Health Affairs
August 2011; Volume 30, Issue 8
New Perspectives On Substance Abuse
http://content.healthaffairs.org/content/current

Global Health Financing
Economic Perspectives On The Advance Market Commitment For Pneumococcal Vaccines
Christopher M. Snyder, Wills Begor, and Ernst R. Berndt
Health Aff August 2011 30:1508-1517; doi:10.1377/hlthaff.2011.0403

Abstract
Pharmaceutical companies have long been reluctant to invest in producing new vaccines for the developing world because they have little prospect of earning an attractive return. One way to stimulate such investment is the use of an advance market commitment, an innovative financing program that guarantees manufacturers a long-term market. Under this arrangement, international donors pay a premium for initial doses sold to developing countries. In exchange, companies agree to continue supplying the vaccine over the longer term at more sustainable prices. This article provides a preliminary economic analysis of a pilot advance market commitment program for pneumococcal vaccines, explaining the principles behind the program’s design and assessing its early performance. Spurred by the advance market commitment—and other contemporaneous initiatives that also increased resources to vaccine suppliers—new, second-generation pneumococcal vaccines have experienced a much more rapid rollout in developing countries than older first-generation vaccines.