Insurance rule ‘a billion-dollar shot in the arm’ for Colombian cannabis market

Colombian insurance providers are now required to cover the costs of high and low THC medical cannabis prescriptions, a move companies operating in the country say could represent a “billion-dollar shift” in the national market and perhaps lay down a marker other countries could follow.

Colombia, which legalised the production of medical cannabis in 2016, has emerged as a leader in Latin America in implementing regulation to develop the market. That includes a decree signed by president Iván Duque last year to allow for the export of dry cannabis flower.

The inclusion of medical cannabis in mandatory health coverage plans throughout Colombia is another step towards the creation of a robust national market, according to comments by Khiron Life Sciences and Flora Growth, both of which have operations in the country.

“This provides an example to the world that insurance providers should be helping consumers pay for this important medicine needed for their health and wellness management,” Luis Merchan, president and CEO of Flora Growth, told CBD-Intel. “This new regulatory requirement for insurance companies represents an eventual billion-dollar shift in the value of the Colombian cannabis market.”Neidy Girado

 

Expected boom in prescriptions

 

Colombia has around 6m potential patients for medical cannabis products and more than 97% of the population is covered by health insurance, according to Merchan.

The regulatory change which came into effect on 1st January adds high and low THC medical cannabis to the list of mandated covered medications for every insurance provider in Colombia. It is expected to result in exponential growth in cannabis prescriptions this year, according to Khiron, which in 2020 became the first licensed producer to sell medicinal cannabis to patients in national clinics.

To date, Khiron has filled more than 57,000 prescriptions to more than 16,000 individual patients, a number the company anticipates could proliferate with the recently approved regulation.

“Starting 1st January, any patient in Colombia will be able to get their medical cannabis medication almost free of charge, regardless of the insurance company they are subscribed to,” said Khiron’s CEO Alvaro Torres. “This unprecedented regulatory framework update will create one of the largest insured markets for medical cannabis in the world and help position Khiron as a leading company in this industry worldwide.”

 

The example of Germany

 

The move by Colombia to include medicinal cannabis coverage in national insurance plans follows similar policies implemented in Germany, for example, which in 2017 authorised doctors to prescribe medical cannabis covered by national health insurance to treat a range of health conditions. Coverage of medicinal cannabis by German health insurance providers exceeded €165m in 2020 and the country has become the world’s second largest importer of medicinal cannabis.

Both Khiron and Flora forecast similar growth in the Colombian market.

“Flora Pharma intends to work closely with government regulators as well as academic institutions to initiate studies in order to reduce costs and efficiently move through drug development and commercialisation activities globally,” Merchan said. “The division intends to honor the traditional US FDA [Food and Drug Administration] and UK NHS [National Health Service] routes to ensure the consistency and quality of cannabinoids for specific disease conditions, with an initial focus on fibromyalgia, brain health, pain, and related research.”

Khiron added that the regulatory change in Colombia will “significantly improve the current insurance coverage process, simplifying the procedure and reducing approval times for patients to obtain insurance coverage across the country”.

Adam Williams CBD-Intel contributing writer

Photo: Neidy Girado

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