A useful product may never be developed because its prospective users cannot credibly promise a market large enough to repay the investment. An advance market commitment brings a buyer or funder into the picture before the product or supply capacity is ready.
The commitment ties funding to qualifying supply under stated terms. In the pneumococcal vaccine AMC, donor funds supported manufacturer supply commitments alongside requirements for affordable long-term provision. The purchase commitment concerned supply and affordability as well as the existence of a qualifying vaccine.
A customer before the product
Imagine towns jointly committing to buy a low-maintenance water sensor if it meets an agreed performance and price threshold. Developers can now assess a more concrete prospect of revenue. The towns still need to define a useful test, maintain funding, and decide how qualifying suppliers share the opportunity.
A prize competition pays for selected achievement; an AMC connects payment to purchasing and supply. Commissioned R&D pays for development work itself. The distinction changes which risks remain with the inventor.
An AMC need not prohibit patents or pay inventors directly rather than manufacturers. Open access must be addressed in its terms if that is part of the purpose. Its distinctive contribution is reducing uncertainty about demand; technical failure, production costs, and competition can still prevent a return.