Australian medicinal cannabis industry update

Key developments could increase medicinal cannabis market 7 min read

There have recently been two key developments in the cannabis industry in Australia – the Therapeutic Goods Administration (the TGA) has made its final decision to down-schedule certain preparations of low dose cannabidiol (CBD) from Schedule 4 (prescription medicine) to 3 (pharmacy only medicine), and the Federal Health Minister has announced Pharmaceutical Benefits Scheme (PBS) listing of medicinal cannabis medicine Epidylex – a historic first.

These significant developments have the potential to increase consumer access to medicinal cannabis, and the growth of a high-potential market in Australia.

Key takeaways

• To realise the potential of these new developments to expand the medicinal cannabis market, products need to meet the requirements of Australian Register of Therapeutic Goods (the ARTG) registration, key to which is establishing efficacy. Proven efficacy is also relevant to seeking reimbursement for prescription medicines.
• Based on the current regulatory framework, businesses intending to import, manufacture and supply medicinal cannabis products in the Australian market should consider how Schedule 3 criteria – including daily dosage limits – will impact product development, and what clinical trial data and evidence are required to support an ARTG application.

Who is this relevant to?

Australian and foreign cannabis and pharmaceutical companies seeking to enter the Australian cannabis market through the manufacture, import or supply of medicinal cannabis products.

Development #1 – down-scheduling CBD

Our November 2020 Insight looked at the TGA's proposal to down-schedule certain CBD preparations from Schedule 4 (prescription medicines) to Schedule 3 (pharmacist only medicine). In December 2020, the TGA announced its final decision to so. 

Original scheduling of CBD

Cannabis was originally in the Commonwealth Poisons Standard on Schedule 8 as a controlled substance, and CBD was on Schedule 4 for therapeutic use where the cannabinoid content, a group of closely related compounds, comprises ≥98% of CBD (a type of cannabinoid) and ≤ 2% of any other naturally occurring cannabinoids.

Schedule 4 CBD products are only available on prescription from an Australian-registered medical practitioner. ARTG registration for a product is a precondition of prescription. This requires evidence of efficacy for an intended use, as well as demonstrated safety and quality.

However, with only two registered cannabis products – GW's Pharma's Sativex nabaximols product (for multiple sclerosis), and now GW Pharma's Epidyolex CBD product (for seizure therapy) registered in September 2020 – patient access to medicinal cannabis through this pathway is presently limited.

Unapproved cannabis products can only be accessed by the Special Access Scheme (SAS), Authorised Prescriber (AP) scheme or clinical trials. Unless the patient is seriously ill, clinicians applying for TGA permission to use the SAS pathway to prescribe medicinal cannabis must demonstrate that conventional treatments have been unsuccessful or are inappropriate.

Down-scheduling of CBD

Following a public consultation, and an interim decision, in December 2020 the TGA released its final decision to down-schedule CBD.

While cannabis and CBD are still on Schedules 8 and 4 respectively, Schedule 3 has now been amended to include low-dose CBD, which permits the sale to adults without a prescription of oral, oral mucosal and sublingual (under the tongue) CBD formulations, included on the ARTG, which satisfy the following criteria:

• the CBD is plant derived, or when synthetic only, contains the (-) CBD enantiomer;
• the maximum recommended daily dose of the product is ≤ 150mg of CBD;
• supply is in packs containing not more than 30 days' supply;
• the cannabinoid content comprises ≥98% CBD and ≤2% of other naturally occurring cannabinoids of which tetrahydrocannabinol (THC) can only comprise 1% of the total cannabinoid content; and
• the product is packed in a blister or strip packaging, or in a container fitted with a child-resistant closure.

Other formulations such as gels, oils or vaporised products are therefore excluded.

Establishing efficacy – the next challenge

In making this decision, the Delegate sought further advice from the Joint Advisory Committee on Medicines and Chemicals Scheduling.

