This is how Australia is consuming medical cannabis

A new report shows record numbers of doctors are prescribing medical cannabis as the Australian market is expected to triple by the end of 2020. 

There will be around 30,000 active cannabis patients in Australia by the end of the year – according to the latest in-depth report on the country’s medical cannabis sector.

This is a significant jump from just over 10,000 in December 2019.

The market has also seen the greatest drop in product prices since the 2016 legalisation of medicinal cannabis, as the industry continues to grow in size year on year – equating to almost $95million in sales by the end of 2020.

Australia’s most comprehensive medicinal cannabis analysis of patients, products and pricing was published by FreshLeaf Analytics on Thursday 17 September.

Those behind the report believe that the coming year could be a turning point for the industry, with record numbers of products available, rapid price declines and new regulations coming into force to improve patient access.

“The number of new products entering the market, and the degree of price drop is probably beyond levels we would have forecast 12 months ago,” Cassandra Hunt, managing director of FreshLeaf told Cannabis Health.

“The report does not specifically track attitudes, however record numbers of doctors are prescribing, suggesting that acceptance of cannabis as a therapy is gradually increasing.”

The number of products available has also doubled to 150 in the last year and is expected to exceed 300 by the end of 2021. Oil and flower product formats are still the most common representing around 80 percent of the products in the market.

This increase in competition has forced down prices. According to the report, patients buying legal cannabis products are now spending the same as those accessing it on the black market, putting Australia in line with more mature markets such as Canada.

Dr Mark Hardy, an addiction specialist and CA Clinics medical director said he hoped this would encourage patients to use legal routes, he commented: “It’s encouraging to see the recent product price decline, bringing illegal and legal markets to parity. This will hopefully enable more patients to gain access to legal medicine pathways, with confidence in the contents and dose”.

However, medical cannabis prescriptions are not covered under the Pharmaceutical Benefits Scheme and so remain costly compared to conventional medicines.

Cassandra added: “Prices are now on par with the illegal market, but despite this, because medicinal cannabis products are not subsidized by the Government prices do appear expensive in comparison with subsidised medicine.”

But FreshLeaf believes this could be about to change, in what could be a ‘significant milestone’ for the industry.

In August, the Pharmaceutical Benefits Advisory Committee (PBAC) – the body that decides whether certain medicines can be subsidised by the taxpayer – deferred a decision to subsidise Epidyolex, a medicinal cannabis product used to treat children suffering from rare forms of epilepsy.

Regardless of the decision, FreshLeaf expects Epidyolex to be included on the Australian Register of Therapeutic Goods (ARTG) soon, meaning that doctors will be able to prescribe it freely.

Previous reports have shown that average dose increases over time, and this trend has continued with the average dose increasing to 92 milligrams per day – and more than three quarters of patients dosing at less than 100 milligrams per day.

“Lower prices have led to a wider uptake and higher doses and we expect that trend to continue,” said Cassandra.

“There are now 150 products in the market fighting for a share, but scale is a second factor. “Some of the products being supplied now in Australia are derived from raw materials that are increasingly being cultivated and produced on a large scale bringing down cost per unit.”

Of the products now available, 20 percent are low-dose CBD, a category that is likely to move to over-the-counter under new regulations in 2021.

Experts believe the year will be significant in defining what a ‘healthy’ medical cannabis industry looks like, with the prescription market expected to reach more than $150million.

Cassandra added: “The last 12 months has seen huge change in the industry. Record numbers of new products, rapid price declines and new regulations that will improve access and reduce patient prices.

“In the next 12 months we expect the market to continue to grow. We also expect significant consolidation as the number of players and product companies in the sector is excessive for the size of the market.

“Some Australian players will start to report meaningful revenues from overseas sales, mostly to Europe.”

Interestingly, the report found that sales had not been significantly impacted by the coronavirus pandemic however, FreshLeaf has speculated that a need for new taxable revenues could lead to a discussion about the legalisation of cannabis for recreational use.

With New Zealand going to the polls on 17 October, many in the industry are watching closely and believe a positive could encourage Australia to follow in their footsteps.