Chapter 7 : Center for Global Development : Initiatives: Completed Initiatives: Making Markets for Vaccines: Chapters

Chapter 7: How sponsors can do it

Chapter at a glance

Government sponsors can make legally binding commitments—and do so all the time. Private sponsors can too, and their involvement would add to the credibility of the commitment.
The commitment can be handled within existing government budget processes.
Under normal accounting rules for the sponsors included in the analysis, there is no cost to sponsors until and unless a vaccine is developed.
There is no short-term budgetary tradeoff with existing funding of R&D.
Existing procurement and regulatory arrangements can be used.
An advance market commitment will require the sponsors to enter into an agreement, enforceable by law, to make multiyear payments of uncertain size and duration (though with a known upper limit) to an unknown recipient at some unknown time in the future. Can sponsors, as matter of practical fact, make a commitment of this sort? We looked at whether there are any institutional or legal obstacles to making commitments and how such commitments would be treated in the budget process. We found that there are no obstacles to sponsors making this commitment.