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Epidiolex-GW

GW Pharma’s Enormous Price for Epidiolex

By Marguerite Arnold
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Epidiolex-GW

In a fascinating early August conference call with Seeking Alpha, British-based GW Pharmaceuticals finally revealed their retail price point for CBD-based drug, Epidiolex, as it goes into distribution in the U.S.

The drug is designed for the treatment of certain kinds of childhood epilepsy – although not all kinds. Also notable of course, is that GW Pharma’s “other” drug for treatment of resistant epilepsy failed in late stage trials in Eastern Europe earlier this year. It also knocked off 5% of the price of the company’s stock.The company is estimating it has a potential patient pool of between 25,000- 30,000 patients in the U.S.

British Advocacy Over Access And Pricing

The ineffectiveness of GW Pharma’s drugs for many patients (along with the cost charged for them) was responsible for pre-empting the entire access discussion in the UK this year. The mother of an epileptic British child tried to import a personal store of cannabis oil (produced by Canadian LP Tilray) only to have it confiscated at the airport this summer. Her son ended up in the hospital shortly thereafter.

The national uproar this caused pushed forward the country’s new medical cannabis policy– indeed drug rescheduling is due to go into effect in October. Conveniently, right as Epidiolex goes on sale in the U.S. (where cannabis remains a Schedule I drug).

The company is estimating it has a potential patient pool of between 25,000- 30,000 patients in the U.S.

Price Tags and Politics

What is the price of Epidiolex? $32,500 per patient, per year. If that sounds high, the company insists it is pricing the drug to be “in line” with other drugs for this segment of the market.

The majority of this cost will not be picked up by private health insurers but rather the federal governmentActually, according to industry analysis, this is about 70% more than the price of one comparable drug (Onfi), and slightly more expensive than Banzel, the two competing (non-cannabinoid based) medications now available in the U.S. for this market.

Here is the other (widely unreported) kicker. The majority of this cost will not be picked up by private health insurers but rather the federal government, which is also not negotiating with GW Pharma about that high price  (unlike for example what is going on in Europe and the German bid).

Why the difference?

Two reasons. The first is that Epidiolex has obtained “orphan drug” status (a medication for a disease that affects fewer than 200,000 patients in the U.S.) The second is that the majority of the insurance that will be picking up this tab is Medicaid. The patient pool will be unable to afford this. As a result, the bulk of the money will remit not from private insurance companies but rather federal taxpayers. And, unlike in say, Germany, none of this is pre-negotiated in bulk.

Epidiolex-GW
What is the price of Epidiolex? $32,500 per patient, per year.

Co-payments are expected to range from $5 to $200 per month per patient after insurance (read: the government) picks up the tab. This essentially means that the company plans to base participation at first at least on a sliding scale, highly subsidized by a government that has yet to reschedule cannabis from a Schedule I in the U.S.

Creating, in other words, a new monopoly position for GW Pharmaceuticals in North America.

A Hypocrisy Both Patients And The Industry Should Fight

The sordid, underhanded politicking that has created this canna monster is hardly surprising given the current political environment in both the U.S. and the U.K. right now. The people who benefit the most from this development are not patients, or even everyday shareholders, not to mention the burgeoning legitimate North American cannabis industry, but in fact highly placed politicians (like British Prime Minister Theresa May). Philip May, the PM’s husband’s firm is the majority shareholder in GW Pharma. Her former drugs minister (with a strong stand against medical cannabis) is married to the managing director of British Sugar, the company that grows GW Pharma’s cannabis stock domestically.

So far, despite a domestic outcry over this in the UK (including rescheduling), there has been no political backlash in the United States over this announcement. Why not?

Look To Europe For A More Competitive Medical Market

This kind of pricing strategy is also a complete no go in just about every other market – including medical-only markets where GW Pharma already has a footprint.

For example, German health insurers are already complaining about this kind of pricing strategy for cannabis (see the Cannabis Report from one of the country’s largest insurers TK – out earlier this year). And this in an environment where the government, in fact, does negotiate a bulk rate for most of the drugs in the market. Currently most German cannabis patients are being given dronabinol, a synthetic form of THC which costs far less.

