Health & Wellbeing

Cannabis legalization in US projected to cost big pharma billions

Cannabis legalization in US projected to cost big pharma billions
If medical cannabis was legalized across the US it's estimated there would be a 10% drop in pharmaceutical drug sales
If medical cannabis was legalized across the US it's estimated there would be a 10% drop in pharmaceutical drug sales
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If medical cannabis was legalized across the US it's estimated there would be a 10% drop in pharmaceutical drug sales
If medical cannabis was legalized across the US it's estimated there would be a 10% drop in pharmaceutical drug sales

New research from a team of economists has estimated the legalization of medical and recreational cannabis over the past 25 years has cost pharmaceutical companies billions of dollars in lost sales. And, if the US were to legalize cannabis across the whole country, pharma stocks could rapidly drop by over 10 percent.

Over the last few years, as cannabis prohibitions have gradually lifted across the United States, researchers have chronicled a number of interesting changes in drug use behaviors. For example, several studies have seen a distinct drop in opioid prescriptions after medical cannabis was legalized in a given state. Even more generally, some research has linked access to medical cannabis with an overall drop in prescription drug use.

So a trio of economists, from the California Polytechnic State University and The University of New Mexico, set out to try and quantify the financial impact of cannabis legalization on the pharmaceutical industry. The researchers looked at the impact of medical and recreational cannabis law changes on stock market returns for pharmaceutical companies over the past 25 years.

The study analyzed 45 cannabis legalization events, both medical and recreational, in US states since 1996. The findings revealed stock market returns for a pharmaceutical company dropped by an average of nearly 2% following any cannabis legalization event. Across all pharma companies, the researchers estimated this equaled a drop in annual drug sales of around $3 billion for each individual legalization event.

Speculating into the future, the researchers calculated a nearly 11% drop in total annual pharmaceutical sales if medical cannabis was legalized in the 16 US states yet to make the leap. This equates to a $38-billion drop in drug sales, and that's just based on broader access to medical cannabis.

The study calculates an even bigger impact on pharmaceutical sales when recreational cannabis laws are enacted, compared to when medical cannabis laws are triggered. This suggests the somewhat restrictive nature of medical cannabis cannot account for all the ways people may use cannabis as a replacement for conventional medicines.

“The implied sales decrease from recreational legalization is about 129% greater than that of medical legalization,” the researchers noted in the study. “Comparing effects on generic and brand drugmakers, we find the effect on brand drugmakers is 224% larger than the effect on generic drug maker sales.”

The study does note there is evidence that pharmaceutical companies have recognized this threat from legalized cannabis and begun targeted lobbying to prevent broader legalization. However, the researchers suggest pharmaceutical companies would be better off investing in cannabis markets as opposed to lobbying against legalization.

“The future of cannabis medicine lies in understanding the prevalence and effects of the plants’ components beyond THC and CBD and identifying ways to categorize cannabis by measurable characteristics that are known to yield specific effects,” said study co-author Sarah Stith. “Mimicking conventional pharmaceuticals through standardization may not be the optimal endpoint for cannabis, as the variability inherent in the cannabis plant is likely driving its ability to treat so many conditions.”

The study was published in PLOS One.

Source: University of New Mexico

Congress has known this for decades. This has been a symbiotic relationship that has served both parties well all at the expense of people in American public.
Well duh! Pot because of few bad side effects and some good ones, pot is superior for sleep aids, muscle, some other pains, cramps male and female, convulsions and clearing lungs, among other uses.
That hard drug use slowed is expected as hard drugs stop working for pain and for pain pot if good for, it keeps working and not addictive.
Other just addicts can switch to the far less dangerous pot as has been happening with dangerous alcohol, the most dangerous drug in the world are switching to pot, especially the young.
And all these are good things.
And congress needs to make it legal everywhere so more people don't have to suffer or be addicted this yr or lame duck session and end this needless war on people.
IMHO, overdose-safe drugs (like DMT, THC, LSD, Psilocybin etc) (which are actually safer than alcohol!) legally should/must be treated same as alcohol (which is really just another (similar) kind of drug)!
IMHO, just like prohibition of alcohol had caused so much crime in the past (& that is why it was repealed many years later), prohibition of many similar drugs are causing so much crime today!
We need to take lesson from history & end "War On Drugs"!!
(Not to mention, (according to many medical research) drugs like DMT, THC, LSD, Psilocybin seem to be extremely promising against (major) depression & PTSD!)
(& what benefits alcohol or tobacco have exactly (& yet they are legal)?)
I never could understand why big pharma doesn't just jump on the bandwagon and start producing cannabis??? Then they wouldn't have to continue to block legalization and they would still make money...seems like a win-win to me...Just the same thing with the oil companies, if they had just switched their concentration to green energy back in the 80s, they'd probably be making just as much money now, and we wouldn't be facing such disastrous climate problems...
I think that those companies just want to keep their monopoly on drugs, they can't do that with pot.
Hey, Pot is OK, but should not be legal to anyone under 18. Up till then, one is forming their neurons and learning things that pot may interfere with.
Not cause and effect. Federal and state governments tightened restrictions on opioid prescriptions because of high death rate from over-prescribing. At about the same time, medical use of cannabis was legalized in many states, with much more lax restrictions on prescriptions, and many gravitated to cannabis use when opioids became harder to get, not because it was considered a better alternative.
Wayne Resnick
While cause and effect cannot be measured directly, since there was a substantial effort to reduce opioid use in the same period, we do know that when we look at individual states, the drop in opioid use did occur when cannabis became legal in a given state. There might not be publicly available data on sales volume by state, but the drop in emergency room visits due to opioid overdoses in states where cannabis was legalized is a telling factor. Of course it's theoretically possible that opioid use didn't go down, but cannabis use lowered the chance of overdose from the same amounts. I strongly doubt that that's the case, but it would be relevant in terms of legalization.