Lecce, Italy, 12 June 2009 - The Finance Ministers of Italy, Canada and Russia, together with the United Kingdom, Norway and the Bill & Melinda Gates Foundation, the World Bank Group, the GAVI Alliance, UNICEF and WHO, formally activated the implementation phase of the Advance Market Commitment (AMC) pilot project to accelerate introduction of vaccines against pneumococcal diseases in developing countries. In so doing, donors delivered on their $1.5-billion commitment, made in Rome on February 9 2007, when they decided to adopt the innovative AMC approach to save lives in the world's poorest nations.
Pneumococcal diseases claim 1.6 million lives each year - including up to one million children under five, with more than 90 percent of these deaths occurring in developing countries. Pneumonia, the most common form of serious pneumococcal disease, accounts for one in every five child deaths, making it the leading cause of death among young children. GAVI estimates that the AMC pneumococcal pilot could prevent more than seven million childhood deaths by 2030, substantially contributing to the achievement of the Millennium Development Goal on Child Health (MDG4).
Today's milestone was reached only three and a half years after the Tremonti Report, which proposed to the G8 Finance Ministers that the investment model known as Advanced Market Commitments (AMCs) be put into practice. AMCs aim at encouraging the development and production of vaccines tailored to the needs of developing countries by creating market incentives for vaccine makers to invest the considerable sums required to conduct research or build manufacturing capacity.
"Three and a half years is a very long time for the poor and the sick, but it is a short time to translate what is a complex and innovative idea into a concrete project" said the Italian Finance Minister Giulio Tremonti. "Italy is proud to support the AMC initiative: immunization is an investment in human capital that fosters long term economic development."
Normally pharmaceutical companies have little interest in investing in research, development and manufacturing of vaccines for the developing world because countries usually cannot afford them. Through an AMC, donors commit money to guarantee the price of vaccines once they have been developed and manufactured, thus creating the potential for a viable future market. In turn, companies that participate in the AMC will make legally binding commitments to supply the vaccines at lower and sustainable prices after the donor funds are spent.
The AMC against pneumococcal disease will prompt the establishment of new production plants dedicated to pneumococcal vaccines. Over the long term, this will create a self-sustainable market at affordable prices for recipient countries. The currently existing pneumococcal vaccine is sold at over US$70 in industrialized countries. But thanks to the AMC, the long term price for developingcountries will be US$ 3.50. In June 2008 the GAVI Alliance Board confirmed its intent to provide US$1.3 billion to support the purchase of pneumococcal vaccines by poor countries interested in buying them. GAVI hopes to assist up to 60 of the world's poorest countries to introduce these vaccines by 2015.
"I endorse the Advance Commitment being launched today. This innovative mechanism, now launched for pneumococcal vaccine but which I hope will extend to other diseases, enables those who need vaccines in the developing world to access them" said Dr. Richard Sezibera, the Minister of Health of Rwanda. "It gives industry - including industry in the developing world - certainty of a market and reasonable profit while on the other, offering the countries like mine the opportunity to deal with the major health challenges affecting our people".
With today's ceremony, donors are making the AMC fully operational, helping create a new market with all parties having signed the package of legal agreements that outline their respective roles. In addition to financial support, GAVI will provide administrative and programmatic support. As agreed at a recent Board meeting, the World Bank will provide the financial services platform to ensure the AMC works effectively. WHO will pre-qualify the vaccines, and UNICEF will be responsible for vaccine procurement and international distribution on behalf of governments.
Pharmaceutical companies can register their interest in participating in the AMC from 15 June 2009. Donor funds are not provided until after the proposed vaccines have met stringent, pre-agreed technical criteria and developing countries request them.
The ceremony, hosted by Minister Tremonti - and chaired by Professor David Fleming, one of the chief architects of the AMC concept and model - witnessed the participation of the Finance Ministers and other senior officials of donor and implementing countries, the Bill and Melinda Gates Foundation, GAVI Alliance CEO, Julian Lob-Levyt, the World Bank Group President, Robert B. Zoellick, along with representatives of the two major pharmaceutical associations representing both developed and developing world manufacturers - International Federation of Pharmaceutical Manufacturers Associations (IFPMA) and the Developing Countries Vaccine Manufacturers' Network (DCVMN).
AMC donor contributions (US$)
Italy $635 million
UK $485 million
Canada $200 million
Russia $ 80 million
Norway $ 50 million
The Bill & Melinda Gates Foundation $ 50 million
TOTAL $ 1.5 Billion