Nastasia BachSonnenstr 19

80331 München

089 7484 86 50bach@pivot.re

The Regulatory Landscape for Medical Cannabis in

Germany

FrankfurtOctober 2018

Regulation of Patient Access

3

Background to the “Cannabis as Medicines Act”, March 2017 Two landmark decisions on medical cannabis

Seriously ill patients must be able to alleviate their suffering with medical cannabis

The application for permission to access and possess medical cannabis for the treatment of multiple sclerosis cannot be rejected pursuant to § 3 (2) of the Narcotics Act (BtMG) on the ground that such treatment is not in the public interest.

The Federal Opium Agency (BOPST) issues special permits for the medical use of cannabis

The Federal Opium Agency issues permits for the purchase of cannabis flowers and extracts from pharmacies on the basis of the BVerwG 2005 decision. Patients must bear the cost of treatment themselves.

Seriously ill patients must be able to grow their own cannabis for medical purposes

Allowing patients to grow their own cannabis for therapeutic purposes is in the public interest within the meaning of § 3 (2) BtMG if the applicant suffers from a serious illness and there is no equally effective and affordable alternative therapy available to him /her for the treatment of the disease.

Decision of the Federal Administrative Court(BVerwG 3 C 10.14 from 6.4.2016)

Decision of the Federal Administrative Court(BVerwG 3 C 17.04 from 19.5.2005)

2016

2005

2007

4

The “Cannabis as Medicines Act”Regulation of patient access, reimbursement and commercial cultivation

„Das Gesetz zur Änderung betäubungsmittelrechtlicher und anderer Vorschriften“ of 6. March 2017

REGULATION OF PATIENT‘S RIGHT TO CARE AND REIMBURSEMENT (§ 31 Para. 6 SGB V)

For access to medical cannabis and reimbursement by the statutory health insurance (SHI), patients must meet three criteria:1. Presence of a "serious illness2. Absence of an alternative therapy that meets medical standards3. No remote prospect of a noticeable effect on the course of the

disease or symptoms

REGULATION OF PRODUCTION (§ 19 Para. 2a BtMG)

§ Cultivation is subject to the BfArM’s control.§ The BfArM controls and monitors the cultivation of medical

cannabis.§ The Agency buys the medical cannabis from producers after the

harvest.§ The purchase of the medical cannabis "takes place according to

the provisions of public procurement law".§ The BfArM is to fix the post-factory price for the sale of medical

cannabis in accordance with costs incurred.

INTERNATIONAL PROVISIONS ON THE REGULATION OF MEDICAL CANNABIS (§ 23 Para 2 Letter d)

„All cultivators of the [cannabis] shall be required to deliver their total crops of opium to the Agency. The Agency shall purchase and take physical possession of such crops as soon as possible, but not later than four months after the end of the harvest.“

UN Single Convention on Narcotics Drugs 1961

5

Prescription and Reimbursement of CannabisFrom the patient’s perspective

Private RX

Up to 1 Week

Consultation with Doctor Dispensing by PharmacyAssessment of Health Insurance

SHI RX

Approval

3 - 5 Weeks 1 Week +

1. Consultation & (Prescription)

2. Application for Reimbursement

3. SHI referral to MDK 4. MDK Assessment & Decision 5. Ordering of Medicine

6. Identity Verif. & Preparation

Rejection

Appeal24 Euro/gram Monthy therapy costs of up to 2.160 € (with a daily prescription of 3g)

6

Pricing of Cannabis-Based Magistral Preparations Flowers, Extracts, Dronabinol

Materials and required packaging + profit

Displayed as a percentage of the total price

Wholesaler 18 %

Producer 22 %

Pharmacy 42 %

Tax 16 %

Narcotics Prescription Fee 2 %

+ 90 % Fixed Surcharge+ Pricing contract

for substances andformulations made with substances

+ Recipe Surcharge+ Fixed Surcharge

+100 % Fixed Surcharge+ Pricing contract

for substances and formulations made with substances

§5 AMPreisV: Pharmaceutical Preparations

§4 AMPreisV: Preparation ofUnprocessed Substances

Set prices of containers incl. 100% surcharge

19% VAT is calculated as the last step

Fee for the documentation of narcotics; not included in the gross price; reimbursed by the SHI

Fee for the processing of substances, dependent on the expenditure in production (mixing, heating, production of capsules etc. )

Fee applied to medicinal products preparations and to approved medical products

Costs for various containers, caps etc. incl. 90% surcharge

Regulation of Domestic Supply

8

Aspects of the Tender I: Cannabis ProductRestriction to one Cannabis Product

Supply contracts are concluded exclusively for cannabis in the form of flowers.

In medical practice, medicinal products in the form of extracts and capsules are equally as important.

