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Advance Market Commitments (AMCs)

A new approach to public health funding, Advance Market Commitments (AMCs), are designed to stimulate the development and manufacture of vaccines specifically for developing countries. The pilot AMC is for a new vaccine to target pneumococcal disease.

Donors commit money to guarantee the price of vaccines once they have been developed, thus creating the potential for a viable future market. Decisions about which diseases to target, criteria for effectiveness, price and long-term availability are made in advance by an independent advisory group.

The donor commitments provide vaccine makers with the incentive they need to invest the considerable sums required to conduct research, train staff and build manufacturing facilities.

As part of the AMC, participating companies also make binding commitments to supply the vaccines at lower and sustainable prices after the donor funds made available for the initial fixed price are used up. Ultimately, developing country governments are able to budget and plan for immunisation programmes, knowing that vaccines will be available in sufficient quantity, at a price they can afford, for the long term.

Targeting pneumococcal disease

In June 2009, after two years of preparatory work, GAVI, the World Bank, WHO and UNICEF, five national governments and the Bill & Melinda Gates Foundation signed legal documents to formally kick-off the first-ever AMC, designed to accelerate access to vaccines against pneumococcal disease.

Although a pneumococcal vaccine has existed since 2000 and is part of regular immunisation programmes in developed countries, there is not a suitable and affordable vaccine for developing countries. This pilot AMC aims to address this challenge by stimulating the late stage development and manufacture of suitable vaccines at affordable prices. The currently existing pneumococcal vaccine is sold at over US$70 per dose in industrialised countries. But thanks to the AMC, the long term price for developing countries will be US$ 3.50.

Pneumococcal disease takes the lives of 1.6 million people each year – including up to one million children before their fifth birthday. More than 90 percent of these deaths occur in developing countries. It is estimated that this pilot project could prevent more than seven million childhood deaths by 2030.

In the AMC pneumococcal pilot, the governments of Italy, the United Kingdom, Canada, Russia, and Norway and the Bill & Melinda Gates Foundation have committed US$ 1.5 billion, with GAVI promising to allocate $ 1.3 billion through 2015.

Implementing countries will provide a small co-payment to contribute towards the cost of the vaccines. The World Bank provides fiduciary support, the World Health Organization has established the minimum technical criteria for a suitable pneumococcal vaccine and UNICEF will be responsible for vaccine procurement and distribution.

Companies that participate in the AMC will make legally binding long term commitments to supply the vaccines at lower and sustainable prices after the donor funds are spent.

In March 2010, GlaxoSmithKline (GSK) and Pfizer Inc. became the first two companies to make long-term commitments to supply new vaccines for the Pneumo AMC. The two participating firms committed to supply 30 million doses each per year for a 10 year period.

These vaccines will be made available at US $ 3.50 per dose to be paid by GAVI and the developing country governments that introduce the vaccines. For approximately 20% of the doses, companies will also receive an additional payment of US $ 3.50 for each dose they provide, which is paid with donor commitments (AMC funds). In total, this is a fraction of the current cost of pneumococcal vaccines in many industrialised countries.

Firms can still make offers under the AMC as new calls for supply offers will be issued over time. As more companies participate in the AMC, the long term vaccine price could drop further.

Before introduction can begin, vaccines must be prequalified by the World Health Organization and approved by the AMC’s Independent Assessment Committee (IAC); approval is expected in 2010.

GAVI hopes to assist up to 60 of the world’s poorest countries to introduce these vaccines by 2015.

Lessons learnt from this first AMC will help in the planning of other AMCs to tackle diseases such as HIV/AIDS, malaria and tuberculosis.