The Joint ACMS-ACCS Committee confirmed that the dosage cut-off, which was originally proposed to be ≤ 60mg, should be reassessed based on available safety data. The Delegate revised the maximum recommended daily dose to ≤ 150mg, having regard to public submissions that the proposed dose of 60mg is potentially sub-therapeutic. Given the requirement to establish efficacy, this may present a barrier for sponsors seeking to register a Schedule 3 preparation. In revising the dosage level, the Delegate relied on a recent systematic review of clinical trials, which concluded that CBD is well tolerated across a wide range of dosages,¹ as well as other publications² and reports.

Following the advice of the Joint ACMS-ACCS Committee, the final decision confirmed that Schedule 3 CBD products must be included on the ARTG. Such products would need to be registered on the ARTG and approved for a specific indication, which means it still would need to undergo a pre-market assessment of safety, efficacy and quality at the daily dosage level of ≤ 150mg.

Alternatively, instead of registration, it may be possible to apply to the TGA to amend the Permissible Ingredients Determination to extend the current permission to CBD, to enable listing. This does not require a TGA evaluation but the sponsor must nevertheless certify safety, quality and efficacy. However, the Joint ACMS-ACCS Committee has said that it is premature to down-schedule CBD before a suitable preparation is included in the ARTG, and so it may be unlikely the TGA would extend the Permissible Ingredients Determination at this point in time.

In our previous Insight, we expressed the view that the ARTG registration criteria – currently recognised as posing regulatory hurdles for Schedule 4 products – would not only persist in relation to Schedule 3 but could be exacerbated by the dosage restrictions for Schedule 3.

Increasing the maximum daily dosage to 150mg has the potential to overcome this barrier but it will ultimately depend on whether efficacy for an indication can be clinically proven at this maximum dose.

Thus, despite the TGA's final revised decision, down-scheduling CBD to Schedule 3 may not have the immediate effect of facilitating greater patient access to CBD products, and opening or accelerating the medicinal cannabis market in Australia. There are currently no TGA approved products on the ARTG that meet the Schedule 3 criteria.

Development #2 – historic first PBS listing

Following the TGA's final decision, on 30 April 2021, Health Minister Greg Hunt announced PBS listing of Epidyolex for a rare form of epilepsy – Dravet syndrome. It is a new treatment used in combination with at least two other anti-epileptic medicines on the PBS. Epidyolex is the first medicinal cannabis drug to be subsidised by the PBS.

As a result of PBS listing, instead of paying $24,000 a year, patients will now pay $41.30 per script or $6.60 for concession card holders. PBS listing of Epidyolex removes some of the hurdles to accessing medicinal cannabis, including patient costs that have been reported in the Senate Inquiry report, which we canvassed in our Insight. It is a step towards accelerating patient access to medicinal cannabis products in Australia.

Interestingly, the announcement reported that there had been very few well-designed clinical trials and that 'the evidence to support its use in the treatment of certain childhood epilepsies is the strongest.'

Government reimbursement is only available for prescription medicines. Thus, Schedule 4 prescription CBD medicines, but not Schedule 3 CBD preparations, would be eligible.  

The future of the medicinal cannabis industry in Australia

Based on the way that CBD is currently regulated, supply of a CBD product in Australia, outside the SAS and AP scheme and clinical trials, requires that the product be registered on the ARTG with proven efficacy for a particular indication. Proven efficacy is also relevant to seeking reimbursement from the Australian Government on the PBS, as it is only available for prescription medicines.

Down-scheduling of CBD from Schedule 4 to Schedule 3 and the PBS listing of Epidyolex are steps towards increasing consumer access to cannabis and realising the potential for this important market in Australia. However, sustained growth will ultimately depend on whether products with proven efficacy are developed and available.

Based on the current regulatory framework, businesses intending to import, manufacture and supply cannabis products in the Australian market should consider how the Schedule 3 criteria – including daily dosage limits – will impact future product development, and what clinical trial data and evidence are required to support an ARTG application.