Tendered Cannabis Product Currently Prescribed Cannabis Products*

Unprocessed Cannabis Flowers

Cannabis Preparations (Dronabinol,Cannabis Flowers, Extracts)

Marinol

Canemes

Sativex

40%

31%

28%

* GKV, Bundesbericht (2018)

Distribution of Prescriptions among Cannabis-based Products

9

Aspects of the Tender II: Types of Cannabis StrainsRestriction on Cannabis Strains

Three types of cannabis strains are tendered, each with a different THC and CBD range. Producers are limited to producing strains within this range.

One-third of the prescribed varieties are not within the tendered THC and CBD range of Cannabis types.

THC: 18 - 22%CBD: < 1%

THC: 12 - 16%CBD: < 1%

THC: 5 - 9%CBD: 5 - 9%

THC: 6,3%CBD: 8%

THC: 22%CBD: <1%

THC: 8%CBD: 8%

THC: 16%CBD: <1%

THC: 18%CBD: <1%

THC: 20%CBD: <1%

THC: 22%CBD: <1%

THC: 18%CBD: <1%

THC: 13,6%CBD: <0,5

THC: 1%CBD: 9%

THC: 8%CBD: 8%

THC: 14,%CBD: <1%

THC: 16%CBD: <1%

THC: 18%CBD: <1%

THC: 20%CBD: <1%

THC: 22%CBD: <1%

THC: 5,4%CBD: 7%

THC: 13,6%CBD: <0.5%

THC: 20,3%CBD: <0,5%

THC: 5,4%CBD: 7%

Tilray Tilray

KlenkKlenk Klenk

Pedanios Pedanios Pedanios Pedanios

BedrocanBedrocan BedrocanBedrocan

Tweed Tweed Spectrum PeaceNaturals

PeaceNaturals

MedReleaf

MedReleaf

Pedanios Pedanios Spectrum Spectrum Tweed

Bedrocan

PeaceNaturals

Spectrum

PeaceNaturals

PeaceNaturals

§ Dr. Med F. Grotenhermen (31.08.2018)§ 24uhrmedikamente.de

THC: 10,4%CBD: 7,5%

THC: 8,1%CBD: 11,7%

THC: 10%CBD: 10%

THC: 24%CBD: 1%

THC: 23%CBD: <1%

THC: 24%CBD: <1%

THC: 10%CBD: 10%

THC: 25%CBD: 0%

THC: 26%CBD: <1%

THC: 23,4%CBD: <0,5%

Tendered Cannabis Strains Currently Prescribed Cannabis Strains

TYPE I TYPE II TYPE III

10

Aspects of the Tender III: QuantityRestriction on the Quantity Produced

2.000

4.000

6.000

8.000

10.000

12.000

2017 2018* 2019* 2020* 2021* 2022* 2023*

Unterer Prognosewert Mittlerer Prognosewert Oberer Prognosewert Tendermenge Tendermenge (+10%)

+10 %

Quantit

y o

f C

onsu

med

Cannab

is (k

g)

Key drivers of the German medical cannabis market are the increase in patient numbers and the distribution of patients across daily dosages. The static tendered quantity does not account for these two factors of change.

11

Comparison to other EU-Cannabis TendersNetherlands and Denmark

…

…

I. Adherence to the UN-Model*§ Designation of a state agency, which

§ purchases the crops

§ And within four months

§ Takes them into physical possession

Cannabis Agency (BfArM) Cannabis Bureau Danish Medicines Agency

II. Optimisation of patient care§ Limit on products

§ Limit on quantity of cannabis produced

§ Limit on number of producers

§ Ability to meet domestic demand

(Flowers)

(10,6 Tonnes)

(3-13 )

(Flowers)

(Monopoly)

TBC

III. Administrative Procedure§ Application deadline for approval of

production

§ Deadline on start of production

GERMANY DENMARK**

* According to Article 28 and 23 of the UN Single Convention on Narcotics** Dutch Cannabis Bureau (2018) & EMCDDA (2017)*** Danish Medicines Agency (2018)

NETHERLANDS**

12

TakeawaysA Summary of the Key Points Discussed

§ The aim of the “Cannabis as Medicines Act” was to prevent patients from growing their own cannabis and improve patient care.

§ The Act does not regulate domestic production in detail: implementation and regulation left to the BfArM.

§ The process of accessing medical cannabis for patients is lengthy and varying approval rates among Federal States (40-75%) could suggest that patients do not have equal levels of accessibility.

§ If Germany wants to optimize patient care, it is likely to rely on imports because of three restrictive aspects of the tender: product, types of strains and quantity.

§ When drawing a comparison with other EU-tenders, Denmark demonstrates that it can be done differently.

Nastasia BachSonnenstr 19

80331 München

089 7484 86 50bach@pivot.re

Thank you very much for your attention!