Advance market commitments

An advance market commitment (AMC) is a binding contract, typically offered by a government or other financial entity, used to guarantee a viable market for a product once it is successfully developed. Generally AMCs are used in circumstances where the cost of developing a new product is too high to be worthwhile for the private sector without a guarantee of a certain quantity of purchases in advance. An advance market commitment (AMC) is a binding contract, typically offered by a government or other financial entity, used to guarantee a viable market for a product once it is successfully developed. Generally AMCs are used in circumstances where the cost of developing a new product is too high to be worthwhile for the private sector without a guarantee of a certain quantity of purchases in advance. As such, AMCs have been used in the creation of vaccines or other medicine with high up-front development costs. 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 encourage 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. On Feb. 9, 2007, five countries (Canada, Italy, Norway, Russia, the United Kingdom), and the Bill & Melinda Gates Foundation 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.