Advance Market Commitments (AMCs) are a type of funding mechanism designed to stimulate the development of new vaccines. They essentially guarantee innovators an acceptable price for vaccines in developing countries that meet a pre-defined performance profile.
Providing a market for new vaccines in the developing world
The Need for AMCs
Vaccines are a powerful tool to fight childhood death. Yet for many diseases—such as HIV/AIDS, malaria, and tuberculosis—a vaccine still does not exist. In other cases, the existing vaccines are not suitable for the developing world or they are not reaching the children who need them quickly enough. AMCs were created to spur research and development for new vaccines and mobilize faster distribution by guaranteeing a paying market to biotechnology and pharmaceutical companies.
How AMCs Work
Donors subsidize the cost of medicines to ensure that biopharmaceutical companies can recoup their initial investment costs. These subsidies enable companies to sell their vaccines at a set price that is attractive to the company, yet affordable in even the world’s poorest nations. In exchange, the company pledges to drop the price of the vaccine after a certain amount of time has passed or a particular number of units have been sold.
BIO Ventures for Global Health's Role in AMCs
BIO Ventures for Global Health played an important role in shaping the AMC program. In May 2006, we published a report highlighting our recommendations for developing the AMC program. Then we worked with The World Bank and the Global Alliance for Vaccines and Immunizations to incorporate many of the recommendations in our report into the very first AMC pilot for pneumococcal vaccines.
The First AMC – Pneumococcal Vaccine
In 2007, five industrialized nations (Italy, the United Kingdom, Canada, Russia, and Norway) and the Bill and Melinda Gates Foundation collaborated on an AMC designed to attract investment in pneumococcal vaccines. The AMC guarantees payment to companies that introduce a new vaccine geared to developing countries.
Although this AMC was targeted more at incentivizing the building of manufacturing capacity, BIO Ventures for Global Health is advocating for future AMCs to incentivize the research and development of novel products aimed at the developing world.