapy will decrease episodes of hospitalization associated with patients having low CD4 cell counts. According to a previous study, IPD and emergency services contribute approximately 35% to total operating cost of hospitals in the public sector. 44 At a state level, 37% of health care resources are spent on curative care, and out of this 20% is the allocation for inpatient care. 45 These costs are borne by routine health systems, which may not reflect in the programme budgets for ART care. Thus, initiating ART at an early stage would increase the overall cost of care and support of NACP, but the routine health system costs associated with hospitalization and treatment of opportunistic infections are likely to decrease.
Evidence from studies which have evaluated the cost-effectiveness of ART care for different eligibility criteria for initiation shows that early initiation of ART therapy at CD4 ≤ 500 cells/mm3 is a cost-effective strategy.29,46 A study done in South Africa in 2014 showed that when initiating ART therapy at CD4 ≤ 500 cells/mm3, the resources would buy more population health than being spent on routine virology testing. The ICER for initiating ART therapy at CD4 ≤ 500 cells/mm3 was in the range of USD1000–2000 per quality of life years gained. 47
Another recent study in 2014 assessed the cost-effectiveness of ART therapy for various eligibility criteria in four countries, India being one of them. It reported that earlier eligibility criteria were very cost effective for low- and middle-income settings. 29 The study also reported that extending eligibility for ART to all HIV-positive adults in India would incur an incremental cost ranging from USD131 to USD241 per disability adjusted life year averted. 29 The authors mentioned the lack of cost data from the study settings.
Limitations
Our study has several methodological limitations. First, we assessed the cost in two centres which makes it difficult to generalize the results at a national level. Second, we did not account for costs of hospitalization for treatment of patients. However, a large majority of ART care was provided in the outpatient setting. Third, since several resources used for service provision were available as pooled or shared resources, we had to apportion the quantity which was used specifically for ART services; this may lead to some inaccuracy in estimates. Finally, we did not empirically assess the benefits of early initiation of ART. A full economic evaluation where health consequences of alternative courses of actions (i.e. change in the criteria for initiation of ART) are also measured as part of a study will generate substantial evidence to understand the efficiency of the system involved in the delivery of care.
Conclusion
The present study gives a detailed account of costs incurred in delivering ART care at a COE and an ART centre. With the new proposed guidelines for initiating ART, the burden on the health system will increase and so will the costs of providing ART treatment to HIV patients. More evidence is needed in terms of the cost-effectiveness of this strategy, especially from an Indian perspective, before the government considers widespread adoption of the proposed treatment guidelines. Finally, more work needs to be done to assess the technical efficiency of providing ART care in India.
Footnotes
Authors’ contribution
Data availability
All relevant data are within the paper and its Supporting Information files. Any additional research data can be assessed by requesting to the corresponding author at his email address:
Declaration of conflicting interests
The authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Ethical considerations
The Institute Ethics Committee of the Post Graduate Institute of Medical Sciences (PGIMER), Chandigarh provided the ethical clearance for the study. Administrative approval was also obtained from PGIMER and government health authorities of Ludhiana for obtaining health facility level data.
Funding
The authors received no financial support for the research, authorship, and/or publication of this article.
