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The number of new patients trying medicinal cannabis for the first time has risen significantly since Australians first began hunkering down at home to ride out the COVID-19 storm.
According to statistics released by the Therapeutics Goods Administration (TGA), July saw the highest number of Special Access Scheme (SAS) Category B approvals for medicinal cannabis products to date with August coming in at a close second.
A total of 5,564 applications were approved in July while August’s total – 5,270 – is 82.4% higher than the 2,889 approvals recorded a year ago.
While the figures do not necessarily equal the number of patients receiving the medicines, industry expert calculations have forecast the majority of these approvals are for new patients being prescribed medicinal cannabis for the first time.
The news comes as the TGA recently announced an interim decision to down-schedule low dose cannabidiol (CBD) products so they can be purchased over-the-counter at pharmacies – a move that has been seen as a way to make medical cannabis products more accessible.
The change has a proposed implementation date of 1 June 2021.
Speaking with Small Caps, medicinal cannabis industry expert Dr Sud Agarwal explained some of the reasons for the recent ramp up in new patient numbers and how the industry is becoming increasingly driven by the consumer.
Dr Agarwal is the co-founder and chief executive officer of Australian medicinal cannabis ancillary services provider Cannvalate and serves on Incannex Healthcare’s (ASX: IHL) board as a non-executive director and chief medical officer.
Up to 31 August 2020, the TGA has approved more than 61,000 SAS Category B applications for medicinal cannabis products, with the last two months being the busiest months for approvals to date.
Approvals surpassed the 3,000-mark last October, then jumped to more than 4,000 from May this year.
According to the TGA, applications were approved to use medicinal cannabis for a range of indications including cancer pain and chemotherapy-induced nausea and vomiting, paediatric epilepsy, palliative care, neuropathic pain and spasticity from neurological conditions.
However, approval numbers do not equal the actual number of patients receiving the medicines, due to several reasons including the possibility of repeat applications or separate approvals for multiple products. The approvals also don’t indicate whether the patient has accessed or continues to use the treatment.
“A number of patients don’t actually pick up the product – they might get approved and then get to the pharmacy counter and it’s too expensive, so they don’t get it,” Dr Agarwal said.
“The actual number may be a bit less. Then, a number of those are repeats – patients who had it six months ago and have come for their next SAS approval,” he added.
Dr Agarwal said Cannvalate experienced a pivotal point in March, when the number of new prescriptions crossed the 1000 new patients per month mark – just as states around Australia started to close borders, increase restrictions, and encourage people to stay at home.
“That’s over 1,000 prescriptions that were filled by new patients who have never had medicinal cannabis before – in addition to the existing backlog,” he said.
According to Cannvalate’s calculations, the prescribing network is serving about 40-50% of Australia’s medicinal cannabis patients.
“It’s a big ramp up… For one company, Australia-wide, that share of the market is pretty substantial,” Dr Agarwal said.
He also noted that the company had been recruiting a new staff member a week, many who had to be trained to work remotely due to the COVID-19 containment measures in place at the time.
Dr Agarwal said one reason for Cannvalate’s spike in patient numbers is attributed to the increased uptake of telehealth services.
“People couldn’t get in to see their normal doctor because most of them were closed [due to COVID-19] so they began using telehealth services,” he said.
In March, Australia’s health minister Greg Hunt announced the expansion of Medicare-subsidised telehealth services to provide continued access to essential health services during the pandemic.
While the move accelerated the technology’s deployment across Australia, Dr Agarwal said Cannvalate was already using telehealth and video consultations about 95% of the time.
“Telehealth is now the preferred method of most patients; less than 5% of our prescriptions are face-to-face. Cannvalate is perfectly suited for the COVID-19 environment because patients want to do everything over the phone or through video connection,” he said.
In addition, Dr Agarwal said people had time to research and consider what forms of treatment they would like to try while they were largely at home.
“Those people who were probably on the fence with starting medicinal cannabis were given the time to try it. Restrictions that were on them were not there – they didn’t have to [go into] work, they didn’t have to drive, so they were more willing to give it a shot and see if it works,” he said.