GW logo-2On top of this, there are also moves afoot by the German government to begin to bring the costs of medical cannabis and medicines down, dramatically. And this too will impact the market – not only in Europe, but hopefully spark a debate in every country where prices are also too high.

The currently pending German cultivation bid for medical cannabis has already set an informal “reference” price of at most 7 euros a gram (and probably will see bid competitors come in at under half that). In other words, the government wholesale price of raw, unprocessed cannabis flower if not lightly processed cannabis oil is expected to be somewhere in the neighbourhood of 3-4 euros per gram come early next year. If not, as some expect, potentially even lower than that.

Processed Cannabis Medicine vs. Whole Plant Treatment

The debate that is really raging, beyond pricing, is whether unprocessed cannabis and cannabis oil is actually “medicine.” At the moment, the status quo in the U.S. is that it is not.

GW Pharmaceuticals, in other words, a British company importing a CBD-based derivative, is the only real “medical cannabis” company in the country, per the FDA. Everyone else, at least according to this logic, is placed in the “recreational camp.” And further, hampered still, with a lack of rescheduling, that affects everyone.

If that is not an organizing issue for the American cannabis industry, still struggling with the many issues inherent in the status quo (from insurance coverage and banking to national distribution across state lines) leading up to the midterms, nothing will be.

Dr. Richard Kaufman
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Replacing Opiates with Cannabis is Finally Becoming a Reality: Where do we go from Here?

By Dr. Richard Kaufman
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Dr. Richard Kaufman

Opiate abuse is a far-reaching international public health issue, impacting tens of thousands of people every year in the United States alone. As the epidemic continues to spread, the medical community is faced with the immense task of researching and developing safer, non-addictive treatment alternatives for patients of chronic pain and other ailments. The controversial and oft-debated notion of cannabis as an opiate alternative has become increasingly well-researched and gained considerable credibility in recent years. The new challenge lies in advancing the cannabis industry to the point of being a legitimate medicine that can be prescribed and administered by doctors.

Opioids are among the most commonly prescribed medical treatments for severe chronic pain, yet prescription opioid overdoses killed more than 165,000 Americans between 1999 and 2014 according to the Department of Health and Human Services. In fact, the health and social costs of opioids are estimated to be as much as $55 billion a year. As such, it has become more imperative than ever that mainstream medical practitioners take notice of the cannabis plant’s powerful healing properties and shift away from potentially harmful pharmaceutical medications.

Dr. Richard Kaufman
Dr. Richard Kaufman, co-founder and chief science officer of Nanosphere Health Sciences.

The evidence of cannabis’ safety and efficacy is well established. For instance, in a literature review of 38 studies evaluating medical cannabis’ efficacy for treating pain, 71 percent concluded that cannabinoids had empirically demonstrable and statistically significant pain-relieving effects. In addition, a 2015 meta-analysis of 79 studies found a 30 percent or greater reduction of pain with the use of cannabinoids compared to placebos. Further, an analysis of a decade of randomized, double-blind placebo-controlled clinical trials on cannabis for treating pain concluded that cannabis should be a first line treatment for patients with painful neuropathy and other serious and debilitating symptoms, who often do not respond to other available medications.

Not only is cannabis demonstrably safe and effective, but numerous studies also present compelling evidence that the prescription of opiates has dropped sharply in U.S. states and countries that have legalized medical cannabis. For example, a study in the Clinical Journal of Pain followed 176 chronic pain patients in Israel over seven months. Researchers found that 44 percent of participants stopped taking prescription opioids within seven months after starting medical cannabis. Patients cited the following reasons for using cannabis instead of pharmaceutical drugs: 65 percent reported less adverse side effects, 57 percent cited better symptom management and 34 percent found that cannabis had less withdrawal potential than their other medications.The evidence of cannabis’ safety and efficacy is well established.

