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Supplies and Logistics

AMC for Pneumococcal

The Advance Market Commitment for Pneumococcal Vaccine

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On 12 June 2009, the Advance Market Commitment (AMC) for the supply of Pneumococcal Vaccine was launched. The Pneumo AMC has as its overarching goal the reduction of morbidity and mortality from pneumococcal diseases which represents the leading vaccine-preventable cause of death among young children.

The objectives of the Pneumo AMC are to:
• accelerate the development of vaccines that meet developing country needs;
• bring forward the availability of effective pneumococcal vaccines - through scaling up of production capacity to meet developing country vaccine demand;
• accelerate vaccine uptake - through predictable vaccine pricing for countries and manufacturers; and
• test the AMC concept for potential future applications.

The Pneumo AMC is geared to support the establishment of an annual manufacturing capacity of 200m vaccine doses to meet demand in countries supported by the GAVI Alliance. It is backed by a collective commitment from six donors (the governments of Italy, the United Kingdom, Canada, Russia, Norway, and the Bill and Melinda Gates Fund) to fund US$1.5b. Adding to this amount, both the GAVI Alliance and countries will contribute to the vaccine price, with  GAVI projecting a funding requirement  of US$2.7b from 2011-2015.

Key elements of the Pneumo AMC are the following:
• An initial price per dose of US$7.00 to be paid to the supplier
• A price ceiling for the long term price of a maximum of US$3.50 per dose (Tail Price)
• A 10 year supply commitment period of a certain annual quantity
• A maximum of 5 years to establish the capacity required for the 10 year supply period
• Firm contracting commitment of 20%, 15% and 10% in years 1-3 of the 10 year supply commitment period
• Products meeting the Target Product Profile are eligible for funding
• Products which are WHO pre-qualified and approved by the Independent Assessment Committee can be supplied.

The Pneumo AMC is established through a suite of legal agreements which contain the objectives, terms and conditions and other core elements of the AMC – see http://www.gavialliance.org/funding/pneumococcal-amc/amc-legal-agreements/

For more information on the Pneumo AMC and its implementation as shared with manufacturers during the pre-tender meeting in March 2011, please see https://www.unicef.org/supply/index_57640.html

Progress of the Pneumo AMC
Since September 2010, Pneumo vaccines have been supplied to 28 countries for introduction in national programmes with funding from the AMC. More than 100m doses have been procured as of December 2012; with an expected procurement of more than 70m doses in 2013.
In order to meet demand for the Pneumo Vaccine in GAVI-eligible countries, since the Pneumo AMC launch, UNICEF has issued three calls for supply offers. Following UNICEF’s signing of two supply agreements in July, the following quantities have been awarded:
Vaccine doses contracted for as of July 2013

The awards have been made to the two suppliers which currently have vaccines available for supply that are WHO pre-qualified and are approved by the Independent Assessment Committee of the AMC to meet the specific requirements for AMC funding. (See http://www.gavialliance.org/funding/pneumococcal-amc/about/ on the Target Product Profile).
Based on awards made to date, 73% corresponding to US$1,095m of the AMC donor funds have been committed to current suppliers. This means that US$405m are available to be committed in the future.

UNICEF and Gavi Decision on issuing a call for offers (2016)
UNICEF and Gavi the Vaccine Alliance have agreed, based on the Strategic Demand Forecast version 11 and 12 and the applicable regulations of the AMC, not to issue a Call for Supply Offer during 2016. The rationale of the decision and the applicable AMC regulations are detailed in this document. A re-assessment of the situation - with information from the next SDF and outcomes of the next rounds of applications for New Vaccines Support for PCV to Gavi – will take place again later in 2016.

AMC funds available for future commitments, and funds committed per supplier as of July 2013

The total maximum values of the contracts signed to date including GAVI and country co-payments amount to US$6,048m.
Due to the rapidly increasing demand for pneumococcal vaccine, 100% of offered supply capacity has been awarded for 2013 and 2014.
Tail prices awarded in response to the latest call for offers have declined, with the potential for the GAVI Alliance and countries to save up to $157m over the coming 11 years provided all contracted doses are procured, and when comparing to the applicable tail prices prior to the conclusion of the tender.
The tail price reduction from Pfizer Inc. applies to all three contracts, with a price of $3.40 to apply from July 2013 and of $3.30 from 2014 and beyond. As a condition to access this price, it has been agreed that AMC donor funding is fully disbursed by 2015 at the latest, and that GAVI provides a financial guarantee for the tail price component of a total of 80% of the doses on contract in 2013-2015.
The tail price reduction from GlaxoSmithKline Biologicals applies to the new contract only and is unconditional.   This new tail price from GlaxoSmithKline is $3.40 per dose.
For more information on this award and on the AMC in general, see http://www.gavialliance.org/funding/pneumococcal-amc/manufacturers/

The importance of manufacturers with products not yet licensed making a proposal
In order for UNICEF to best meet the procurement objectives, it is critical to have information about vaccines in development, including timelines expected for WHO pre-qualification and supply availability. As awards are made for supply beginning up to five years into the future and for a 10 year supply commitment period, information on new products potentially to reach the market within the coming five years will guide decisions on which quantities to award now and which quantities to leave for future suppliers, in order to best support the AMC objectives.
Furthermore, due to the AMC provisions, UNICEF may enter into a Provisional Supply Agreement with a manufacturer as soon as WHO has accepted the Product Summary File for review. This is a deviation from UNICEF’s standard practices where only manufacturers with a WHO pre-qualified vaccine could be awarded.
Therefore, UNICEF encourages all manufacturers with a Pneumococcal Vaccine in development, expecting to reach the market within five years to submit a proposal in response to a Call for Offers.

To become an AMC Registered supplier, please follow the instructions on http://www.gavialliance.org/funding/pneumococcal-amc/manufacturers/
Registering does not imply any commitments from manufacturers to participate. However, it is a requirement for having a proposal assessed by UNICEF. 

Date of publication: July 2013



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