The vaccine being developed by British-Swedish drugmaker AstraZeneca and the University of Oxford has so far managed to score the maximum deals.

Advance Vaccine Purchase Agreements (APA) or Advance Market Commitments (AMC) are deals that governments, international organizations, private companies, or public insurers strike with vaccine makers to procure a substantial number of doses of vaccines — even before they are ready. The idea is to incentivise vaccine firms to produce certain vaccines that they feel may not be profitable enough or may not have a big enough market. The agreements give drugmakers security to invest in R&D and scale up the production of vaccines.

APAs are especially crucial for poorer nations, which often see pharmaceutical giants look the other way when it comes to spending on infectious disease outbreaks in low-middle income countries. Bulk vaccine purchases by governments and international organizations also help bring down their price. The terms of APAs vary from deal to deal. In many cases, the payments to vaccine companies are contingent on the success of their vaccine, as is the case in most of the recent government deals to procure coronavirus vaccines. There are also instances when the investments are not subject to the clinical success of the vaccine, so if a vaccine does not get regulatory approval, both the sponsor and the drugmaker lose money.

Several countries and organisations, such as the United States and Geneva-based Gavi vaccine alliance, are investing in the so-called at-risk manufacturing of COVID-19 vaccines, which means they are funding vaccine makers to start mass-producing vaccines while they are still being evaluated in clinical trials.

“If we don’t undertake ‘at risk manufacturing,’ then when the vaccine is successful in clinical trials, there will be a long delay (estimated to be almost a year) from the time of that clinical success to the scaling-up of production,” a Gavi spokesperson said. Vaccine development and manufacturing typically occur sequentially, and it can take an average of seven to 20 years for a vaccine to be developed and scaled up for widespread use. Gavi expects upfront payments to help compress the COVID-19 vaccine development time frame to 12-18 months by securing raw materials and kick-starting manufacturing scale-up and vaccine production during development.

The US is by far the most aggressive when it comes to scoring deals for coronavirus vaccines. The country, the worst hit by the pandemic, has committed nearly $10 billion to procure at least 700 million doses of vaccines. That sum includes $1.2 billion earmarked for at least 300 million doses from AstraZeneca, $1.5 billion for 100 million doses of Moderna’s mRNA-1273 vaccine, $1.9 billion for 100 million doses from Pfizer and German startup BioNTech, $2.1 billion for 100 million doses from Sanofi and GlaxoSmithKline (GSK), as well as $1.6 billion to be spent on 100 million doses from Maryland biotechnology company Novavax.

Gavi has created the COVID-19 Vaccine Global Access (COVAX) facility to ensure fair global access to coronavirus vaccines. The facility would enter into advance-purchase agreements with pharmaceutical companies to secure vaccines. More than 150 countries — 75 of which would finance the vaccines from their own public finance budgets while the rest would be supported by donations — have signed up so far.

Less than half of the OECD countries have joined the facility and they don’t include the US, Germany, or France. The WHO-backed facility has struck a deal to procure 300 million doses from AstraZeneca. It is also providing upfront capital to India’s Serum Institute, the world’s largest vaccine maker by volume, to accelerate the manufacture and delivery of up to 100 million doses.