The tide is quickly turning as many respected doctors are beginning to advocate for the tremendous medical potential of cannabis as a replacement for prescription pills. That said, if the cannabis industry is to help solve the crisis inflicted by modern pharmaceutical painkillers, we must develop next-generation scientifically formulated products and advocate to improve their accessibility.

Inhalation and oral methods of cannabis consumption have no reliable dosage as medicine, rendering them unfit for administration by health professionals. These mainstream consumption methods also have extremely low bioavailability and bioactivity. Bioavailability for ingested cannabis products is only 6 percent and for inhalation methods can be as low as 2 percent. Oral absorption of THC is slow and unpredictable, with peak blood concentration occurring 1–5 hours post dose. Similarly, inhalation methods can take up to two hours to have any effect. The next phase of the medical cannabis industry must focus on fixing problems that prevent cannabis from being a universally recognized health tool. Fortunately, scientists are making major advancements in cannabis delivery technologies, offering novel and innovative administration methods that have proven both effective and reliable.

With products like Evolve’s NanoSerum™ representing a promising solution to help reduce the morbidity and mortality associated with prescription opioid use and abuse, meaningful progress is already underway. It’s been a long and challenging road to arrive at this point, but our efforts are only just beginning. Achieving long-term change on a national and international scale will require professionals from all levels of the cannabis, science and medical communities to push for advanced product offerings that provide consistent, standardized dosing in healthier, smokeless modes of delivery.

PA flag

Pennsylvania Adjusts Medical Cannabis Program

By Aaron G. Biros
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PA flag

On Monday, Pennsylvania Health Secretary Dr. Rachel Levine announced plans to allow patients access to whole plant, dried flower, as well as more qualifying conditions. The move reverses the previous rule permitting dispensaries to sell only processed forms of cannabis, which some say limited access and kept costs high for patients.

According to the Marijuana Policy Project (MPP), the Department of Health approved changes to the program at a hearing on Monday, which were recommended by the Advisory Board last week. While smoking remains theoretically prohibited, patients can now access the flower for vaporization.

The medical cannabis program in Pennsylvania has only been functional for a few months now; patients began getting access to the drug back in February of 2018. In a press release, MPP says only a small number of cultivators and dispensaries are currently operating. This fact, coupled with the need to purchase processed forms of cannabis, has created product shortages and costly medicine for patients.

It is expected that this move could help alleviate some of those problems in the state’s new program. “Allowing cannabis in its natural, flower form and expanding the list of qualifying conditions will have a huge positive impact on seriously ill Pennsylvanians,” says Becky Dansky, legislative counsel for the Marijuana Policy Project, who helped lead the legalization effort in Pennsylvania’s legislature. “By being able to provide medical marijuana in plant form, producers will be able to get medicine into the hands of patients much more quickly and for much lower cost to patients,” says Dansky. “This is vitally important for patient access right now while the program is still getting off the ground and production is not yet at full capacity. We hope these rules are promulgated as quickly as possible so even more patients will be able to find relief.”

The qualifying conditions added to the list for patients seeking medical cannabis is set to include cancer remission therapy as well as opioid-addiction therapy, which are two very notable additions. With more qualifying conditions and a potentially cheaper form of medicine, these changes could improve the program’s efficacy in treating patients.

currencies around the world

The Global Price of Cannabis

By Marguerite Arnold
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currencies around the world

Cannabis pricing, globally, is a topic that is going to remain heated if not highly fluid for some time to come. Why? Government regulation (or lack thereof), compliance and even transport along with different models for commerce and consumption are creating an odd and absolutely uneven map of commodity pricing. We live in a world where accurate information is hard to come by. Even from ostensibly “official” sources that track operational markets. Black or legit.

It may sound complex today but it used to be a lot harder. As of just 2014, the UN’s Office of Drug Control listed the price of a gram of (black market) cannabis in Lichtenstein at $1,020 (as reported by a bemused Business Insider). While this could have been a simple matter of misunderstanding that Europeans frequently use commas rather than periods as decimal points in numbers, the fact that this was later corrected to $10.13 suggests human error in transcription rather than reporting. And the world has certainly changed since then.

