Legal weed is costing Big Pharma 4 billion dollars
As legal weed aims to disrupt Big Pharma, the threat of a new monopoly looms overhead. But there are even more insidious threats to the cannabis industry.
Photo by James MacDonald/Bloomberg via Getty Images
A new cash crop is being legalized across the western world. The cannabis market is set to rake in billions, both in tax revenues and new business ventures. After a century of prohibition, the world of medicine and business is being shaken up by the most commonplace contraband going straight. Big Pharma companies have long benefitted from their control over the world of medication and pain supplements. Be it heroin, cocaine or fentanyl, many prescription drugs create tomorrow’s drug epidemics. All the while cannabis possesses no inherent addictive or lethal qualities.
So how much will these pharmaceutical companies lose in the transition to legalized weed?
One study believes the American prescription drug world stands to lose a whopping $4 billion collectively as cannabis is legalized for medical and recreational purposes. The study comes from New Frontier Data, a group specifically focussed on data collection relevant to the cannabis industry. Their numbers are derived from a University of Georgia paper about the correlation of Medicare’s medical marijuana and prescription drug sales from 2010 to 2013 when the legalization movement had first gone into full swing. In their sample, the researchers believe there were over $150 million dollars a year not spent on prescription drugs.
“Any opportunity for alternatives that could result in reduced pharmaceutical drug use might present a compelling point of discussion from a public policy standpoint,” said New Frontier’s John Kagia.
The pharmaceutical world has traditionally fought tooth, nail, and comically large bag of cash against drugs even becoming generic. You can imagine then, that an anticipated new medicine arriving generic—a drug decentralized by popularity—would break out the most intense lobbyists.
As America reassesses its relationship to pain supplements, with the country spiraling into an addiction crisis, the major pharmaceutical companies have never been under more scrutiny. Mismanaged drugs like OxyContin are killing off tens of thousands of victims each year, while companies like Pfizer make tens of billions in sales. Four billion may only sound like little more than a ding to Pfizer’s annual $53, but it’s still good riddance to bad practice.
Of course, even if profit dips are only flesh wounds to such colossal corporations, many are still concerned about the other possible outcome. While plenty of lobbyists and anti-cannabis studies are footed by Big Pharma, there are companies willing to lean into the cannabis trade if there’s money to be made. In recent years, traditional pharmaceutical companies have been investing in and acquiring marijuana businesses. Pfizer included.
One of the big fears isn’t anti-marijuana investments made by Big Pharma, but manipulations within the policy to benefit themselves and shut out others. The threat of a new monopoly looms overhead, but there are even more insidious threats. GW Pharmaceuticals, who have invested hundreds of millions into marijuana, have developed Epidiolex, a cannabis-derived medication focussed on epilepsy patients. How it navigates policy could prove to be a forerunner to Big Pharma’s relationship to weed. If approved by the FDA, it would become a federally legalized prescription drug, a cushier position than the drug Epidiolex is made from. It is possible then that, if policymakers prefer it, they could simply legalize derivatives of cannabis and not cannabis itself. And legislation ends up back under the control of the companies activists hoped to take down a rung.
“It’s time for Big Pharma to pay for what they’ve done,” said New York City Mayor Bill de Blasio.
“[W]e will go to court to ensure that the American people receive the compensation they deserve,” Attorney General Jeff Sessions said.
Senator Kristen Gillibrand publicly stated that pharmaceutical companies are only opposing medical marijuana for fear of competition.