The German National Association of Statutory Health Insurance Funds (GKV) has released the latest batch of data on reimbursements for medical cannabis products covering Q3 of 2021. Sales of publicly insured medical cannabis have stagnated over recent quarters, with Q3 of 2021 having almost the identical value of sales as Q3 of 2020.
The publicly reimbursed market grew by 7% for the nine months ending December 2021 compared to the same period in 2020. These data represent sales of medical cannabis that have been reimbursed by public health insurers, which cover 90% of the German population. The precise market share of privately covered medical cannabis is not known but may sit around 50% and are likely growing faster than public reimbursement.
Note: In Q3, there were some delays in the reporting of medical cannabis reimbursements due to a change in the reporting system at GKV.
The current lack of market growth reflects an unfortunate reality in Germany that patient access to medical cannabis is still quite low. One issue is that doctors are often unwilling to prescribe cannabis. This is due to several factors, including: a lack of understanding of cannabis, a lack of public insurance reimbursement, and a lack of legal protection for doctors, where some have been sued for prescribing cannabis medicines where it was not deemed necessary.
Unapproved medications such as cannabis in Germany can only be approved on the basis of three criteria:
(1) When it is for the treatment of a serious (life-threatening or permanently detrimental to the quality of life) medical condition;
(2) Where no other therapy is available; and
(3) Based on the available data, when there is a justified prospect that treatment success (curative or palliative) can be achieved with the medicine in question.
Insurance firms are increasing the requirements placed on patients and doctors to meet the third criterion, meaning many patients need to pick up the costs themselves or seek help from private insurers.
Product Split
The split of product formats being sold in the country continues to evolve, with raw and lightly processed flowers now making up about 40% of publicly reimbursed sales, with premade and pharmacy-made extracts accounting for 30% and pharmaceuticals such as Epidiolex accounting for a further 30%. However, the small portion of sales that are not reimbursed by public health insurers are likely dominated by flower, meaning the overall proportion of sales value is slightly higher than 40%. Approved pharmaceutical cannabinoids have been growing as a share of the market, though Epidiolex has only been included in the GKV reports since Q4 2020 at the request of Prohibition Partners.
As of December 2021, extracts to be used in vaporisers reached the market from Panaxia Labs Israel, and offer an alternative to the pharmacy-prepared oils currently in use. Oils for vaporisers make up a large segment of medical markets in North America and so can be expected to grow in importance over the coming years in Europe.
In December 2021, Canopy Growth announced the sale of C³, which had been their centre of production in Europe for dronabinol – a major product category on the continent. Canopy sold the company for a maximum of €122.6 million (based on certain milestones), significantly less than the €225.9 million they paid only two years ago. This represents a major divestment of the company away from Europe and specifically from the isolates and pharmaceutical sector on the continent.
Domestic Cultivation
July 2021 marks the first time cannabis cultivated in Germany was legally sold on the medical market. The products were grown by Tilray and distributed to pharmacies by German group Cansativa. The German government has contracted three growers: Tilray, Aurora and Demecan, who together are contracted to supply 10.4 tonnes of medical cannabis over a four-year contract. Cansativa has the exclusive rights to distribute these products. Domestically grown cannabis has a slightly lower price tag for pharmacies than imports, at €4.30 per gram.
Imports
As explored in the The Global Cannabis Report: Second Edition, imports to Europe, and Germany in particular, are now coming from a wide range of countries, with a reduction in the dominance of Canada and the Netherlands. Data released under a parliamentary enquiry show that during the first half of 2021, 17 countries exported medical cannabis to Germany, with over 100kg of product coming from each of Denmark, Portugal, Australia, Uruguay, Spain and Austria. This is aided by distributors such as Cantourage, which facilitates imports under EU-GMP guidelines from global producers, with the addition of Ugandan products in January 2022.
Adult-Use Cannabis Legalisation: Many Details Missing
The incoming German government is expected to introduce legislation allowing for the legalisation and commercialisation of adult-use cannabis in Germany during this legislative period. The exact details of such legislation have yet to be finalised, with crucial details currently unknown such as the eventual points of sale, or the possibility of a trial period preceding full legalisation.
This week, Federal Justice Minister Marco Buschmann of the FDP mentioned that the timelines for legalisation are unknown, not least due to the pressure on the legislature of having to deal with the current pandemic. Advocates have cause to be hopeful, with the arrival of Burkhard Blienert (SPD) as the new Drug Commissioner. Blienert has in the past advocated for a more liberal approach to cannabis, and co-authored a pro-cannabis position paper, which stated ‘Regulation (..) relies on controlling supply and market access with direct positive effects such as better protection for consumers and the reduction of criminal profits.’
Advocates of medical cannabis are hopeful that whichever laws are passed to loosen control on cannabis in Germany, patients will benefit from the removal of some of the outdated legal barriers to distribution and access of these medicines.
For an in-depth exploration of cannabis markets around the globe, see Prohibition Partners’ recently-released The Global Cannabis Report: Second Edition.
