The pharmaceutical industry could have a near-death experience and not fully recover if nationwide medical marijuana legalization became a reality. This is the sentiment from the most recent research from the analytics firm New Frontier Data.
In a study titled “From Prescription to Recommendation: How Cannabis Could Disrupt the Pharmaceutical Industry”, researchers documented how if medical cannabis were legalized in all 50 states, the expenditures by pharmaceutical companies on the top nine conditions commonly treated by medical marijuana could plummet by as much as $18.5 billion between 2016 and 2019.
According to Giadha Aguirre De Carcer, CEO and founder of New Frontier Data, 35% of the global pharmaceutical market comes from the United States. In addition to being the largest market in the world as well as a major driver of the U.S. economy, it’s just one of a number of industries that will be impacted by the already flourishing legal cannabis market. There’s already a trend in the states were medical marijuana is legal that’s showing that the use of key prescription drugs has decreased by 11 percent.
With nationwide legalization of medical cannabis, there would likely be a trend of patients opting for it as a substitute or complimentary addition to traditional pharmaceuticals.
The nine conditions, classified by researchers at the National Academies of Science, as being most effectively treated by medical cannabis are: chronic pain, post-traumatic stress disorder, sleep disorders, anxiety, nerve pain, chemotherapy induced nausea and vomiting (CINV), Tourette syndrome, glaucoma, and seizures/epilepsy.
Analysts at New Frontier Data estimated what the total decrease would be if medical marijuana was totally legalized throughout the country. They also factored in the decrease to the total dollar amount for expenditures in the U.S. on treatments for the 9 major conditions previously mentioned. According to their findings, they estimated that cannabis and related products could replace $4.4 billion to $4.9 billion per year of current spending on existing treatments.
Based on this data, it appears that the impact of medical cannabis would not cripple the pharmaceutical industry.
However, when the data is broken down and grouped by specific sectors of the industry, such as symptoms connected with chemotherapy or chronic pain, both of which are extremely lucrative markets for the pharmaceutical industry, marijuana would have a major impact.