The High Cost of Pharmaceutical CBD – Who Pays the Price?

CBD pills -- CBD laws may change soon

Just a few weeks ago, GW Pharmaceuticals shocked the nation by receiving FDA approval for the first-ever cannabis-derived pharmaceutical medication, Epidiolex. While other synthetic marijuana medications like Marinol exist, this was a giant leap forward for cannabis therapy. As a 99.6 percent pure cannabidiol extract approved for anyone over the age of 2, Epidiolex is intended for pediatric cases of severe, intractable seizure disorders.

Many producers and consumers alike applauded the accomplishment knowing it would for changes to CBD laws.

However, in a recent conference call with their investors, GW announced the astronomical cost of Epidiolex. Although the dosing will vary depending on the individual, company officials stated the "average patient" will pay $32,500 per year or about $90 per day for the drug.

Unfortunately, they didn't define who the average patient is, or what the actual cost of the drug is, leading many to wonder, "Who is 'average' and how much, actually, does Epidiolex cost?"

Who’s "Average"?

Without knowing the exact cost of the drug, or who GW is considering "average", we can only speculate how company officials came up with this figure.

Per the FDA label, Epidiolex is recommended at 2.5mg per kilogram of weight for the first week, moving up to 5mg per kilogram the following week for a standard maintenance dose of 10mg per kilogram of weight daily, with a maximum dose up to 20mg per kilogram daily.

So, let's look at a few possible scenarios.

Scenario #1 – The Child

Epidiolex vs Cannabis

In this clinical trial of Epidiolex, the average age of the participant was 10 years old. So, if this is GW's average patient, let's break down the actual cost of the drug. According to national statistics, the average 10-year-old weighs 70 pounds or 31.9kg. Therefore, based on GW's recommendation this average patient's maintenance dose might look like this:

31.9kg x 10mg = 319mg daily or about 116g per year

If this is the "average patient" GW refers to, at $32,500 a year, Epidiolex costs about $280 per gram.

Scenario #2 – The Teen

Even at the maximum recommended dose of 20mg per kilogram, with an 18-year-old girl who weighs 125 pounds, the daily and annual usage might look something like this:

56.7kg x 20mg = 1.1g daily or nearly 400g per year

If this is the "average patient" GW refers to, at $32,500 a year, Epidiolex costs about $80 per gram.

Scenario #3 – The Adult

Finally, the average American adult weighs 80.7kg. Therefore, if this is what Epidiolex is calling average then, the average daily consumption might be:

80.7kg x 20mg = 1.6g daily, or nearly 584g per year.

If this is the "average patient" GW refers to, at $32,500 a year, Epidiolex costs about $56 per gram.

The Hemp Comparison

On the other hand, Bluebird Botanicals makes a non-FDA approved CBD isolate powder, made from hemp, which is between 96-99.9 percent pure cannabidiol. Available without a prescription, the retail cost of this product is $175 for 5 grams of isolate or about 12.5 percent of the cost of Epidiolex.

So, let's look at those three scenarios again, and re-figure the numbers based on Bluebird Botanicals retail price:

  • The Child who consumes 116g per year – their annual cost is $4,060.
  • The Teen who consumes 400g per year – their annual cost is $14,000.
  • The Adult who consumes 584g per year – their annual cost is $20,440.

Even at the maximum recommended dosage for an adult, Epidiolex costs $12,000 more per year than the retail cost of an herbal supplement already available.

Of course, the benefit of FDA approval means the high cost of the drug will be covered by most insurance companies, but what does the high cost of pharmaceuticals due to the average price of health insurance premiums? Everyone will pay for the fleecing of cannabidiol with rising insurance costs.

Increased Consumer Awareness

While we would like to believe the high price of pharmaceuticals is due to the exorbitant price of research and development, as well as licensing and approvals, a report by Dr. David Belk, MD, paints another picture. After studying the financial statements of 13 pharmaceutical companies over the course of seven years, Dr. Belk was able to show these companies spent 60 percent more on marketing costs than research and development. In other words, the pharmaceutical industry spends more money convincing you to take their drugs than they do researching them. Let that sink in.

Did you know? The United States and New Zealand are the only two countries in the world where pharmaceutical companies are allowed to advertise to the consumer directly. Ironically, the United States also consumes 45 percent of the world's drug supply.

Future Federal CBD Laws

With the approval of a pharmaceutical-grade CBD product, some speculate changes may be on the horizon for hemp cultivators intending to produce products for human consumption. The pilot program allowing most hemp cultivators and processors to operate is the Farm Bill, which supports industrial hemp cultivation in the United States. By law, these crops are intended for products like plastics, fibers, and biofuels. There is little to no regulation regarding how the crops are cultivated, so the products which are made for human consumption are rarely tested or controlled.

Not long after GW Pharmaceuticals gained approval for their drug, California lawmakers made the announcement to no longer allow the sale of CBD nutritional products made from industrial hemp for humans or pets – which under the definition of the law, all hemp is industrial. So, why the sudden crackdown?

As an excellent phytoremediator, hemp pulls toxins out of the water and soil it is grown in; therefore, unless grown in controlled, organic conditions, hemp can contain a number of heavy metals and toxic contaminants. In fact, unless the soil is certified organic, the hemp plant pulls residual toxins left behind from the crops previously grown in the field, which means, the final CBD extracts from these crops likely contain heavy metals and toxins. Without FDA oversight and testing, consumers may be getting more than they bargain for when they purchase certain hemp-derived CBD products.

Possible Changes to CBD Laws

Just as many California marijuana growers found out this year, if CBD federal laws are imposed and the grower can't meet the demands, they are going to be forced out of business. Expect to see new regulations enforced regarding nutritional hemp for human and pet consumption. Many smaller players in the CBD arena will likely get pushed out of the market for non-compliance and consumer safety.

Cultivators and producers could see stringent regulations regarding their growing processes to mimic the controlled, organic, and highly-regulated cannabis industry processes. Changes may include required third-party testing for contaminants, toxins, and active compounds like cannabinoid and/or terpene profiles. Only the biggest hemp producers, like Folium Biosciences, will go unscathed.

While the hemp industry scrambles to catch up, consumers should expect to see the cost of CBD products skyrocket as the demand will be far greater than the supply. The legal cannabis industry should expect to see an uptick in CBD sales as well and prepare in advance to meet the heavy demand of the consumer by producing more CBD-rich weed strains.

Clearly, the approval of Epidiolex was a beacon of hope for the cannabis and hemp industries. Finally, the government is forced to acknowledge cannabis doesn't belong in Schedule 1. However, the consumer, and anyone who pays their taxes and contributes to health insurance, is ultimately the one who pays for these outlandish costs. While GW Pharmaceuticals certainly isn't the first company to exploit desperate people for financial gain, it may be the most obvious as people start to price-compare and ask questions.