Yet with no international legal marketplace or even platform yet in existence to track the global price of legal cannabis in different jurisdictions, this is the kind of issue that faces not only those in the industry but those trying to analyze it.

That said, there are beginning to be data points for those who are interested and those who must have this information for professional reasons. Here is a break-down of regional (legal) prices, per gram from a selection of sources generally considered fairly accurate. This is also made a bit more difficult by the difference in measurement systems and currency fluctuations. For ease of reference, these figures are in grams and U.S. dollars. An ounce is about 28 grams.currencies around the world

Medical grade cannabis also means different things in different markets. Outside the U.S., in Canada and the EU in particular, medical grade cannabis must meet a certification process that adds to the cost of production considerably. Certainly in comparison with outdoor grows. It is still, for the most part, imported, from either Canada or Holland, although look for that to start changing this year as domestic cultivation in multiple countries finally gets seriously underway.

The U.S.

Pricing really depends on where you are. It is also dropping fairly dramatically in established markets. The most recent example of this is Oregon – which has seen its higher-than-normal state retail market begin to normalize with California, Washington and Colorado. This is the price of establishing regulatory schemes on a non-federal level. That said, the competition is so extreme at the moment that Oregon, in particular, is a buyer’s market, with recently reported prices as low as $1 and change for a gram.

Retail pricing, in particular, will remain all over the place on a national level, especially given the amount of local competition between dispensaries underway. On average, however, medical grade-ish cannabis runs between $6-30 a gram, retail.

According to the website Cannabis Benchmarks, which tracks U.S. wholesale prices, the domestic spot index of wholesale cannabis was at $1,292 per pound at the end of January. Or about $5 per gram.The theory that the legit market has to price the black market out of existence is unpopular with those who want to collect more taxes from rec sales.

Nationally, at the moment, uncertainty over how the new post-Cole Memo world will play out, plus oversupply in certain markets, is creating strange pricing. Note to consumers, particularly in recreational markets: There are deals to be had.

Canada

This market is interesting for several reasons. The first is that several of the regional governments are considering establishing a Canadian $10 per gram price for the recreational market. Medical grade runs about $8 at the moment in local currency. That means, with a 20% differential in current f/x rates, a recreational gram will be set at USD $8 and a medical gram at about $6. That said, the theory that the legit market has to price the black market out of existence is unpopular with those who want to collect more taxes from rec sales.

Theories abound about the future of recreational pricing, but for the moment, a great deal of supply and new producers will keep prices low at least through 2019. After that? It is impossible to even guess. At that point, Canadian producers will still be supplying at least German medical patients with some of their imported bud. Regardless, the country will continue to play an important role in global pricing – even if it is to set a recreational and medical standard that plays out in markets already from the EU to Australia.

Israel

Like Canada’s market, although for different reasons, the Israeli official price on legal cannabis is absolutely constant. It is set by government policy. Those who have the drug legally, in other words with a doctor’s prescription, pay about $100 for a month’s supply. That amount on average is about 28 grams. That means that a medical gram in Israel will set you back about $3.50 per. U.S. not Canadian.

Europe

Price deltas here are the most impacted by changing national laws, standards and medical legalization. There are only two semi-legitimate recreational markets at the moment that include THC. Those are Holland and Spain. In Holland, via the coffee shops, the low-end of passable bud starts at between $12-15 per gram and goes up to about $30 for the really exotic breeds. This being Holland, they exist and are obtainable. In Spain, add the cost of joining a social club (about $50), but in general, the cost of a gram is about $10.Price deltas here are the most impacted by changing national laws, standards and medical legalization.

Medical markets in places like Germany are still skewed by integration of the drug into the country’s healthcare system and the fact that it is still all imported. The horror stories are real here. Patients must pay out-of-pocket right now for cannabis flower that is also being pre-ground by local apothekes for an additional price per gram that is eye-wincingly high. However, once the price and supply normalize, look for a medical standard here of about $10 for a month’s supply. That will be about 28 grams too.

