If you regularly visit The Daily Leaf, you’ve probably noticed that we have a bone to pick with the pharmaceutical industry. This all began when we discovered that Insys, a pharmaceutical company best known for illegally bribing doctors to prescribe opioid painkillers, became the single largest donor to fight against a ballot measure that would legalize recreational marijuana use in Arizona last year. Although we can’t say for sure that Insys money played a role in the measure’s defeat, Arizona was the only state to have a recreational marijuana initiative defeated in 2016. Although company representatives will tell you that they are merely concerned about the safety of consumers, we’ve always suspected that other motives were at hand. Evidence that states with legal medical marijuana experience significantly lower incidence of opiate overdose gave us a hint of what might be at play. But a recent study by New Frontier Data, a cannabis research firm, puts hard numbers behind the reasons why Big Pharma is fighting legal marijuana.
The report is based on research conducted at the University of Georgia between 2010 and 2013. Researchers found that for many of the conditions most commonly treated with medical marijuana, Medicare spending on drugs for those conditions typically declined by about 11%. The New Frontier Data report extrapolates from that analysis to estimate the likely impact of medical marijuana on the pharmaceutical industry as a whole. They find that in 2017, about $4.5 billion will be diverted away from pharmaceutical purchases do to medical marijuana substitution.
While this might not be a huge piece of the massive overall pharmaceutical industry, for drug manufacturers that sell products that treat conditions that respond well to medical marijuana, such as chronic pain and chemotherapy associated treatment, this could take a significant bite out of their bottom line. For many pharmaceutical companies, marijuana producers may look more like competitors every day.