Medicinal cannabis in Germany - Business Report

175 Confidential __________________________________________________________________________________ Per 1,000 patients = 360 kg = 4.320.000 Euro Per 10,000 patients = 3.600 kg = 43.200.000 Euro Per 100,000 patients = 36.000 kg = 432.000.000 Euro With an estimated 800,000 patients in Germany, this would be 288 tons per year or 3.456 billion euros. These are almost unbelievable projections and the health insurance companies will exert their influence that this will not happen, because that would be 11% of the total drug expenditure for 1% of the population! Even if prices were to fall due to rebate contracts and intensive cut-throat competition among sup- pliers, a fictitious price of 1 euro per gram would still result in a market size of 288,000,000 euro. While the exponential increase in Cannabis prescriptions is still quite understandable , this is not true for the exponential growth in SHI expenditure on Cannabis derived from it. On the one hand, the increasing competition among producers and distributors of raw materials for preparations will cause their prices, and thus also the pharmacies' tax values, to fall. A first step towards limiting the taxable values was taken with the recently adopted GSAV, as the percentage-based prescription surcharges that have applied up to now are to be replaced by a flat-rate surcharge in future. The German govern- ment expects these measures to result in savings for the SHI system of about 25 million. Moreover, the statutory health insurance funds will not stand idly by and watch an unchecked in- crease in expenditure on Cannabis drugs and will in future enforce price reductions directly (in negoti- ations) or indirectly (through fixed amounts and/or discount agreements). 11.8 Trend projections of the Cannabidiol (CBD) sub-market Cannabidiol will develop into one of the most important growth drivers in the Cannabis market. Cannabidiol has a pleiotropic effect, which means that effects as well as side effects can be triggered by different pathways. For this reason, the mechanism of action is not yet known exactly. However, an effect on the voltage-controlled ion channel VDAC1 (voltage-dependent anion-selective channel pro- tein 1) on the mitochondria is assumed. The immunosuppressive effect of Cannabidiol is based on apoptosis of T-lymphocytes of the immune system. Unlike Tetrahydrocannabinol (THC), Cannabidiol is not a narcotic. Cannabidiol has antiepileptic (an- ticonvulsant), anxiety-relieving, neuroprotective, antipsychotic, anti-inflammatory, antiemetic and an- tioxidant properties. In contrast to (THC) it is not psychoactive (euphoric). Cannabidiol is a multi-target drug. The effects are attributed to the interaction with different systems. These include the ENT trans- porter, the GPR55 receptor, serotonin receptors (5HT1A), PPAR receptors and the TRPM8 channel. Cannabidiol is registered under the name Epidyolex in the USA and in the EU as a prescription drug for the treatment of rare forms of epilepsy (Dravet and Lennox-Gastaut Syndrome) in children. Also, in Germany, Cannabidiol for use as a medicine (e.g. "Oily Cannabidiol Solution NRF") is available only on prescription. The standardised whole extract from the Cannabis plant, Nabiximol (trade name: Sa- tivex®