New Zealand finalises medical cannabis regulations
Today the Misuse of Drugs (Medicinal Cannabis) Regulations 2019 were published, setting out the regulations for a New Zealand cannabis industry and making significant changes to patient access. Here are the major features of New Zealand’s new scheme:
Improved patient access
Firstly, NZ doctors have been prescribing a variety of imported cannabis medicines for a few years. These new regulations amend the existing patient access framework. Historically, only specialist doctors have been able to prescribe THC-containing products, and even then only after ‘ministerial approval’ (similar to Australia’s SAS-B system). GPs have been able to prescribe CBD without specialist support and without ministerial approval since late 2017.
The new regulations will mean that GPs and specialists can prescribe any type of cannabis product (so long as they meet newly imposed quality standards) without needing ministerial approval. That’s a big, progressive change to patient access. But only products that meet GMP and other quality and safety standards will be available for prescription. The same standards apply to locally-manufactured products.
THC prescriptions to increase
Some new patient access figures have also been released by the NZ government. Here are the number of prescriptions written for unapproved medical cannabis products in NZ up to July 2019. These are from a recently published Treasury document, and we’ve added some rough calculations on how this breaks down on a monthly basis:
|2017 (Sep-Dec)||2018 (Jan-Dec)||2019 (Jan-July)|
|Average prescriptions per month||13.2||195.5||384|
So it’s likely that by now there are ~500 prescriptions being written per month. But it’s heavily skewed towards CBD products due to those restrictions we just discussed. That will start to even out as more GPs start prescribing THC-containing products.
No govt subsidy, but yes prescriber education funding
Similar to Australia, these products are not going to be subsidised by the government, so Kiwis can expect to pay $10-$15 per day for their cannabis medicines. But the Ministry of Health has asked the government to kick in NZD$650,000 to fund educational programs for prescribers, which is commendable. This is something we have not had in Australia, and it’s been to our detriment. In fact, it’s one of the key issues being addressed in our upcoming Senate Inquiry into patient access.
There are also details on the kinds of commercial licenses that the government will be issuing to authorise cultivation, manufacture, supply, research and plant nurseries. You can read through the nitty gritty details in your own time, but here are some interesting takeaways:
Over 100 NZ commercial license applications expected
When Australia went through this process in 2016, the government set up the licensing scheme, associated fees, and size of the regulatory body on the assumption that a few dozen applications would be made for cultivation and manufacture licenses. We ended up with hundreds. The Kiwis, on the other hand, already know they’ll get at least 110 applications.
Like Australia, the NZ licensing system is intended to recover costs from industry. Here is their licensing fee structure:
|Activity assessed||New or renew pre-screening fee||New or renew medicinal cannabis license fee||New activity fee||Renew activity fee||Total new fees||Total renew fees|
|Research||345||2,855||No fee||No fee||3,200||3,200|
|Possession for manufacture||345||2,855||3,105||2,645||6,305||5,845|
What this means is that a totally vertically integrated company doing everything from nursery cultivation through to finished dose supply and human clinical research should expect to pay NZD$31,669 in licensing fees in the first year and NZD$28,709 in the second year (assuming a standard 12 month license duration). So for the first 24 months you’d expect NZD$60,408.
Here is Australia’s current licensing fee structure:
|Activity||License application fee||Permit application fee||License variation fee||Permit variation fee||Estimated inspection fees||Annual charge||**Total annual estimate|
|Manufacture||No fee||No fee||No fee||No fee||No fee||No charge|
|*75% discount on license application fees made concurrent with cultivation application|
|**Assuming one license application, two license variations, two permit applications and two permit variations|
NZ license half cost of Australia
There are some nuances here, but basically it would be fair to say that a similar company (doing everything from cultivation to finished dose supply) in Australia would expect to pay at least AUD$50,000 per year in fees and charges. And there’s no discount on the second year, so 24 months would exceed AUD$100,000. That makes New Zealand about half as expensive as Australia in terms of industry licensing.
And those prices are going up very soon. Turns out AUD$50,000 per year is not enough money to fund the Australian regulator. This is for a number of reasons, including that they continue to be swamped with many more applications than they ever expected.
Maybe the New Zealand regulators are already twice as good at their job as the Australian regulators. Maybe their licensing requirements will be much simpler and easier than Australia’s. Or maybe they’ve under-priced themselves and we’ll end up with a repeat of the Australian experience. Here’s hoping it’s one of the first two!
FreshLeaf Analytics, a division of Southern Cannabis Holdings, is the leading supplier of data about the medicinal cannabis industry in Australia. We have access to medicinal cannabis product, pricing and clinical data sets from some of Australia’s leading healthcare companies and organizations including healthcare clinics, pharmacies, product suppliers and the TGA. The FreshLeaf Analytics team provides custom research, analysis and consulting services in the Medicinal Cannabis market in Australia. The FreshLeaf Analytics team can be contacted on +61 2 8203 8741 or [email protected]