Medical marijuana is disrupting multiple markets including the pharmaceutical industry. One of the reasons pot is cutting into pharma profits is its economical advantage for patients since it provides better pain relief at a lower cost. Here’s a deeper look at how cannabis is affecting pharma profits.
Relief for Overpriced Pharmaceutical Medicine
Big pharma is regularly accused of marking up drug prices, even when costs do not increase to manufacture them. Clearly, pharma companies invest much more money in marketing than research and are driven by high profit margins. High consumer prices have made it a very lucrative business in the past, but medical marijuana is more affordable and creating challenges for traditional pharma companies.
Research is growing that the abuse of prescription painkiller drugs is no longer as prevalent in states that have legalized medical marijuana. A recent study at the University of Georgia confirmed that painkiller abuse fell noticeably in 17 states where medical marijuana was legally available between 2010 and 2013. Doctors prescribed less doses of antidepressants and other medication in these states. Furthermore, the study found that Medicare was saving millions of dollars because of the cultural shift toward cannabis.
The type of pharma drugs that are not threatened by cannabis sales are ones in which cannabis is not recommended such as blood thinners and antibiotics. Researchers believe that the passage of marijuana laws have had a dramatic effect on how people spend money on medicine.
Marijuana as a Medical Alternative
Many Americans are turning to marijuana as a more cost-effective alternative to pharma drugs for numerous health conditions beyond pain such as anxiety, nausea, seizures and sleep disorders. Patients suffering from cancer, glaucoma and dementia have also found better comfort from medical marijuana. The key has been to find an appropriate cannabis strain that helps the patient relax and forget about negatives.
Pharmaceutical companies have spent big money on fighting marijuana reform laws for decades. They’ve also tried to persuade federal officials to prevent decriminalization of marijuana since they have a financial stake in keeping it illegal.
What Big Pharma Can Expect
Big pharma isn’t going to be toppled overnight by marijuana, but the plant is growing in popularity and will likely continue to make a dent in pharma profits. Some reports say the industry may lose as much as $4 billion per year because of the rising interest in cannabis as a multipurpose medical solution. Currently the pharmaceutical industry earns in the neighborhood of $425 billion annually. Large pharma companies have stated they believe they may lose as much as $500 million a year to marijuana.
Don’t be surprised to find out big pharma companies that are threatened by marijuana are still donating money to politicians who are trying to link pot to drug addiction. As much as this battle continues, laws have consistently moved in favor of legalization of marijuana across the nation. Americans currently spend between $7 and $10 billion per year on marijuana and that figure is expected to grow significantly in the next decade.