Cannabis-based medicines could have a significant impact on the sale of traditionally developed pharmaceutical products, including branded drugs and generics, a new report suggests.
Researchers from the University of New Mexico and California Polytechnic State University predicted the impact that approved cannabis and cannabis-related drugs would have on the stock returns of publicly traded pharmaceutical companies. The report also looked at the effects of legalizing recreational cannabis.
The paper’s co-author, Sara Stith, a professor of economics at UNM, explains that using cannabis to treat certain conditions may be seen as a new competitor in the market. If cannabis were to be legalized in the United States, she and Ziemowit Bednarek of Cal Poly estimate that it could reduce pharmaceutical sales by about 11%, which represents billions of dollars in revenue for pharmaceutical companies.
Stith and Bednarek found stock market returns to be 1.5% to 2% lower 10 days after legalization or regulatory clearance. This drop represents significant losses in the industry, the researchers said.
“Currently, cannabis patients and their providers have little information to guide them to the most effective treatment for their condition. The future of cannabis medicine lies in understanding the prevalence and effects of plant components beyond THC and CBD and in identifying ways to categorize cannabis according to measurable characteristics known to produce effects. specific,” Stith said in a statement.
BioSpace contacted the study authors for additional information about their research.
The study, U.S. Cannabis Laws Set To Cost Generic And Brand Pharma Companies Billionswas published in PLOS One.
Given that cannabis could become a competitor to conventional pharmaceuticals, the authors suggest that companies could benefit from investing in cannabis research rather than opposing its regulation. And, of course, many companies make such investments. In 2020, the data published by Transparency Market Research show significant investments have been made by companies in the development of cannabidiol.
Two areas of focus in the cannabis pharmaceuticals market are curbing the opioid epidemic and managing certain cancers, market researchers wrote. “Stakeholders also appreciate the potential of medical cannabis for aesthetic and medical dermatology,” they said.
The FDA has approved four drugs that are either derived from cannabis or related to cannabis. The first is Epidiolex, now owned by Jazz Pharmaceuticals, which in 2018 became the first cannabis-based drug approved by the FDA. This medicine required reclassification by the United States Drug Enforcement Agency prior to marketing.
Epidiolex, a cannabidiol derivative, has been approved by the FDA for the treatment of seizures associated with two rare forms of epilepsy, Lennox-Gastaut syndrome (LGS) and Dravet syndrome.
The FDA has also approved three cannabis-related drugs. These drugs are Marinol and Syndros, both of which contain dronabinol and synthetic delta-9-tetrahydrocannabinol (THC), which is considered the psychoactive component of cannabis. The other is Cesamet, which contains nabilone, an active ingredient that has a similar chemical structure to THC, according to the FDA.