Germany, in other words, will eventually be one of the cheapest markets for patients after reimbursement by insurance. That shapes up to be about $0.50 per gram at point of sale. It could be far less for those who are able to obtain authorization for higher amounts up to five ounces per month. The flat fee stays the same. Do the math. That works out to some pretty cheap (high grade) medical relief.

Black market cannabis and hash, which is also far more common in Europe than the U.S. at least, is fairly widely available for between $12 and $20 a gram.

The rise of cannabis production in Eastern Europe and the Baltics (which is also still largely pending and based on ongoing government talks and emerging distribution and cultivation agreements) will also dramatically drive down the cost of legal cannabis in the EU within the next several years. Production in this part of the world, along with Greece, may well also source rec markets all over the continent once that happens.

Africa & Central and South America

While the African cannabis trade has yet to break out – even in the media much of yet, there is definitely something green growing in several African countries including South Africa and Ethiopia. That trade unlike most of what is going on in South America with the possible exception of Uruguay is already looking for export opportunities globally. With African cannabis going for less than a buck a gram in most places (as in about a fifth of even that), look for certified African medical cannabis in select Western markets where price is going to be a major issue. Think medical standards. On the South American front, prices are equally low. However, remember that these are not regulated markets yet. And domestic government standards, starting with GMP and both indoor and outdoor grow requirements are basically non-existent. Growers who want to export to higher regulated markets are planning accordingly.

Assorted Outliers

It goes without saying that in places where cannabis is both illegal and carries the death penalty or other harsh penal retaliation, that the price is not only much higher, but the source is black market. In the UAE for example, a gram will set you back well over $100.

Soapbox

Digitalization Begins To Innovate Insurance Industry: What Does That Mean For Cannabis?

By Marguerite Arnold
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Munich, Germany- In a darkened movie studio on the east end of town, the Digital Insurance Agenda or DIA, the largest insurtech conference in the world, kicked off its annual event in mid-November. The sold-out event attracted about 1,000 top insurance executives from 40 countries and all six continents.

CannabisIndustryJournal attended from the perspective of investigating the overall status of digitalization in the industry. However, there were a couple of things we were on the hunt for. The first was to see how and where blockchain has begun to penetrate the industry. This revolutionary processing and identification layer of digital communications is coming – and fast – to the insurance industry everywhere.

All image credits: MedPayRx (Instagram)

We were also there of course to see if cannabis was anywhere on the agenda. Digitized or not.

By way of disclosure, I am also a high tech entrepreneur with my own insurtech, blockchain-based start-up that we are in the process of launching. MedPayRx is intended to be the first insurance product that will help patients access their meds facing nothing but their co-pay and help insurers automate the approvals process for all prescription drugs and medical devices.

By definition, in Germany, this includes medical cannabis.

Ultimately, our mission is to take the paper and the pain of all reimbursement out of the prescription process. At present, as anyone with a chronic condition knows, many medications and medical devices must be paid for out of pocket first and then reimbursed via a claims process that is paper-based, laborious and expensive. This is not a model that works for anyone. Certainly not poor and chronically ill patients who face this process at least monthly. And certainly not insurers who are now facing higher drug costs if not more claims reimbursements for the same from an aging population.

In a country like Germany where 90% of the population is covered by public health insurance, the situation also poses quandaries of a kind that are rocking the fundamental concept of inclusive public healthcare.

The Impact of Digitalization On The Insurance Industry

As one insurance executive and speaker mentioned from the stage during DIA, there are few industries that are more universally despised than insurance in general. And few verticals where the existing mantra is “you cannot do it worse.” The insurance industry is well aware of that. Further, for all insurances that are not “mandatory” the competition is fierce for consumers’ bucks. Particularly in places like Europe where insurance is also seen as a kind of savings scheme.

If you are a private insurer, of any kind, or offering services to both end consumers and B2B services, you are out of the game if you are not now thinking how to streamline and upgrade all aspects of your business in the digital era. There are many start-ups now tackling what is euphemistically called “cloud2cloud” integrations.

