Will Big Pharma Suffer Significant Losses with Cannabis Legalization?
Recent report finds the plant could cost Big Pharma billions.
Even in health care, profits are what drive companies. The pills that sell most are highest in demand, the production companies comply, and everyone working in the industry profits from selling medicine to help those that need it. But what if medical cannabis were to become legalized on a national scale - what would happen to the profits of these pharmaceutical companies?
A recent report looked at the numbers, using information the University of Georgia had gathered in regards to prescriptions. The study found a decrease of Medicare prescriptions in states that legalize medical cannabis. The study, first noted by the Washington Post, is what stirred up the debate as to whether the plant could help with the current opioid crisis.
Discover More: Receive a Higher Education at One of These Cannabis Colleges
Losing Billions: A Lot or A Little?
Take into consideration the many ailments cannabis is known to help control and/or treat:
- Anxiety
- Epilepsy
- PTSD (Learn More: Treating PTSD with Cannabis)
- Chronic Pain
- Sleep Disorders
- Nerve Pain
- Glaucoma
- Tourette Syndrome
- Nausea & Vomiting
The list can go on, though these are the major conditions medical cannabis will chisel profits down regarding pharmaceutical sales.
The study went on to find that currently, medical cannabis is costing pill manufactures about $166 million annually. If the nation legalizes medical cannabis, pill manufactures will drop between 4-5 billion in profits annually. While this may sound like a lot, it's a mere 1-2% of the industry's $425 billion market.
Drug giant Pfizer Inc, for example, would lose around a half billion of its $53 billion in annual revenue. While pharmaceutical companies will indeed take a lose, it certainly won't bankrupt them.
Big Pharma will Keep Up with Legislation
Pharmaceutical companies such as GW Pharmaceuticals and Insys Therapeutics have already begun taking steps toward developing cannabis-based medicines. They are waiting for the federal government's next step towards re-classifying the plant, and will take the necessary steps to improve their revenue by joining the industry rather than continuing to suppress it through prohibition.
However, it's important to note that once the federal government gets its hands on cannabis in healthcare and the profits it produces, the entire system that those of us in legalized states have come to know may be completely flipped. Entrepreneurs may find it hard to compete with the government and new laws may shake the foundations of businesses - we must be careful what we vote into place to ensure cannabis's current market doesn't take a dive.