Axmed raises $2 million to transform access to critical medicines in low and middle income countries

For too long, low- and middle-income countries (LMICs) have borne the brunt of global health disparities— accounting for over 80% of the world’s population and more than 90% of its disease burden—yet representing a mere 6% of global pharmaceutical revenue. Equitable access to high quality affordable medicines remains a daunting task, and addressing this challenge has never been more critical. Axmed, an innovative two-sided B2B marketplace platform, is taking a bold and meaningful step forward in addressing this disparity with the announcement of a $2 million seed funding round. This investment aims to accelerate the affordability, availability, and distribution of essential and innovative medicines in underserved regions.

The fresh investment was led by Founderful Ventures and complements an earlier $5 million in grant funding from the Bill and Melinda Gates Foundation, bringing total funds raised to $7 million. These funds will bolster Axmed’s expansion, enhancing its engineering and commercial teams and advancing its technology infrastructure to initiate operations in strategically selected markets within Africa and the Caribbean.

Axmed’s B2B marketplace optimises the procurement process for healthcare providers in emerging and growth markets, catering to public, third sector, and private entities. The platform aggregates demand for both off- patent and patented medicines, creating larger, more cost-effective order volumes for manufacturers while simultaneously enhancing buyer leverage on cost and availability. The platform further streamlines the process by curating and consolidating Requests for Proposals and efficiently mapping out supply logistics. This approach creates a win-win outcome: it lowers the barriers to accessing costly medicines for patients and providers, while enabling manufacturers to expand their footprint in underserved markets.

Axmed’s founding team brings together a wealth of expertise and dedication, with over 30 years of collective experience in healthcare, finance, and public-private partnerships. CEO Emmanuel Akpakwu, previously Chief Commercial Officer for Novartis AG’s Sub-Saharan Africa operations, is joined by Felix Ohnmacht and Sofia Radley-Searle, who have held key positions at Novartis and GSK, respectively. Their united vision is to tackle healthcare inequity head-on.

Emmanuel Akpakwu, CEO of Axmed commented: “We are not merely developing a medicines platform; we are creating a bold new vision for the future of medicine accessibility. This vision not only empowers buyers but also unlocks the full potential of growth markets, allowing suppliers to compete effectively.”

This seed round propels Axmed into its next phase of strategic expansion, driving significant advancements in building out the engineering and business development teams, whilst preparing the platform for launch. Through targeted deployment of funds, Axmed will enhance its marketplace technology and forge alliances with key healthcare stakeholders to ensure a reliable supply of critical medicines.

“We’re delighted to back this outstanding team,” added Lukas Weder, Founding Partner at Founderful. “The team’s commitment and enthusiasm for addressing this important challenge is inspiring. We have every confidence in their ability to reshape the $140 billion LMIC pharma market, improving access to medicines for over 6 billion individuals. ”

Axmed’s mission extends beyond technology; it’s about forging critical partnerships and ensuring a steady flow of crucial medicines to those in need. Despite LMICs’ small share of the global pharmaceutical market, they represent a burgeoning $140 billion sector, with Africa alone accounting for over $43 billion in pharmaceutical opportunity. The urgency for accessible and affordable healthcare solutions has never been more evident, especially in the wake of the COVID-19 pandemic, which highlighted the need for a coordinated and sustainable medicines marketplace tailored to LMICs.

“Industry leaders and healthcare providers are aligned in their support for Axmed’s model, recognizing its potential to significantly enhance medicine accessibility in Low and Middle-Income Countries. “Axmed’s approach could fundamentally change how patients obtain treatments,” remarked Roselyne Opel, Head of the Organisation of Eastern Caribbean States Pooled Procurement Initiative (OECS PPI). “We look forward to seeing their platform reshape access, empowering buyers and strengthening supply of lifesaving therapies to a broader patient base.”

James Nyamongo, CEO of the Nairobi Hospital, Kenya added: “Axmed’s approach not only empowers us to gain access to life-saving medicines affordably, it also fosters real competition that raises the quality bar, bringing the highest quality local and global manufacturers to our doorstep”.

