Transcript Document

The Advance Market Commitment
Innovative Finance for Development
Tania Cernuschi
AMC Secretariat
GAVI Alliance
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What is an AMC?
A financial commitment by donors to subsidise
vaccine purchase at a set price, if & when:
Source: GAVI
 they are developed
 meet minimum specified criteria
 demanded by GAVI-eligible countries
An AMC is a pull funding mechanism, additional to current
package of solutions, e.g. push funding, support for purchase of
current products, system strengthening.
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The basic concept
Guaranteed
first stage price (AMC price)
Price
AMC price
In return, firms obliged to
sell at lower long run price (tail price)
AMC Funds
Low tail price
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15~20 yrs
Quantity
(& time)
The AMC is designed to get life-saving vaccines to developing
countries faster and at a sustainable price
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Which challenges are we targeting?
Challenges to introduction
of vaccines in developing
countries:
AMC Objectives:
 Vaccine formulations and
presentation for developing
countries
1. Accelerate and influence
vaccine development
 Vaccines may not be available in
sufficient quantity at the time of
demand
2. Ensure availability
 Sustainable, affordable pricing
3. Enhance uptake
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How does an AMC help?
The AMC incentivises:
 COUNTRIES – Guarantee of future financing before funds needed to
purchase doses; predictability of long term tail price
 INDUSTRY – Assurances of future price as incentive for more timely
investment by industry; new “market” can bring in additional firms
The AMC only provides funds if vaccines are developed and are
requested by developing countries
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AMC timeline
G7: Launch of
consultation process
on pilot AMC
2005
Launch of the
Pilot AMC:
1.5 billion
US$
Feb. 2007
Publication of
Economic Expert
Group Final Report
1 April 2008
Implementation
details defined
May 2008
2008
2005
Publication of
‘Making Market for
Vaccines’
2005
Disease Expert
Committee:
Recommendation
on Pilot
Feb. 2006
Donors, GAVI and World Bank
preparing AMC Pilot
implementation
 Role of different organizations defined
 IAC members selected by panel of public
health leaders
 TPP approved by DG of WHO – Dec. 2007
Consultations with different stakeholders
 M&E Study
Legal Agreements
Legal Agreements
Signature of Final
T&C, Donors,
Stakeholders' & Offer
Agreements
July 2008
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AMC timeline
T&C, Offer,
Stakeholders’
Agreement
Signed
2008
First
Vaccine
Approved
(2009)
(cont’d.)
Second
Vaccine
Approved
(2012)
Third
Vaccine
Approved
(2016)
2030
2008
GAVI eligible countries can
apply for AMC approved
vaccines through regular
application procedures
Guarantee terms set
Contract binding on sponsors
Product specifications set through TPP
Supply Agreement
Price guarantee
Manufacturing capacity
Companies sign on
Vaccines delivered
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Center for Global Development

Ruth Levine
Vice President for Programs and Operations
and Senior Fellow

Michael Kremer
Gates Professor of Developing Societies,
Harvard University Department of Economics

Alice Albright
CFO, GAVI Fund
http://www.cgdev.org/section/initiatives/_archive/vaccinedevelopment
Back
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Disease Expert Group
Membership
Composed of a range of experts in public health,
developing country health systems, legal affairs
and immunization
Chair: Dr. Ntaba, former Minister of Health, Malawi
Mission: Recommend most suitable disease for pilot
AMC
Timeline: Paris, February 2006
Disease considered: HIV, HPV, Malaria, Rotavirus,
Tuberculosis, Pneumococcus
Decision: Pneumococcus
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Why pneumococcal diseases?

