Medical cannabis market shows growing pains

The Czech Republic took a bold step back in 2013 when lawmakers agreed to legalise the sale of medicinal cannabis or marihuana. But the development of this market, which can conceivably challenge that of the established pharmaceutical companies across a wide range of pain killers and treatments, is showing some local and global growing pains.

Sean Carney, photo: archive of TilraySean Carney, photo: archive of Tilray One of those seeking to develop the market for medical cannabis in the Czech Republic and Europe is Prague-based Sean Carney, actually a former business journalist. He is now working as the director of business development and government for Europe for the Canadian cannabis company Tilray. It has a license to produce, process, and manufacture medicinal cannabis products from the Canadian federal government.

Tilray is seeking to get in there at the start and take off when the European market moves into overdrive.

I asked Sean how that market is now shaping up.

“The medical cannabis market now is globally undergoing a transformation because the stigma attached to cannabis that has prevailed for many years is now giving way to fact-based discussions. So governments around the world, especially in Europe, are now just trying to find ways of supplying appropriate medicines to local populations that are cost effective because health care costs are going through the roof everywhere and there are limited budgets. Cannabis can replace a lot of prescription drugs at a lower cost and also eliminate most of the serious side effects. And there is demand from patients… even a lot of politicians, regulators, health providers are very interested in this. The question is of course how to enable this in a way that conforms with all the international treaties. That is basically the trick.”

And in Canada is medicinal marihuana, cannabis, being used on a wide scale across all the states and is it being paid for by the state or the local health insurers, there’s no problem with that?

Cannabis can replace a lot of prescription drugs at a lower cost and also eliminate most of the serious side effects.

“It is available everywhere in Canada. And Canada, like Israel, these are the two leading countries where this sector is really moving forward with a lot of research and innovation. In both countries there is a lot of competition. In Canada, there are sales all over the country. Currently it is all paid for out of pocket by the patients but that is now a subject of debate between people in the government, health care providers, insurers, medical cannabis producers, as well as patients’ organisations and doctors’ groups. That is generally a discussion that is even taking place in Europe.

“In Germany right now the federal government is working on a plan right now to allow domestic cultivation of cannabis. According to the early draft, it is not approved yet, it calls for the health insurers to cover the cost of the medical cannabis in certain cases. Not for everyone, but in certain cases they would do it. In Canada, it has not happened yet but it is being discussed. Also in the Czech Republic when it’s available, and the information right now is that there is no cannabis available anywhere in the pharmacies right now…”

I just want to stop you there. In theory right now medical cannabis should be available in the Czech Republic, there was a law passed…

Photo: (Masáže Mawen)Photo: (Masáže Mawen) “Correct, correct, it should be. The issue is that in Europe there is only one provider based in the Netherlands called Bedrocan. They have been doing it for many years and have a lot of clients around Europe but they have limited capacity and so there is a bottleneck. In the Czech Republic, there have been a few importers importing it, but Bedrocan can only produce so much for the whole of Europe. So in the Czech Republic there is now a company called Elkoplast Slušovice which is producing it. It is actually people from the Netherlands that are providing the technology and are growing it for Elkoplast. Hopefully that will take some of the pressure off the local system but they are only growing one type of cannabis which is a high THC with very low CBD, which Cannabodial. That is very good for anti-inflammatory effects and is especially good for people with multiple sclerosis, And people here with ms in the Czech Republic are frustrated that a type of cannabis that would address their condition is not being cultivated.

“There is basically a lack of supply in Europe and what is being grown is very narrow in scope. There are only a few varieties and no insurers are covering it yet. The European model is very limited for now. We hope we will see more competition to encourage innovation and also only the competitive market will allow companies to fund clinical research which is really lacking.”

I will come to that in a minute, but as regards the current costs, okay there is a supply problem in Europe, but I also read that if you are buying it out of your own pocket the costs are quite high in Europe?

In Europe there are 100 percent mark-ups which put it out of reach of even affluent populations

“The wholesale costs in Europe are on a par with Canada and Israel. The problem is that in Europe the medicinal cannabis goes through the pharmaceutical distribution system. That means that it has to get bought by a wholesaler, then it has to get distributed by a licensed pharmaceutical distributor, and it has to be stored in certain facilities that are normally being used to store opiates, narcotics. Then it goes to the regular pharmacy where the pharmacist has a mark-up. In some cases, in Germany or Italy, the mark-up is 100 percent. So in several cases along the way in Europe there are 100 percent mark-ups which put it out of reach of even affluent populations. So in the Czech Republic, where the average per capita income is below the EU average, it is a big problem.”