As the deadline for the UN Sustainable Development Goals approaches, Emmanuel Akpakwu reaffirms Axmed’s commitment: “We are driven by the belief that radical solutions are necessary to build on the progress being made across the various facets of global health. Axmed represents such a solution, and we are eager to make a positive, lasting impact on the world.”

Thibaud Lefort, Head of Operations for Sanofi’s Global Health Unit, added: “Axmed’s model presents a powerful opportunity to deliver much needed positive change across global health. We are eager to see their platform transform the access landscape, improving supplier-ability to reach more patients with lifesaving therapies, especially in underserved environments”

About Axmed

Axmed is an innovative healthcare venture focused on transforming access to medicines across low- and middle-income countries (LMICs). Through its robust digital platform, Axmed operates a two-sided B2B marketplace that bridges the gap between pharmaceutical manufacturers/suppliers and healthcare providers, ensuring a steady, affordable supply of critical medicines. By leveraging technology, strategic partnerships, and a deep understanding of the unique challenges faced by LMICs, Axmed is committed to fostering sustainable health outcomes and accelerating global health equity.

About Founderful

Founderful is Switzerland’s leading pre-seed fund. We give every founder our deepest understanding and highest levels of support, and together, we’re building the future of the Swiss startup ecosystem.

Contact Details

Axmed

Bilal Mahmood

+44 7714 007257

b.mahmood@stockwoodstrategy.com

Company Website

https://www.axmed.com/

Axmed Awarded $5 Million

Grant funding from the Bill & Melinda Gates Foundation targets improving access to essential medicines for the Maternal, Newborn, and Child Health (MNCH) Population starting in Sub-Saharan Africa

[Cambridge, MA, USA | Basel , Switzerland, 1st November 2023]

AxmedRx, a Public Benefit Corporation actively engaged in delivering global healthcare solutions, is proud to announce the receipt of a USD 5 million grant from the Bill & Melinda Gates Foundation. The funds will be dedicated to the strategic deployment and expansion of AxmedRx’s innovative two-sided medicines marketplace, with a specific focus on accelerating access to vital treatments for the MNCH population starting in sub-Saharan Africa.

“The grant marks a transformative era in AxmedRx’s approach to tackling the stark healthcare disparities in underserved populations. It’s more than financial support — it’s an affirmation of trust in our mission, vision, and capacity for significant impact,” expressed Emmanuel Akpakwu, CEO of AxmedRx. “With these resources, we’re poised to spearhead meaningful change, prioritizing the health of mothers and newborns who are often the most vulnerable.”

Dr. Patrice Matchaba, a member of the AxmedRx Advisory Board, highlighted the urgency of the initiative, saying, “This collaboration is a bold step toward global health equity. The COVID pandemic has unfortunately contributed to a reversal of previous gains in maternal and newborn health in developing countries. We must act now to prevent further loss of lives during pregnancy and childbirth from preventable and treatable causes.”

The grant will empower AxmedRx to expand healthcare access by fostering strategic alliances with key players in the industry, including healthcare stakeholders, governmental representatives, and pharmaceutical companies. Envisioned outcomes include strengthening procurement capability for buyers, fortifying healthcare systems, and establishing a coalition of logistics players capable of safe, secure, and transparent delivery of medicines to the final mile.

“Our strategy is grounded in actionable plans, local collaboration, and an in-depth understanding of the distinct health challenges each region faces,” stated Chief Operating Officer Sofia Radley-Searle. “This grant empowers us to deploy our resources and creativity to initiate a health revolution that will resonate across communities.”

Felix Ohnmacht, Chief Commercial Officer, emphasized the project’s alignment with AxmedRx’s long-term vision: “We’re on a humanitarian quest, not just a commercial one. We’re committed to building sustainable, robust health systems. Our commercial endeavors are intertwined with our commitment to effecting real change.”

“Our initiative embodies hope and actionable change. Together, we are creating a world where essential healthcare is accessible, regardless of geographical location or economic status,” Emmanuel Akpakwu concluded.

AxmedRx is appreciative of the Bill & Melinda Gates Foundation’s support, and invites the participation of media partners, global health proponents, healthcare providers, and pharmaceutical partners in this transformative endeavor.

