Oil price shocks could raise the cost of HIV medicines by up to 44%, Unitaid analysis finds

Report warns that geopolitical disruptions are exposing a hidden vulnerability in pharmaceutical supply chains, with implications for affordability and health security 

As geopolitical tensions continue to unsettle global energy markets, a new analysis from Unitaid warns that rising oil prices could significantly increase the cost of producing essential medicines, exposing an often-overlooked vulnerability in global health supply chains. 

The analysis, published today in The Oil Behind Every Pill, models how sustained increases in oil prices affect production costs for tenofovir, lamivudine and dolutegravir (TLD) – the first-line HIV treatment used by more than 24 million people in low- and middle-income countries. It finds that manufacturing costs could rise by around 15% if oil reaches US$120 per barrel, and by as much as 44% at US$200 per barrel.  

The findings come as renewed instability in the Middle East, concerns over the Strait of Hormuz and volatile energy markets have once again highlighted how quickly geopolitical shocks can ripple through global supply chains. While discussions often focus on shipping and transport costs, the analysis finds that the greatest exposure lies much earlier in the pharmaceutical manufacturing process. 

More than 85% of projected cost increases stem from upstream petrochemical raw materials and solvents used to manufacture medicines, rather than transport or packaging, illustrating how deeply fossil fuel dependence is embedded within pharmaceutical production.  

The modelling examined more than 270 upstream manufacturing inputs, mapping how oil price increases are transmitted through pharmaceutical production. It found that every 10% increase in oil prices translates into approximately a 3% increase in long-term manufacturing costs once fully transmitted through the value chain.  

The implications extend beyond HIV treatment. Pharmaceutical production relies heavily on fossil-fuel-derived chemicals, solvents and energy-intensive manufacturing processes. As energy markets become increasingly volatile, these hidden dependencies could place additional pressure on already constrained health budgets, particularly in low- and middle-income countries where generic medicines are procured at very low margins.  

The report argues that reducing fossil fuel dependence within pharmaceutical manufacturing should be viewed not only as a climate objective, but also as a strategy for improving the long-term resilience, affordability and security of medicine supply. 

The modelling suggests that decarbonizing TLD manufacturing could reduce oil-driven cost increases by around one third, while cutting emissions by approximately 50%. Under higher oil price scenarios, this could translate into US$70–100 million in avoided costs across global HIV programmes as treatment volumes continue to grow.  

The report concludes that affordability, health security and climate resilience are becoming increasingly interconnected. As global health budgets tighten and geopolitical instability persists, understanding – and reducing – the pharmaceutical sector’s dependence on fossil fuels will become an increasingly important part of safeguarding access to essential medicines.