Advance market commitments

1. Advance Market Commitments

An **Advance Market Commitment (AMC)** is a financial mechanism designed to stimulate the development and production of vaccines for diseases that predominantly affect low-income countries. By guaranteeing a market for vaccines once they are developed, AMCs aim to incentivize pharmaceutical companies to invest in research and development for vaccines that might otherwise be considered unprofitable.

Background

The concept of AMCs emerged from the recognition that traditional market forces often fail to provide sufficient incentives for the development of vaccines for diseases that primarily affect the developing world. These diseases, such as malaria, tuberculosis, and HIV/AIDS, impose a significant burden on global health, yet the potential market for vaccines is limited by the low purchasing power of affected countries.

Mechanism

AMCs work by committing funds to purchase a specified quantity of a vaccine at a pre-agreed price once it is developed and meets certain criteria. This commitment reduces the financial risk for vaccine manufacturers, as they are assured of a market for their product. The key components of an AMC include:

• **Target Product Profile (TPP):** A detailed description of the desired characteristics of the vaccine, including efficacy, safety, and cost.
• **Commitment Agreement:** A legally binding agreement between donors and manufacturers outlining the terms of the AMC.
• **Funding:** Pledges from governments, international organizations, and private donors to finance the purchase of vaccines.

Implementation

The first and most notable AMC was launched in 2007 for the development of a pneumococcal vaccine. This initiative was spearheaded by the GAVI Alliance, with funding from countries such as Italy, the United Kingdom, Canada, Russia, and Norway, as well as the Bill & Melinda Gates Foundation. The AMC for pneumococcal vaccines has been credited with accelerating the availability of vaccines in low-income countries, saving millions of lives.

Impact

AMCs have demonstrated the potential to:

• **Accelerate Vaccine Development:** By providing a guaranteed market, AMCs encourage pharmaceutical companies to invest in research and development.
• **Increase Access:** AMCs help ensure that vaccines are available and affordable in low-income countries.
• **Promote Innovation:** By setting specific criteria for vaccines, AMCs can drive innovation in vaccine technology.

Criticism

Despite their successes, AMCs have faced criticism, including:

• **Complexity:** The design and implementation of AMCs can be complex and time-consuming.
• **Market Distortion:** Some argue that AMCs may distort market dynamics by favoring certain products or companies.
• **Sustainability:** Questions remain about the long-term sustainability of AMCs and their ability to address all global health needs.

Also see

• GAVI Alliance
• Vaccine development
• Global health initiatives
• Public-private partnership