For more information, interview requests, or media inquiries, please contact: info@axmedrx.com

About AxmedRx: AxmedRx is an innovative healthcare venture focused on revolutionizing access to essential medications in low- and middle-income countries (LMICs). Through its robust digital platform, AxmedRx operates a two-sided marketplace that bridges the gap between pharmaceutical suppliers and healthcare providers, ensuring a steady, affordable supply of critical medicines. With a starting emphasis on maternal, newborn, and child health (MNCH), AxmedRx not only strives to mitigate the prevalent healthcare disparities in LMICs but also aims to fortify the medical supply chain, making healthcare more accessible, efficient, and cost-effective. By leveraging technology, strategic partnerships, and a deep understanding of the unique challenges faced by LMICs, AxmedRx is committed to fostering sustainable health outcomes and accelerating global health equity.

Pooled procurement of drugs in low- and middle- income countries can lower prices and improve access

Patients in the developing world often face prices for essential medicines far in excess of international reference levels, even if those drugs have lost patent protection. This column presents evidence from seven low- and middle-income countries with diverse drug procurement systems to assess the effect of centralised procurement on drug prices. The results of the study highlight that centralised procurement of drugs by the public sector leads to lower prices, but that the induced price reduction is smaller when the supply side is more concentrated.

Across low- and middle-income countries, the prices of essential medicines, such as cancer treatments, HIV antiretrovirals, and antibiotics, display substantial variations, with the locally observed prices sometimes being many times higher than the lowest international reference level for generic equivalents. Chalkidou et al. (2020) show that some purchasers in low- and middle-income countries pay up to 30 times the minimum international reference price for basic generic medicines, such as paracetamol, insulin, and omeprazole. High prices, in turn, deplete already-limited public health budgets and generate shortfalls in access, especially for the poorest and neediest members of society.

Existing economic research has addressed the issue of affordable access to drugs in developing countries mostly from a patent protection angle. Several authors have analysed the trade-off between the potential costs of restrictive patent policies (due to the higher prices resulting from monopolistic pricing policies) and the potential benefits related to the faster diffusion of new drugs to markets enjoying stronger patent protection (Chaudhuri et al. 2006, Kyle and Qian 2014, Cockburn et al. 2016).

However, most spending on health products in these countries goes to off-patent branded generics, for which patents cannot explain the large markups being charged. Instead, important potential sources of friction in local drug markets are likely to involve suppliers\’ market power and buyers\’ size, as well as the type of procurement mechanisms used by public buyers. Understanding price variations and formulating policy recommendations for better and cheaper access to drugs in developing countries requires analysing the market structure for drug procurement.

In a new paper (Dubois et al. forthcoming), we analyse the impact of procurement mechanisms and supply-side concentration on drug purchase prices in low- and middle-income countries. These countries use a variety of procurement mechanisms including centralised public procurement with or without central medical stores, decentralised public procurement, and private procurement. One key mechanism that has been used to attempt to reduce unit purchase prices (which impact we test in this paper) is ‘pooled procurement’, whereby several buyers – either institutions in a single country or health agencies across countries – consolidate their purchases.

First, we develop a model in which several firms offer differentiated products through a procurement process that can be either centralised or decentralised. We assume that public buyers are price-takers when buying in a decentralised manner (an appropriate assumption in the context of drug procurement in low- and middle-income countries), but become non-price-takers when procurement is centralised (i.e. when they are able to get together to bargain with suppliers). Under fairly general assumptions, we show that prices under centralised procurement are lower than prices under decentralised procurement.

We then use data from seven low- and middle-income countries with diverse drug procurement systems to evaluate empirically which procurement mechanisms allow countries to access drugs at lower prices. Specifically, we use data from IMS Health (IQVIA) that exhaustively cover the sales quantities and expenditures of drugs for 40 essential molecules across 16 therapeutic areas at a finely disaggregated level (by year and sector of purchase during the period 2015-2017). Previous studies relied on limited sets of drugs with specific characteristics, mostly those targeting infectious diseases such as HIV/AIDS, tuberculosis and Malaria – diseases which are at the centre of attention for global health advocates and dedicated international organisations. This narrow scope limits the external validity of their findings. Instead, we consider a much larger variety of drug classes, also including, for example, antibiotics, antihypertensives, and contraceptives. Generic availability is the case for 33 out of these 40 molecules (over 95% of the observations in our sample).

