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Recent guidelines recommend that all HIV-infected women should receive highly active antiretroviral therapy throughout pregnancy and lactation, irrespective of whether or not they need it for their own health. This strategy for prevention of mother to child transmission (PMTCT) of HIV is more effective than the well-established use of single-dose nevirapine, but it is also a more costly alternative. In this economic evaluation, we use a decision model to combine the best available clinical evidence with cost, epidemiological and behavioral data from Northern Tanzania. We find that a highly active antiretroviral therapy-based PMTCT Plus regimen is more cost effective than the current Tanzanian standard of care with single-dose nevirapine. Although PMTCT Plus is roughly 40% more expensive per pregnant woman than single-dose nevirapine, the expected health benefits are 5.2 times greater. The incremental cost effectiveness ratio of the PMTCT Plus intervention is calculated to be 4062 USD per child infection averted and 162 USD per disability adjusted life year.