Advance market commitments
Encyclopedia
An advance market commitment is a binding contract, typically offered by a government
or other financial entity, used to guarantee a viable market if a vaccine
or other medicine is successfully developed. As a result of such a commitment, the market for vaccines or drugs for neglected diseases would be comparable in size and certainty to the market for medicines for rich countries. This would enable biotech and pharmaceutical companies to invest in the development of new vaccines to tackle the world’s most pressing health problems, such as pneumonia, diarrheal disease, HIV/AIDS, and malaria, in the normal course of their business decisions.
committed US$1.5 billion to launch the first Advance Market Commitment (AMC) to help speed the development and availability of a new vaccine which is expected to save the lives of 7 million children by 2030. The AMC pilot represented the first step in a historic effort to create a market for life-saving vaccines for children in the world’s poorest countries. The new initiative will target pneumococcal disease, a major cause of pneumonia and meningitis that kills 1.6 million people every year.
World Bank President Paul Wolfowitz joined Her Majesty Queen Rania Al-Abdullah of Jordan and high-level representatives of Canada, Italy, Norway, Russia, and the United Kingdom in announcing the pilot AMC, which will test a new model for spurring development of vaccines, specifically those that prevent disease strains prevalent in developing countries. The pilot will provide 7 to 10 years of funding to support the development of future vaccines against pneumococcal disease and will include provisions to assure the long term sustainable supply and price for the poorest countries.
“With the launch of the first AMC, we can save lives, and we will do it with the investment and expertise of industry,” said Wolfowitz. “The key aim is to accelerate the production of viable and urgently needed vaccines for the poorest countries where thousands of children die every day from diseases that can be prevented.”
The AMC concept was developed in response to a tragic dilemma, noted Italian Finance Minister Tommaso Padoa-Schioppa
, whose government has committed US$635 million to the AMC pilot.
“The AMCs are an absolutely innovative approach which combines market-based financing tools with public intervention. This innovative instrument opens a new frontier in the financing of the fight against poverty and endemic diseases,” said Padoa-Schioppa, whose ministry has led the drive to adopt the AMC pilot. “International projects such as this one will make possible to save millions of human lives and demonstrate that development can and must go together with the need to ensure equality and guarantees of a better future for the poorest and the weakest.”
The AMC for pneumococcal disease will offer an improved market for vaccines now in development. Vaccines are bought only if they meet pre-determined standards of efficacy and safety, and if developing countries ask for them. After 7 to 10 years, the AMC funding is likely to be depleted. The AMC will include terms that help assure a sustained and affordable supply in the long term.
Her Majesty Queen Rania, a member of the board of the GAVI Fund, pointed out that in the poorest regions of the world, two to three million children die of preventable diseases every year.
Her Majesty took particular note of the donor nations that are helping to meet the goal of reducing by two-thirds the number of deaths among the world’s most vulnerable children.
“You are giving the gift of health, and, more than that, the gift of hope,” said the Queen. “Thanks to you, more families will have a fighting chance to see their babies survive, to see their boys and girls grow up, their sons and daughters live productive lives. Thanks to you, entire communities may find the strength to push back against poverty and entire countries may take a step up the ladder of human development.”
Julian Lob-Levyt, executive secretary of the GAVI Alliance, noted that an early version of pneumococcal vaccine is being widely used in developed countries with striking success in preventing disease. However, he added, manufacturers lack the capacity to provide a vaccine well-suited to the developing world on a large scale, and extended protection vaccines are needed to bring pneumococcal disease under control in developing countries.
An independent expert committee, with representation from developing and industrialised countries, recommended that pneumococcal disease be the target of the initial AMC pilot. Going forward, the AMC will be overseen by an independent assessment committee, which will set and monitor standards for the vaccines. The World Health Organization
will facilitate the establishment of the target product profile and assess the quality, safety and immunogenicity of AMC vaccines. The GAVI Alliance and the World Bank will be responsible for supporting the programmatic and financial functions of the AMC.
“We expect that new pneumococcal vaccines will reach developing countries by 2010, at least 10 years earlier than if the AMC were not available,” Lob-Levyt said. “Today’s decision will save lives by bolstering efforts to prevent this disease, while paving the way for future AMCs focused on other deadly diseases.”
and opinion piece
s in major newspapers, gained additional momentum in 2005 with the publication of a report, Making Markets for Vaccines: Ideas to Action by a working group organized by the Center for Global Development
.
Government
Government refers to the legislators, administrators, and arbitrators in the administrative bureaucracy who control a state at a given time, and to the system of government by which they are organized...
or other financial entity, used to guarantee a viable market if a vaccine
Vaccine
A vaccine is a biological preparation that improves immunity to a particular disease. A vaccine typically contains an agent that resembles a disease-causing microorganism, and is often made from weakened or killed forms of the microbe or its toxins...
or other medicine is successfully developed. As a result of such a commitment, the market for vaccines or drugs for neglected diseases would be comparable in size and certainty to the market for medicines for rich countries. This would enable biotech and pharmaceutical companies to invest in the development of new vaccines to tackle the world’s most pressing health problems, such as pneumonia, diarrheal disease, HIV/AIDS, and malaria, in the normal course of their business decisions.
