Generic Formulations Provide Colombian Patients’ Access to Medical Cannabis
By Esteban Rossi I., Ph.D., Special Contributor, New Frontier Data
In various jurisdictions worldwide, generic formulations are considered as accepted means to ensure patients’ safe access to medicinal cannabis.
Also known as compounded medications, compounding medications, or unitary doses, generic formulations are unique preparations for specific patients, with each of the formulas being made by a licensed pharmacist in an authorized facility per as directed by a medical prescription incorporating approved ingredients.
In 2020, despite the COVID-19 pandemic, the Colombian agency (INVIMA) tasked with regulating drugs, medicines, and food granted the first batch of authorizations to cannabis companies interested in producing generic formulations. The authorizations or permits are commonly called good elaboration practices (or BPEs, as abbreviated in Spanish).
Later last year, a few pioneering firms obtained approval to prepare and sell cannabis generic formulations in the Colombian market. They included (alphabetically): Avicanna (TSE: AVCN), Clever Leaves (NASDAQ: CLVR), Khiron (CVE: KHRN), Medcolcanna (TSVX: MCCN), and Unidossis.
To summarize how generic formulations benefit patients and the public health system, and to note the most recent milestones of the firms involved, New Frontier Data relied on public information and interviews with company representatives. The summary does not constitute financial advice or endorsement of any kind.
Advances and milestones
Avicanna is focused on developing medicinal products for international markets. As part of its research pipeline, the Avicanna team obtained its BPEs in late 2020, and is currently testing its first batch of generic formulations. Meanwhile, Avicanna has made important progress in two other business lines: plant genetics and seeds, and standardized extracts. Over the past year, Avicanna has sought to position itself in the regional market by selling seeds (in Uruguay and the United States, respectively), while also exporting standardized cannabis oil to Chile.
Clever Leaves continues to focus on the production of active pharmaceutical ingredients (APIs) for international markets. Last June, Clever obtained the European Union’s certification in good manufacturing practices (i.e., EU-GMP) and is thus strongly positioned to become a large supplier of premium ingredients for the pharmaceutical and cosmeceutical markets.
As part of Clever Leaves’ research and development pipeline in collaboration with Alpharma (SAS), the company obtained its BPEs authorization from Invima. Clever Leaves focuses on CBD products for the management of chronic pain, sleep disorders, and anxiety; as of this month, its team had served roughly 200 patients with a 50% adherence to the recommended treatments. In coming months, Clever Leaves aims to place its APIs in foreign markets while developing formulations and products in partnership with local firms. The company aims within the next two years to reach 5,000 patients – though should commercial and distribution restrictions be removed, that patient population could reach 100,000 users.
For its part, Khiron Life Sciences has helped pave the way for the commercialization of cannabis formulations in Colombia. With its clinic, Zerenia, the companies placed considerable resources in three key areas: medical education, patient experience, and research. In collaboration with the Monterrey Institute of Technology (TEC), Khiron offers specialized training for doctors interested prescribing medical cannabis. After completing that training, Zerenia doctors are allowed to tailor cannabis formulations to the unique needs of each patient.
After almost a year in operation, the Zerenia clinic has reached important commercial milestones. As of this month, its two locations (in Bogotá and Medellin, respectively) have reportedly served upwards of 10,000 patients, and distribute more than 300 prescriptions per day.
Patient feedback has been described as positive, with more than 50% of patients returning as the clinic gathers valuable clinical information: For instance, available data shows that most of the patients are older than age 55, and seek cannabis products to manage chronic pain. Among them, 80% of first visits were associated with pain management, and about 45% of patients were prescribed THC products. Other frequently observed conditions reported there include anxiety, depression, and sleep disorders. In the next 12-18 months, Khiron wants to reach up to 100,000 patients while maintaining its current patient adherence. Khiron will meanwhile advance its research program to focus on improving the bioavailability of its formulations, gradually develop new products, and expanding its understanding of cannabis pharmacoeconomics.
Medocolcanna is a vertically integrated cannabis company based in Bogotá, with cultivations operations in various locations. Medcolcanna is a young company which established a solid reputation for careful deployment of resources. Its medicinal business line focuses on the development of generic formulations for rare conditions, including a type of inflammatory bowel disease known as Crohn’s disease.
In September 2020, Medcolcanna signed a joint venture to work with Grupo Curativa (SAS), an interdisciplinary group of scientists experienced in developing cannabis formulations. Through that agreement, Medcolcanna has access to a ready pool of approximately 4,000 patients as Grupo Curativa ensures the provision of generic formulations. In sum, with its solid cultivation operation, established production capacity, and Curativa’s network, Medocolcanna has achieved early positioning in the Colombian medicinal market.
Unidossis is a private pharmaceutical company with 11 years of experience manufacturing controlled substances, over $8 million USD in annual sales (mostly from compounded medications), and a reputation as one of Colombia’s most solid pharmaceutical companies. Unidossis obtained Invima’s BPEs approval in October 2020, and focuses on medical education and building its distribution network. The company offers free medical training to doctors regardless of location and affiliation, working with 150 hospitals and health care providers across the country. Unidossis aims to sell over 50,000 cannabis formulations this year.
While the market for generic formulations remains young, valuable insights have already emerged. First, since patient experience has been overwhelmingly positive, cannabis benefits spread via word of mouth, and demand has grown consistently.
Second, due to their affordability, the magistral preparations are proving to be good business for patients. Currently, the average price of a prescription can range between $43 and $129 USD ($150,000 to $450,000 COP), depending on product concentration and composition. Thus, the cost of cannabidiol (CBD) ranges between $0.07 and $0.15 cents USD per milligram, with the cost of THC ranging between $0.20 and $0.30 cents USD.
However, such prices vary widely, depending on product characteristics and manufacturing scale. In addition, the Colombian government recently included medicinal cannabis in the national health insurance program, so that health insurance now covers authorized cannabis products.
Generic formulations make good business for governments. Since the costs of opiates, painkillers, and other drugs commonly recommended to manage chronic conditions tend to be much more expensive than cannabis generic formulations. Through the government’s facilitating patients’ access to medicinal cannabis, it is saving much-needed resources to strengthen a health care system currently strained by the coronavirus.
Over the next six months, as more empirical data becomes available, New Frontier Data will devise a more precise estimate of the economic impact of the generic formulations on the Colombian health care system.
Barriers and next steps
New Frontier Data asked the companies’ leaders to identify barriers and next steps for Colombia’s segment of the medicinal market. They noted that medical education and training (as well as patient awareness), remain the most pressing challenges since most medical professionals have lacked exposure to medicinal cannabis.
Patients and the public, in turn, exhibit cautious interest in experimenting with novel therapeutic options, but insist on the guidance of trusted medical professionals. With regards to future regulations and government support, founder Felipe de la Vega of Medcolcanna noted that the process to obtain THC quotas remains painfully long, and emphasized the importance of expediting dry flower exports to facilitate the consolidation of the Colombian industry.
In a similar vein, Avicanna’s Lucas Nosiglia noted that few countries in the world can replicate Colombia’s productive capacity, but stressed urgent need for expanded political leadership to make it a long-term national priority.