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Perinatal HIV transmission has declined significantly in New York State (NYS) since implementation of a 3-part regimen of zidovudine prophylaxis in the antenatal, intrapartum, and newborn periods. This study describes the factors associated with perinatal transmission in NYS from 1997 to 2000, the first 4 years of NYS’s comprehensive program in which all HIV-exposed newborns were identified through universal HIV testing of newborns.This population-based observational study included all HIV-exposed newborns whose infection status was known and their mothers identified in NYS through the universal Newborn HIV Screening Program (NSP) from February 1997 to December 2000. Antepartum, intrapartum, newborn, and pediatric medical records of HIV-positive mothers/infants were reviewed for history of prenatal care, antiretroviral therapy (ART), and infant infection status. Risks associated with perinatal HIV transmission were examined.Perinatal HIV transmission declined significantly from 11.0% in 1997 to 3.7% in 2000 (P < 0.05). Prenatal ART was associated with a decline in perinatal HIV transmission both for monotherapy (5.8%, relative risk [RR] = 0.3, 95% confidence interval: 0.2%–0.5%) and combination therapy [2.4%, RR = 0.1, 95% confidence interval: 0.1%–0.2%) compared with no prenatal antiretroviral prophylaxis (P < 0.05).Public health policies to improve access to care for pregnant women and advances in clinical care, including receipt of appropriate preventive therapies, have contributed to declines in perinatal HIV transmission in NYS.