What if markets could solve some of the world’s most pressing global development challenges? Incentivizing innovation through pull financing can do just that by driving the private sector to develop, test, and scale innovations to save lives and change the world. Pull financing uses the promise of future sales or other revenue to “pull” new solutions to seemingly intractable social problems to market. It can take several different forms, including advance market commitments (AMCs), advanced purchase agreements, volume guarantees, milestone payments, market entry prizes, and others.
The initial AMC concept was refined, tested, and incubated at CGD, in collaboration with Nobel Prize winner Michael Kremer, targeting the development of pneumococcal vaccines. As a result of this policy proposal, five countries (Canada, Italy, Norway, UK, and Russia) and the Bill & Melinda Gates Foundation committed $1.5 billion to a pilot program for a vaccine to prevent the strains of pneumococcal disease common in developing countries. Just over 10 years later, Operation Warp Speed helped bring COVID-19 vaccines to market at record speed, resulting in the fastest vaccine rollout in history and showing the world how effective pull financing can be.
There’s now an explosion of interest in using similar approaches to tackle other intractable problems, from vaccine R&D, to the development of new antimicrobials, to climate resilience and beyond. A new AMC is already working to accelerate carbon capture, and CGD experts are also exploring new use cases to improve climate outcomes and to develop resilient, low-cost infrastructure. CGD’s deep expertise and policy research offer a valuable resource to policymakers and advocates looking to scale and accelerate innovation for our shared future.
Our Work on Pull Financing
- A Rallying Cry for More US Health Innovation at “Warp Speed”
- The World Needs New Antibiotics. A Proposed US Program to Develop Them Would Pay Off 28:1
- What We’re Hearing: Potential Pull Mechanism Use Cases for High-Value Global Health Innovation
- Market-driven Value-based Advance Commitment (MVAC) for Tuberculosis
- Make Me a Match: We Want Your Ideas to Kick-Start Promising Global Health Innovations with Demand-Side Funding
Climate and Development
- What Would Pull Finance for Climate Actually Look Like? Applications for Cleaner Cooling and Alternatives for Stubble Burning
- Pull Financing for Climate Technologies Makes Sense. Who Should Run It?
- For Climate Finance, Stop Counting Beans and Start Counting Beanstalks: The Case for a Pull Mechanism
- Navigating the Straits: Pull Financing for Climate and Development Outcomes
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