Medical marijuana could take a significant bite out of the pharmaceutical industry if adopted in all 50 states, according to a new study.
In its latest study, From Prescription to Recommendation: How Cannabis Could Disrupt the Pharmaceutical Industry, the analysts at New Frontier Data have found that if medical cannabis were legalized nationally, pharmaceutical expenditures on the top nine conditions commonly treated by medical cannabis could fall an estimated $18.5 billion between 2016 and 2019.“The United States constitutes 35 percent of the global pharmaceutical market, the largest market in the world, and a major driver of the U.S. economy,” said Giadha Aguirre De Carter, CEO and founder of New Frontier Data. “It is one of many industries that will be impacted by the growth of the legal cannabis market and we are already starting to see that trend in legal medical states where use of key prescription drugs is down by 11 percent.
“If cannabis were to be adopted nationally, we would begin to see a trend of patients turning to medical cannabis as a substitute or complement to pharmaceuticals,” Aguirre De Carcer said.
New Frontier Data’s analysts looked at chronic pain, post-traumatic stress disorder (PTSD), sleep disorders, anxiety, nerve pain, chemotherapy induced nausea and vomiting (CINV), Tourette syndrome, glaucoma, and seizures/epilepsy, nine of the conditions designated by the National Academies of Science as being most effectively treated by medical cannabis.
Based on a 2016 Health Affairs study which found an 11 percent reduction in drug prescriptions in medical cannabis states, analysts estimated what the total reduction would be if medical cannabis were fully legal nationwide. By applying that decrease to the total amount of money spent in the U.S. on treatments for these conditions, it is estimated that cannabis and related products can replace $4.4 billion to $4.9 billion per year of current spending on existing treatments.
“Looking at these numbers, it would appear that medical cannabis would be a drop in the bucket when it comes to impacting the total pharmaceutical industry,” Aguirree De Carcer said. “However, when you start to break down the numbers by specific sectors of the industry, like chronic pain or symptoms associated with chemotherapy, which are very lucrative markets for pharmaceutical companies, you will certainly see cannabis have a major impact.”