In this initial Advance Market Commitment (AMC), Italy, the United Kingdom, Canada, Norway, Russia and the Bill & Melinda Gates Foundation have joined forces guarantee a $1.5 billion market for new vaccines to prevent deadly respiratory infections in children in developing countries.
The money, which will be used to subsidise the purchase of pneumococcal vaccines, thus create an incentive for manufacturers to develop products for countries that cannot pay for the vaccines.
“AMCs will change the landscape of neglected disease research and development by creating markets for vaccines in developing nations,” said Christopher D. Earl, President and CEO of BIO Vision for Global Health, an umbrella body supporting the scheme set up by the US Bioindustry Organisation. “Industry initiative is critical to filling the pipeline of new vaccines to treat neglected diseases and the strongest incentives for investment are real, addressable markets.”
During 2006 BVGH consulted more than 150 industry executives to identify how AMCs should be structured to stimulate industry to initiate R&D programmes for new vaccines. This was distilled into a report, published last May, and many of the report’s recommendations subsequently found their way into the design of today’s initial AMC pilot by experts at the World Bank and the Global Alliance for Vaccines and Immunisations.
Currently, the global market for vaccines – products with the greatest potential impact in poor countries – is about $6 billion, less than 2 per cent of the amount spent on pharmaceuticals overall. And the total market for vaccines in the developing world is a mere $500 million a year, equivalent to 4 per cent of sales for the leading cholesterol-lowering drug.
Low market pull
In low-resource countries, there is simply too little market pull. The world’s least developed nations spend $17 per capita per year on health. Other low-income countries spend an average of $36. High-income regions like Europe and Japan spend, on average, more than 60 times as much.
The hope is that the pneumococcal vaccines programme will be the first in a series of donor commitments to create markets for the world’s most devastating diseases, including tuberculosis and malaria.
“Lack of market opportunities for products that address neglected diseases has made it difficult for some companies to advance innovative medicine and has kept others out of the field entirely,” said Earl. “To spur industry investment, developing world opportunities must be strong enough to compete with product opportunities in the developed world.”
Under AMCs, donors commit to guaranteed preferential prices for a certain number of vaccines sold to the poorest countries. In return, manufacturers agree to lower their prices substantially after an agreed-upon period to ensure long-term access by countries with patients most in need.
Receive our Policy Bulletin each Tuesday & Thursday and news about bridging Europe’s east-west innovation gap twice a month in The Widening. 
