For two years I worked at the Center for Global Development on Michael Kremer’s idea that donor nations should create stronger commercial incentives for drug companies to develop and manufacture drugs and vaccines needed for developing countries by guaranteeing to pay for them if they are produced.

On 12th June, a group of donors signed the first Advance Market Commitment.  Here is the Wall Street Journal

The $1.5 billion program marks a departure from previous charitable efforts to increase poor countries’ access to vaccines. Instead of buying existing drugs and giving them away, the donors will guarantee pharmaceutical companies a future market big enough to justify developing and manufacturing new vaccines needed in nations too impoverished to afford them on their own.

The donors — Italy, the U.K., Canada, Russia, Norway and the Bill and Melinda Gates Foundation — plan to announce the initiative Friday on the sidelines of a meeting of top finance officials from the Group of Eight major industrial powers, according to Italian officials.

The first target will be a vaccine to prevent pneumococcal disease, which kills 1.6 million people in the world a year, the majority of them young children in the developing world.

The scheme is projected to prevent between five million and eight million child deaths by 2030.

The Center for Global Development has played a remarkable role shepherding the idea from concept to practical scheme to launch.  For me it has been a great privilege to be involved. As well as the possible direct benefits of this particular commitment – perhaps saving millions of lives – we have helped to think about new ways in which the rich can support people in developing countries, in this case using financial incentives to help stimulate the private sector to meet the needs of people in poor countries.