The convergence of two industries
It’s happening. One of the oldest and most established global industries is colliding full force with a small, dynamic, and swiftly growing new industry. Pharmaceutical and cannabis are coming together at a rapid clip – forces that cannot be stopped but will disrupt both industries in ways that can only remain to be seen.
Recently, CCI had a great opportunity to present at the PMCQ (Pharmaceutical Marketing Club of Quebec). The presentation fostered discussion between these merging industries and key opinion leaders on the product development and collaborations of both industries. A success, as it helped bridge many knowledge gaps between the two industries.
Pharma is Coming for the Cannabis Industry
You see it in the news headlines “Big Pharma is Coming for the Cannabis Industry” and the partnership announcements between big pharma and established licenced cannabis firms accelerated in 2018. It is also evident at industry conferences – the influx of “suits” in 2018 was visibly noticed by industry players. These are all signs of the new dynamics.
Pharma has observed the market growth from the sidelines even before cannabis was legalized recreationally in Canada. They have seen the potential threat of cannabis as a medicine but also the silver lining in this emerging market. There’s no doubt that the pharmaceutical industry will try to capture the medicinal cannabis market, and this has already begun. Pharma sees the forces and they see the financial opportunity as the global medical cannabis market size was valued at $13.9 billion in 2017 and is projected to grow at an annual growth rate of 17.1 percent through 2026. The chronic pain and cancer segments are projected to be the fastest growing applications of medical cannabis.
The traditional medical uses for cannabis are now seen as the drug development pipeline of the future for pharmaceuticals; pharma must ensure the longevity of their product pipeline, as does any business segment. Think of Epidiolex: almost everyone in the cannabis space has heard of the heart-wrenching story of Charlotte Figi, a toddler that experienced over 300 seizures a week down to 2-3 times a month with the help of cannabis oil. It would be more surprising had pharma NOT taken this knowledge to create a drug for patients with epilepsy. Drugs can be sold in all jurisdictions where they are approved which is currently an advantage over the cannabis industry to have cannabis drugs available in jurisdictions where medicinal cannabis may not yet be legal expands the global outreach for pharma.
Health Canada has established new licence classes under the Cannabis Act to allow establishment of R&D and Drug Facilities (the Cannabis Drug Licence, or CDL) which will accelerate research and development in the cannabis space. This opportunity – to do more research on a drug that was previously a controlled substance, is so substantial in nature that it cannot be quantified. We need this research and the body of data that pharma can generate to validate the indications for cannabis plant use. With the experience and the resources to conduct research and clinical trials, this is a big advantage the pharma industry has in their ability to generate data to back medical cannabis products.
But Cannabis is also Coming for the Pharmaceutical Industry
Cannabis is coming for pharma too. Serving as a more-affordable alternative treatment to many medical conditions, medical cannabis can possibly replace pharmaceutical sales worth up to USD$20 billion in the next two years alone.
Consider the pain industry, cannabis has the potential to displace a large proportion of the pain management segment in pharma – including opioids and other pain management treatments. Study after study show that in jurisdictions with legal cannabis for medical use there is a decline in pain treatment and prescriptions for pain management. Pain is an indication that needs more choices for management, and the personal choice to try cannabis without fear of arrest, is one this that will change the landscape for pain management, prescription drugs in the pain segment and, very importantly, the patient experience.
Cannabis will compete with its pharmaceutical counterparts for every indication where a drug is approved. Cannabis is a strong competitor as it will be more accessible in the legal medical and recreational markets, and may for many people, work as well as the pharmaceutical product, perhaps with fewer side effects. Another strong advantage is the affordability of cannabis products compared to prescription cannabis drugs, which drugs like Epidiolex can be costly. Use of cannabis also maintains the “entourage” effect that results from the myriad of other cannabinoids in cannabis, whereas a purified and standardized pharmaceutical won’t have an ‘entourage’.
Partners for Life
The cannabis industry serves as both a threat and an opportunity to the pharmaceutical industry, and both are here to stay. The cannabis industry also realizes the global reach and resource advantage of the pharmaceutical industry. Thus, both sides have already slowly begun creating strategic partnerships.
Tilray and Sandoz’s agreement has been a recent highlight in the media, but there are a few others, such as CannTrust and Apotex. These collaborations are just beginning to increase. The relationships between the two industries will surely be competitive yet symbiotic. The partnerships in the pharma-cannabis space will be spectacular as more converge and leverage each other’s resources, influence and expertise.
The interface between our industries is now open and quickly growing. It’s time for players on both sides to accept it, seek to understand it, and try to collaborate for the greater good. With highly experienced experts from both cannabis and pharmaceutical industries, CCI can help bridge the gap between industries. From filling knowledge gaps and assisting in regulatory processes, to product development and facilitating partnerships CCI is uniquely positioned to serve both industries.
Written by: Karina Lahnakoski, and Shaili Champaneria Quality & Regulatory