What does that mean?

According to DIA co-founders Reggy de Feniks and Roger Peverelli, the influence of tech in general is here to stay and is now driving widespread innovation across the industry. “The DIA line-up and the massive response among the audience show that insurtech is now mainstream,” says de Feniks. “This edition clearly showed the…ever growing attention for artificial intelligence, machine learning and other shapes of advanced analytics.”

“Platform thinking, thinking beyond insurance and creating new insurtech enabled services will be the next challenge for insurers,” added Peverelli.

Subtext? Insurers want your data. They want to use tech to analyse and understand it. The technology is here. But is the regulation? Specifically, in an industry that wants to know everything about you, how is privacy understood and implemented with revolutionary tech?

A Cloud-Based Future

Paper is rapidly becoming an old-fashioned concept in insurance, much like it has in banking. And like banking, insurance has a strong “financial” side to it. Germans, for example, tend to use insurance policies as retirement accounts, (the idea of a 401K is almost unheard of here). And by far, the most dynamic and digitalized part of the industry tends to be in areas unrelated to healthcare.

Some of the most interesting start-ups at DIA were actually weather-based.

The challenges of these types of insurtechs of convincing both regulators and the industry that such services are not only feasible but needed, pale in comparison however, to the challenge now facing all public health insurers.

And while they were certainly present at DIA, this industry segment was underrepresented at the November gathering. There is a reason for this. The real threat to consumer medical privacy is only growing, not receding in an era where data can be seamlessly transferred globally and digitally.

For that reason, blockchain has many uses and applications in this part of the vertical.

MedPayRx – even as a pre-seed start-up, was not, even this year, the only blockchain-based service we found in attendance at DIA. Next year look for even more.

Blockchain might be the next new “buzzy” tech, but in the insurance industry, there is a real reason for it.

What Was The Response To A Cannabis-Themed “Insurtech?”

As readers in the United States know, health insurance and cannabis is a loaded subject. And while insurance services are beginning to be available as high-risk commercial services for the industry, inclusive health insurance is still off the table because of the lack of federal reform.

Other places, however, the issue is taking a fascinating turn. And in Germany, right now, the situation so far has shaped up to be cannabis vs. public health insurance. It is a mainstreaming trial drug in other words. For that reason, beyond any lingering but rapidly fading stigma, it is a fertile time to be in the middle of it, with a tech solution.

It is also perfect timing from the digitalization and privacy perspective. Unlike the U.S., Germany in particular has tended to keep its insurance services, certainly on the health front, undigitalized because of privacy concerns. That is no longer feasible from a cost perspective. It is also increasingly one that has to be dealt with from a tech and regulatory one.

Why Is CannabisIndustryJournal At DIA?

My nametag identifying me as both “media” and of a certain green source, was the source of endless discussion with everyone I talked to. Many attendees were extremely curious about why a cannabis industry publication was at an insurance conference. And most people, certainly the non-Germans in attendance, were unaware that per federal law, cannabis is now, at least in theory, covered by public health insurance here.

Medical insurance that treats cannabis just like “any other drug” is a discussion at the forefront of the medical community in Europe. Even if not at health insurance industry events like DIA. Yet. In the last year, in fact, Dutch insurers have started refusing to cover the drug as the German government moved forward on mandating coverage.

In other places, like Australia, Israel and Canada, the conversation is also proceeding, albeit slowly within the context of public health coverage.

However compliance and tracking of the drug itself, not to mention the need for research on how cannabis interacts with other drugs mandates a consideration of how digital health records, privacy and tracking can exist in the same conversation. And further, can be accessed by the insurance industry, the government and policy makers as reform moves into its 2.0 iteration – namely federal recognition of the drug as a legitimate medicine.

We at MedPayRx think we have one answer. And next year, we hope to present from the stage as we continue to move forward with engaging the insurance industry here on all such fronts. Not to mention helping move the conversation forward in other places. And of course, launching services.