Do you see any way that that problem could be addressed?

“One simple way to address it is to have health insurers cover the cost and then the problem is solved. If the medicinal cannabis is actually replacing more expensive prescription drugs, then the insurers will actually see some benefit. But to date there has been a lot of confusion about the issue, not actually the efficacy of the cannabis but the issue about the legislation about its use and covering it, if a company is putting itself in jeopardy by enabling it. So if the health insurers would actually step up to the plate, they would resolve this problem overnight.”

Photo: Břetislav TurečekPhoto: Břetislav Tureček You mentioned the research issue and there is, if understand right, quite a lot of research going into what the exact benefits of cannabinoids are. How much is there an actual obstacle to research? The fact that people are not sure, there are some signs it does this and that, but they are not sure of the actual basics?

“There has been a lot of research into cannabis, cannabinoids and medicines over the last two decades. There is actually a lot more than people realise. But there is one problem that regulators or medical communities in one country tend to trust research that comes out of that country rather than a foreign country where they do not know the parameters. So while three has been a lot of research, there needs to be a lot more in given jurisdictions that are interested in using this substance. And there is one issue if you use herbal cannabis, which in Europe is sometimes called cannabis for therapeutic uses, it is sometimes hard to pinpoint directly what is being tested. There are dozens and dozens of cannabinoids. Of course the most useful ones are THC and CBD, but in herbal cannabis it is difficult to know what is being consumed at what rate. That’s why the next step in the evolution of medicinal cannabis is the use of extract products and that is now happening in Canada. Our company, Tilray, has begun producing and developing extract products and these are great for researchers because they have very specific cannabinoid profiles, specific potency. The dosage is exact…”

You know what you are getting…

The next step in the evolution of medicinal cannabis is the use of extract products and that is now happening in Canada.

“You know what you are getting. The extract products could be in a capsule, could be in drops, spray or even in a suppository. This is the future for all research. For medical use, herbal cannabis will move into the sidelines and the extract products will move into the front and centre.”

And the market overall…this company Tilray is a serious company, it is a big money business. How do you see the market taking off? If this market develops properly will we see growth several fold in a few years with cannabis coming out of the sidelines and becoming a broadly used and acceptable drug?

“That is exactly our view of the situation. The question is how fast this transition will take place, the ramp up. The question is whether it will be in three years, five years, 10 years maybe? We are of the opinion that it will be sooner than later, simply because cannabis works and has a good safety profile. There are very few ill effects and negative effects are in a very small minority. We think that the potential use is very large. If you just look at the average number of people in populations suffering from chronic pain, it is huge. It is millions and millions of people. You can add all the conditions that are recognized for use just in the Czech Republic. It could really turn into a major part of the healthcare system especially with these extract products that I mentioned earlier because they have very specific dosage, they are very safe, and very effective. And this can really be the medicine of the future because it can be cultivated anywhere where it is legal, it can be processed, and the costs relative to pharmaceutical drugs is a lot more acceptable.”

And just the Czech Republic, at the end of last year there was news that a new institute was being created to look into the uses and development of medicinal cannabis. Is the Czech Republic up there with the pioneers in Europe in looking into the uses and develop the uses or are there still some problems locally?

And there are these black markets, just for senior citizens

“We are moving in the right direction. The announcement last month of the institute is definitely great news and sends the right message that this is a serious topic that requires and warrants research. That is definitely moving in the right direction. There is widespread political support for this. When the medicinal cannabis law was enacted in April 2013, it had support from all of the parliamentary parties. There is support, the patients want it, but now they have to grow it themselves. I know personally some neighbours, grandparents, some lovely grandmothers, tell me how they and all their friends grow it. And there are these black markets, just for senior citizens. And unfortunately, due to some regulatory hurdles here, problems in the original law, and also the costs and limited amount of cultivation domestically, these things together continue to prevent the use of medical cannabis generally as it is envisioned by the people who created the law and the medical community and patients. But it can be overcome and the steps are happening and hopefully things will keep moving in the right direction.”