First AMC announced Feb, 2007
On Feb. 9, 2007, five countries (Canada, Italy, Norway, Russia, the United Kingdom), and the Bill & Melinda Gates FoundationBill & Melinda Gates Foundation
The Bill & Melinda Gates Foundation is the largest transparently operated private foundation in the world, founded by Bill and Melinda Gates. It is "driven by the interests and passions of the Gates family"...
committed US$1.5 billion to launch the first Advance Market Commitment (AMC) to help speed the development and availability of a new vaccine which is expected to save the lives of 7 million children by 2030. The AMC pilot represented the first step in a historic effort to create a market for life-saving vaccines for children in the world’s poorest countries. The new initiative will target pneumococcal disease, a major cause of pneumonia and meningitis that kills 1.6 million people every year.
World Bank President Paul Wolfowitz joined Her Majesty Queen Rania Al-Abdullah of Jordan and high-level representatives of Canada, Italy, Norway, Russia, and the United Kingdom in announcing the pilot AMC, which will test a new model for spurring development of vaccines, specifically those that prevent disease strains prevalent in developing countries. The pilot will provide 7 to 10 years of funding to support the development of future vaccines against pneumococcal disease and will include provisions to assure the long term sustainable supply and price for the poorest countries.
“With the launch of the first AMC, we can save lives, and we will do it with the investment and expertise of industry,” said Wolfowitz. “The key aim is to accelerate the production of viable and urgently needed vaccines for the poorest countries where thousands of children die every day from diseases that can be prevented.”
The AMC concept was developed in response to a tragic dilemma, noted Italian Finance Minister Tommaso Padoa-Schioppa
Tommaso Padoa-Schioppa
Tommaso Padoa-Schioppa , Knight Grand Cross was a well-known pro-European Italian banker and economist who was Italy's Minister of Economy and Finance from May 2006 until May 2008...
, whose government has committed US$635 million to the AMC pilot.
“The AMCs are an absolutely innovative approach which combines market-based financing tools with public intervention. This innovative instrument opens a new frontier in the financing of the fight against poverty and endemic diseases,” said Padoa-Schioppa, whose ministry has led the drive to adopt the AMC pilot. “International projects such as this one will make possible to save millions of human lives and demonstrate that development can and must go together with the need to ensure equality and guarantees of a better future for the poorest and the weakest.”
The AMC for pneumococcal disease will offer an improved market for vaccines now in development. Vaccines are bought only if they meet pre-determined standards of efficacy and safety, and if developing countries ask for them. After 7 to 10 years, the AMC funding is likely to be depleted. The AMC will include terms that help assure a sustained and affordable supply in the long term.
Her Majesty Queen Rania, a member of the board of the GAVI Fund, pointed out that in the poorest regions of the world, two to three million children die of preventable diseases every year.
Her Majesty took particular note of the donor nations that are helping to meet the goal of reducing by two-thirds the number of deaths among the world’s most vulnerable children.
“You are giving the gift of health, and, more than that, the gift of hope,” said the Queen. “Thanks to you, more families will have a fighting chance to see their babies survive, to see their boys and girls grow up, their sons and daughters live productive lives. Thanks to you, entire communities may find the strength to push back against poverty and entire countries may take a step up the ladder of human development.”
Julian Lob-Levyt, executive secretary of the GAVI Alliance, noted that an early version of pneumococcal vaccine is being widely used in developed countries with striking success in preventing disease. However, he added, manufacturers lack the capacity to provide a vaccine well-suited to the developing world on a large scale, and extended protection vaccines are needed to bring pneumococcal disease under control in developing countries.
An independent expert committee, with representation from developing and industrialised countries, recommended that pneumococcal disease be the target of the initial AMC pilot. Going forward, the AMC will be overseen by an independent assessment committee, which will set and monitor standards for the vaccines. The World Health Organization
World Health Organization
The World Health Organization is a specialized agency of the United Nations that acts as a coordinating authority on international public health. Established on 7 April 1948, with headquarters in Geneva, Switzerland, the agency inherited the mandate and resources of its predecessor, the Health...
will facilitate the establishment of the target product profile and assess the quality, safety and immunogenicity of AMC vaccines. The GAVI Alliance and the World Bank will be responsible for supporting the programmatic and financial functions of the AMC.
“We expect that new pneumococcal vaccines will reach developing countries by 2010, at least 10 years earlier than if the AMC were not available,” Lob-Levyt said. “Today’s decision will save lives by bolstering efforts to prevent this disease, while paving the way for future AMCs focused on other deadly diseases.”
Origins of the Idea
The idea of such a contract, previously proposed in academic literature by Professor Michael KremerMichael Kremer
Michael Robert Kremer is a development economist and is currently the Gates Professor of Developing Societies at Harvard University. He is a Fellow of the American Academy of Arts and Sciences, a recipient of a MacArthur Fellowship and a Presidential Faculty Fellowship, and was named a Young Global...
and opinion piece
Editorial
An opinion piece is an article, published in a newspaper or magazine, that mainly reflects the author's opinion about the subject. Opinion pieces are featured in many periodicals.-Editorials:...
s in major newspapers, gained additional momentum in 2005 with the publication of a report, Making Markets for Vaccines: Ideas to Action by a working group organized by the Center for Global Development
Center for Global Development
The Center for Global Development is a non-profit think tank based in Washington, D.C. that focuses on international development. It was founded in November 2001 by former senior U.S. official Edward W. Scott, director of the Peterson Institute for International Economics, C. Fred Bergsten, and...
.