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Advance Market Commitments: Insights from Theory and Experience

Author

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  • Michael Kremer
  • Jonathan Levin
  • Christopher M. Snyder

Abstract

Ten years ago, donors committed $1.5 billion to a pilot Advance Market Commitment (AMC) to help purchase pneumococcal vaccine for low-income countries. The AMC aimed to encourage the development of such vaccines, ensure distribution to children in low-income countries, and pilot the AMC mechanism for possible future use. Three vaccines have been developed and more than 150 million children immunized, saving an estimated 700,000 lives. This paper reviews the economic logic behind AMCs, the experience with the pilot, and key issues for future AMCs.

Suggested Citation

  • Michael Kremer & Jonathan Levin & Christopher M. Snyder, 2020. "Advance Market Commitments: Insights from Theory and Experience," AEA Papers and Proceedings, American Economic Association, vol. 110, pages 269-273, May.
    • Handle: RePEc:aea:apandp:v:110:y:2020:p:269-73
    DOI: 10.1257/pandp.20201017
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    Cited by:

    1. Daniel P. Gross & Bhaven N. Sampat, 2022. "Crisis Innovation Policy from World War II to COVID-19," Entrepreneurship and Innovation Policy and the Economy, University of Chicago Press, vol. 1(1), pages 135-181.
    2. Dubois, Pierre & Moisson, Paul-Henri & Tirole, Jean, 2022. "The Economics of Transferable Patent Extensions," TSE Working Papers 22-1377, Toulouse School of Economics (TSE), revised Dec 2022.
    3. Giorgio Tripodi & Francesco Lamperti & Roberto Mavilia & Andrea Mina & Francesca Chiaromonte & Fabrizio Lillo, 2022. "Quantifying knowledge spillovers from advances in negative emissions technologies," LEM Papers Series 2022/17, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    4. Agarwal, Ruchir & Gaule, Patrick, 2022. "What drives innovation? Lessons from COVID-19 R&D," Journal of Health Economics, Elsevier, vol. 82(C).
    5. Gauri Kartini Shastry & Daniel L Tortorice, 2021. "Effective Foreign Aid: Evidence from Gavi’s Vaccine Program," Working Papers 2102, College of the Holy Cross, Department of Economics.
    6. Kyle, Margaret K., 2022. "Incentives for pharmaceutical innovation: What’s working, what’s lacking," International Journal of Industrial Organization, Elsevier, vol. 84(C).
    7. Amrita Ahuja & Susan Athey & Arthur Baker & Eric Budish & Juan Camilo Castillo & Rachel Glennerster & Scott Duke Kominers & Michael Kremer & Jean Lee & Canice Prendergast & Christopher M. Snyder & Ale, 2021. "Preparing for a Pandemic: Accelerating Vaccine Availability," AEA Papers and Proceedings, American Economic Association, vol. 111, pages 331-335, May.
    8. Cozzi, Guido, 2022. "Shall we fear a Patent Waiver? Not for Covid-19 Vaccines," MPRA Paper 111990, University Library of Munich, Germany.
    9. Snyder, Christopher M. & Hoyt, Kendall & Gouglas, Dimitrios, 2023. "An optimal mechanism to fund the development of vaccines against emerging epidemics," Journal of Health Economics, Elsevier, vol. 91(C).
    10. Manheim, David & Foster, Derek, 2020. "Option-based guarantees to accelerate urgent, high risk vaccines: a new market-shaping approach," OSF Preprints swd4a, Center for Open Science.
    11. Chiappinelli, Olga & Giuffrida, Leonardo M. & Spagnolo, Giancarlo, 2023. "Public procurement as an innovation policy: Where do we stand?," ZEW Discussion Papers 23-002, ZEW - Leibniz Centre for European Economic Research.
    12. Michael Kremer & Jonathan Levin & Christopher M. Snyder, 2022. "Designing Advance Market Commitments for New Vaccines," Management Science, INFORMS, vol. 68(7), pages 4786-4814, July.
    13. Witold Więcek & Amrita Ahuja & Michael Kremer & Alexandre Simoes Gomes & Christopher Snyder & Alex Tabarrok & Brandon Joel Tan, 2021. "Could Vaccine Dose Stretching Reduce COVID-19 Deaths?," NBER Working Papers 29018, National Bureau of Economic Research, Inc.
    14. David E. Bloom & Michael Kuhn & Klaus Prettner, 2022. "Modern Infectious Diseases: Macroeconomic Impacts and Policy Responses," Journal of Economic Literature, American Economic Association, vol. 60(1), pages 85-131, March.
    15. Jaspreet Pannu, 2020. "Inclusive Biomedical Innovation during the COVID‐19 Pandemic," Global Policy, London School of Economics and Political Science, vol. 11(5), pages 647-649, November.
    16. Daniel P. Gross & Bhaven N. Sampat, 2021. "The Economics of Crisis Innovation Policy: A Historical Perspective," AEA Papers and Proceedings, American Economic Association, vol. 111, pages 346-350, May.
    17. Jonas Meckling & Joseph E. Aldy & Matthew J. Kotchen & Sanya Carley & Daniel C. Esty & Peter A. Raymond & Bella Tonkonogy & Charles Harper & Gillian Sawyer & Julia Sweatman, 2022. "Busting the myths around public investment in clean energy," Nature Energy, Nature, vol. 7(7), pages 563-565, July.
    18. Chen, Simiao & Prettner, Klaus & Kuhn, Michael & Bloom, David E., 2021. "The economic burden of COVID-19 in the United States: Estimates and projections under an infection-based herd immunity approach," The Journal of the Economics of Ageing, Elsevier, vol. 20(C).
    19. Auboin, Marc & Koopman, Robert & Xu, Ankai, 2021. "Trade and innovation policies: Coexistence and spillovers," Journal of Policy Modeling, Elsevier, vol. 43(4), pages 844-872.
    20. Achim Wambach, 2021. "Besseres Marktdesign im Gesundheitswesen," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 101(8), pages 590-593, August.
    21. Brian C. Albrecht & Shruti Rajagopalan, 2023. "Inframarginal externalities: COVID-19, vaccines, and universal mandates," Public Choice, Springer, vol. 195(1), pages 55-72, April.
    22. Barrett, Christopher B. & Gόmez, Miguel I., 2024. "Fostering healthy, equitable, resilient, and sustainable agri-food value chains," IAAE 2024 Conference, August 2-7, 2024, New Delhi, India 344330, International Association of Agricultural Economists (IAAE).
    23. Gaurab Aryal & Federico Ciliberto & Leland E. Farmer & Ekaterina Khmelnitskaya, 2022. "Valuing Pharmaceutical Drug Innovations," Papers 2212.07384, arXiv.org, revised Apr 2024.

    More about this item

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • I15 - Health, Education, and Welfare - - Health - - - Health and Economic Development

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