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.

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.

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