There is a high disease burden: Potential to prevent 5.8 million deaths by 2030

Quick measure of effectiveness of AMC concept:
o
Science and technology for effective pneumococcal vaccine are well
understood
o
There is robust pipeline that includes several efficacious vaccines for target
countries

Importance of accelerating the development, capacity scale-up and reducing
manufacturing costs

Cost-effective intervention: Pneumo vaccines are likely to fit into existing
delivery systems; concerns about growing antibiotic resistance
Back
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Target Product Profile
Attribute
Minimally Acceptable Profile
Vaccines sereotypes
• Must cover at least 60% of invasive disease isolates in target region
• Must include 1,5,14
Immunogenicity
In accordance with WHO criteria: non inferiority to a licensed pneumo vaccine
Target population
Prevent disease among children < 5, in particular < 2
Safety, reactogenicity
Similar to currently licensed vaccine
Dosage and schedule
Compatible with national infant immunization programmes and no more than 3 doses in first year
of life
Interference
No significant interaction or interference with currently administered vaccines
Routes of administration
Intramuscolar or subcutaneous
Product presentation
Mono-dose or low multi-dose
Product Formulation
Liquid formulation
Storage and cold chain
Stable at 2-8 °C with shelf life of at least 24 months
Packaging and labelling
In accordance with WHO recommendations
Product registration and
pre-qualification
WHO pre-qualified
Post marketing surveillance
In accordance with national regulatory authorities and WHO prequalification requirements
Back
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Optimising the AMC design
ECONOMIC EXPERT GROUP
Lead world experts in development economics,
health economics, contract law, vaccine delivery
systems, vaccine business development, public health
Mission: Recommend financial terms of AMC
Timeline: Summer 2007- April 2008
Consultations with stakeholders
and empirical analysis/scenarios
1 April 2008: Final Report
AMC Donor Committee:
Analyses report and makes a decision
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Economic Expert
Group
(EEG):
1.
Overview of findings
SPECIAL NATURE OF PNEUMO
Key issue is to incentivize manufacturing capacity
 Demand risk
 A lucrative market exists in high- and middle-income countries
 There is relatively little competition likely at least in early years
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Modify the basic AMC structure to increase efficiency and efficacy of AMC. In
particular, need to ensure building of sufficient capacity to meet GAVI demand
2.
Strategic demand forecast for GAVI countries – Accelerated Introduction Plan –
Vaccine Demand Routine Immunizations
225
200
Doses (Millions)
175
150
125
100
75
50
25
0
08 0 09 0 10 0 11 0 12 0 13 0 14 0 15 0 16 0 17 0 18 0 19 0 20 0 21 0 22 0 23 0 24 0 25 0 26 0 27 0 28 0 29 0 30
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2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
2
Updated, December 2007. Source: Pneumo ADIP
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How to modify the AMC
A. Supply commitments
Companies should commit to supply
portion of forecast developing country
demand. In return, companies would be
apportioned access to share of AMC’s
$1.5bn resources.
For example, if a company guarantees to
supply 30% of forecast demand, then 30%
of available AMC funds would be
allocated to subsidise purchase of its
vaccine.
After these funds are used up, the
company would be obligated to supply a
proportional amount vaccines at AMC
tail price.
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B. Mitigate risk by frontloading price
Framework Design
Tail Price



Frontloading 1
Tail Price
The Donor Committee agreed to
mitigate industry’s risk with
frontloading of price.
If demand substantially less than anticipated, frontloading reduces firms’ financial
exposure.
Firms value earlier revenues.
Frontloading would not increase overall amount of AMC subsidy that any one
company receives. It only means that each company receives its portion of an
AMC faster – but would also transition faster to supplying at low tail price.
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C. Sequential tendering
The AMC funds will most likely be divided and allocated within
sequential offers. The first offer would be available from start of the
AMC and accessible for all companies that produce vaccines in the
early years. The remaining funds would be made available under
future offers, during later years of the AMC period.
WHY?
 Uncertainty about demand will be resolved through first round of
tender/delivery
 Permits market to be split among additional entrants
(potentially including emerging)
 Increases responsiveness to country choice
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D. Ensure there is low and hard cap on tail price
Price
AMC price
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The AMC ensures the long term price is
sustainable in the long term
AMC Funds
Low tail price
Quantity
(& time)
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What does it mean for GAVI-eligible
countries?
 Correct formulation and presentation of vaccines will be
developed
 They will become available faster and in the right
quantities to cover demand
 The price for developing countries will be known years
before procurement starts
 Availability of support funding is known years in advance
 GAVI countries are empowered to chose the vaccine they
want
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World Health Assembly Resolution 60.30
We believe the AMC can be an effective
‘incentive mechanism to addressing the
linkage between the cost of research and
development and the price of vaccines’
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Thank you for your attention