According to Dr Agarwal, Cannvalate uses a “high touch point” care model that ensures a high-quality service with around-the-clock access to medical professionals.
“It is very automated. If you were prescribed a product on the first of the month, we would have a follow-up call on the second and third, where the pharmacist will ramp up the dose of your product to make sure it meets your needs and is efficacious,” he said.
“They’ll typically follow up at 25-30 days to see whether that initial benefit is now being maintained. Then, they will follow up again typically 50-60 days to see if you need to have your product renewed because you’re going to be running out soon,” Dr Agarwal explained.
“The initial consult will be with a doctor and the rest will be pharmacists or other allied health staff,” he added.
Dr Agarwal said the reason Cannvalate has adopted this “high touch point” care model is because medicinal cannabis patients are generally an “engaged, proactive and informed” group that want this high level of service.
“The ‘treat and street’ model of conventional methods doesn’t work for this group,” he said.
“These patients are very different to say, diabetic or asthmatic patients. They are super informed about their own health and know every single inside detail of the meds they are on.”
“Secondly, they are usually very proactive and used to fiddling with their own doses on a day-to-day basis. They instinctively know what timing works for them, what foods they need to avoid – they’ve chopped and changed and tried things,” Dr Agarwal said.
He said another trait of the patient group is its surrounding community.
“People who are on medicinal cannabis products are often in communities with other people who use them. There’s this peer-to-peer spread,” Dr Agarwal said.
This proactive patient group is also one reason why the medical cannabis industry is changing from being cultivator-driven to consumer-driven.
From a cultivation perspective, the world is now facing a global oversupply of medicinal cannabis. Major companies like Canopy Growth Corporation (TSE: WEED) and Aurora Cannabis (NYSE: ACB) have closed down greenhouse facilities and pulled out of international markets.
Australia is one of two developed world markets (along with Germany) that have bucked the trend, although Australian cultivators have experienced challenges and have been unable to compete with imported products.
Dr Agarwal said companies have been “chasing the wrong dream” by trying to be the first to get a cultivation licence and should have focused on the consumer.
“All people care about now is who is consuming the product, who is engaging with them and who is offering the best service available,” he said.
Dr Agarwal noted companies such as Althea Group (ASX: AGH) and MGC Pharmaceuticals (ASX: MXC), which abandoned their growing ambitions and are now focused on capturing as many patients as possible.
“If you own the consumer, you kind of own the cannabis dollar,” he said.
Dr Agarwal listed four factors where the consumer, instead of the manufacturer, dictates the product direction: taste preferences, unit sizing, product and the target price point.
“People are often very keen to give feedback on what they would like from their product,” he said.
“Many of them want to disguise the earthy taste you get with original cannabis, or mint flavoured is a common request. Many of them want it more of a watery consistency instead of an oily consistency; they want better droppers.”
“If you’re on blood pressure tablets you don’t generally write to the manufacturer and ask them to make a strawberry flavoured one,” Dr Agarwal noted.
“It’s a paradigm shift in healthcare. I’ve never seen anybody who takes [the male enhancement drug] Lipitor wear a t-shirt that says, ‘I love Lipitor’, but there’s a lot of people with t-shirts or caps saying ‘medicinal cannabis changed my life’,” he added.
The medical cannabis industry could also change some health insurance funding models.
As medicinal cannabis is not listed on the Pharmaceutical Benefits Scheme (PBS), it is not subsidised by the Australian government and costs must be fully met by the patient.
The majority of Australian private health insurance companies currently don’t cover medical cannabis products as a non-PBS prescription, but some have said they may change tack in the future.
Dr Agarwal revealed Cannvalate is currently in discussions with a large private health insurance company about creating a flat rate funding model, which may involve patients paying a monthly or annual fee to their insurer that includes medicinal cannabis prescriptions.
“That might be the first onset of that insurance-based model. We’ll see if we can deliver it at the price point they want, but all eyes are on that,” he said.
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