The pharmaceutical market is worth more than $1 trillion globally. Here in the U.S., Big Pharma earns hundreds of billions of dollars every year. But is the industry affected by Medical Cannabis? Absolutely. Medical cannabis harms Big Pharma’s bottom line.
Medical Cannabis proponents are not in favor of harming any industry. Yet the harm to Big Pharma is indisputable at this point. According to a first-of-its-kind study published in the PLOS ONE journal, the pharmaceutical industry loses upwards of $10 billion every time a state legalizes medical or recreational cannabis use.
The financial hit is impressive enough. But there is something more important here: the reasons behind the financial hit. Could it be that legalization encourages people to explore the therapeutic potential of cannabis, instead of OTC and prescription medications?
Big Pharma loses with cannabis legalization on two fronts. The first is stock price. According to the study, returns on pharmaceutical stocks tend to be as much is 2% lower some 10 days after a legalization event. That may not seem like much at first, but 2% of tens of millions of dollars is a lot of money.
The second front is actual pharmaceutical sales. Study data suggests average sales losses of up to $3 billion annually, per legalization event. So when Utah legalized Medical Cannabis back in 2019, it is possible that some drug company stocks fell. Once our program was implemented the following year, those same companies started losing billions in sales.
We can easily see how Medical Cannabis legalization would affect Big Pharma just here in Utah alone. We know from our own experience that patients often turn to Medical Cannabis as an alternative to other therapies. They have tried other medications that didn’t work. They have tried things like physical therapy and lifestyle changes.
Imagine being a patient trying to manage chronic pain with prescription opioids. The opioids make you feel terrible, but OTC pain medications just don’t offer enough relief. Then a friend suggests you get your Utah Medical Cannabis card. He swears by cannabis and its ability to help you feel better.
After visiting with a Qualified Medical Provider (QMP) and getting your Medical Marijuana card, you begin your Medical Cannabis journey. You discover your friend was right. Within a few months, you are finding enough relief with cannabis that you’re no longer taking prescription opioids.
The company that manufactures your opioids is no longer earning revenue from you. But you are just one patient. There could be tens of thousands of others, just in Utah alone, that have given prescription opioids the proverbial heave-ho. All those prescriptions no longer being filled puts quite a dent in the bottom line.
Right now, the cannabis industry has no equivalent to Big Pharma. That’s primarily because cannabis remains a Schedule I controlled substance under federal law. But if Washington ever moves to decriminalize it, watch out. Corporate consolidation will be the trend to follow.
Our current fractured state market will undoubtedly experience enough consolidation to create Big Cannabis. It may take a while, but it will happen if cannabis is ever decriminalized. What will that mean for patients? Only time will tell.
What we do know is that cannabis legalization is hurting the pharmaceutical industry. Every time a state gives the green light to either medical or recreational cannabis, Big Pharma loses billions. That only demonstrates the reality that Medical Cannabis users are turning to the plant-based drug as an alternative to traditional prescription meds. What more do we really need to know about its usefulness?