The countries included in our analysis are India (in particular, Kerala), the Philippines, Senegal, Serbia, South Africa (a subset of three States: KwaZulu-Natal, North West, and Eastern Cape), Tunisia, and Zambia. There is rich variation in terms of the way drugs are procured, both across and within these countries. For three of the countries in our sample (the Philippines, Serbia, and South Africa), the channels of drug procurement even vary within specific therapeutic areas. For example, specific HIV antiretrovirals are purchased centrally, while others are purchased in a decentralised manner. We also observe different purchase mechanisms being used simultaneously within molecules. This is seen mostly in public and private procurement, but also in public centralised and decentralised procurement, in some cases.

Our empirical strategy relies on exploiting this within-molecule country-year variation. The identification is possible because, for a subset of molecules in some countries, purchases are made simultaneously through the different channels (public centralised, public decentralised, and private). There might also be within-molecule country-year differences in prices at the product-level, because there are often several manufacturers offering different brands of the same generic molecule. This could drive differences in prices through quality or if centralised procurement was targeting specific and cheaper formulations. We address these concerns by adding product fixed effects. Finally, we use a selection correlation procedure to address the concern that there might be a systematic bias in the choice of procurement mechanisms and, in particular, of which molecules are procured centrally.

In addition, the concentration of suppliers also varies substantially across countries and therapeutic areas, from single seller situations to highly competitive environments. We estimate the role of suppliers’ concentration by interacting the purchase mechanisms with within-therapeutic areas’ ‘Herfindahl-Hirschman Indexes’, which we instrument following classic methods in the industrial organisation research.

Consistent with the model’s predictions, our main finding is that centralised procurement of drugs allows the public sector to obtain much lower prices. In our most stringent specification, with product fixed effects and selection correction, we find that centralised public procurement commands a 15% price reduction on average. However, we also find that the reduction is smaller when the supply side is more concentrated. At the extreme, instrumenting the supply side concentration, we show that the price difference vanishes when public buyers face a supplier market with an Herfindahl-Hirschman Index value above 46% (which is approximately the 80th percentile of the distribution).

The price reductions found in this paper may be driven by two complementary mechanisms. First, demand-side concentration may enhance public buyers\’ bargaining power, allowing them to extract lower prices (all else being equal). In addition, centralised procurers are likely to buy larger quantities, securing price discounts on larger orders in doing so. These two channels are hard to disentangle, as they occur simultaneously. Further research is needed to identify the nature of market interactions between buyers and sellers and to separate their effect from that of transaction size.

Finally, our results have important policy implications regarding supply-side concentration. Indeed, simple reduced-form estimations of the impact of increasing supply-side competition show large potential increases in the quantity of drugs that public sectors could purchase for a given budget.

References
Chaudhuri, S, P K Goldberg and P Jia (2006), “The Effects of Global Patent Protection in Estimating Pharmaceuticals: A Case Study of Quinolones in India”, American Economic Review 96: 1477-1514.

Chalkidou, K, J M Keller, M Over and A Jones (2020), “Can Better Procurement be the Key to Financing UHC? Potential Savings from Health Sector Procurement Reforms in Low- and Middle-Income Countries”, CGD Policy Paper 192, Washington DC.

Cockburn, B I M, J O Lanjouw and M Schankerman (2016), “Patents and the Global Diffusion of New Drugs”, American Economic Review 106 (1): 136-164.

Dubois, P, Y Lefouili and S Straub (forthcoming), “Pooled Procurement of Drugs in Low and Middle Income Countries”, European Economic Review.

Kyle, M and Y Qian (2014), “Intellectual Property Rights and Access to Innovation: Evidence from TRIPS”, working paper.

Index finds more pharma companies moving to address access to medicine. Will they now go further?

The 2022 Access to Medicine Index finds that since the COVID-19 pandemic hit, more pharmaceutical companies have stepped up to make some of their products more widely accessible in low- and middle-income countries (LMICs). If the pandemic is to be a turning point in the fight for equitable access to medicine, companies must now scale their efforts to cover more products in their portfolios, and in a greater number of countries.