How Should the World Pay for a Coronavirus Disease (COVID-19) Vaccine?

Covid-19 pandemic continues to have a devastating impact on the global health and economic condition. Covid-19 vaccine provides a much needed ‘exit strategy’ from this crisis. It is far from clear on various financing models to develop therapeutics for the health crisis that impacts almost all the countries simultaneously. 

Towse proposes a collaborative, market-based financing model for the world to incentivize and fund for the development, production and access of coronavirus disease (COVID-19) vaccine. The paper discusses the “push and pull framework”, first generation covid-19 vaccine development, advance market commitment (AMC) vs advance purchase commitments, and Benefit-Based Advance Market Commitment (BBAMC) based models. Finally ending lessons for future pandemic readiness. 

Push vs Pull Incentive

  • Push incentives aim to reduce R&D cost and manufacturing infrastructure cost. 
  • Pull incentives seeks to compensate for market dynamics (by creating the market thereby reducing commercial risk)
  • Authors push vs pull incentives through the lens of High-Income countries(HICs), low-income countries (LICs) (explaining role of Gavi – The Vaccine Alliance)
Illustration of COVID-19 vaccine proposals in push vs pull or combination of both. (Source: Towse A., Firth I., 2020. How should the world pay for a COVID-19 vaccine? OHE Annual Lecture 2020. Office of Health Economics. Available:

Advance Market Commitment (AMC) vs Advance Purchase Commitments (APC)

  • AMC as a pull incentive was first used in pneumococcal vaccine to shorten availability of the vaccine in LICs. 
  • From payer’s perspective, the value of APCs is crucial for acquiring scarce resources, but at a very high cost. 

Using HTA and Cost-Effectiveness to Create a Benefit-Based Advance Market Commitment (BBAMC)

  • Authors proposes BBAMC to tackle uncertainties around demand and supply for the vaccine, and discusses potential concerns with the approach.

Finally, the paper provides three lessons for future pandemic readiness

  • Need to develop market mechanisms
  • Some preferential access to the successful vaccine hosting country for future pandemic priority products.
  • A robust financial arrangement to pay for LIC and LMIC  should be pre-agreed and triggered.


Towse, Adrian, et al. “How Should the World Pay for a Coronavirus Disease (COVID-19) Vaccine?” Value in Health, 2021,

Feature image source

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