London-based GW Pharmaceuticals announced it will charge $32,500 a year for its new epilepsy drug, Epidiolex.
While that price tag seems high, CEO Justin Gover told The Wall Street Journal that the price is in line with other brand-name epilepsy medications.
Epidiolex, the first cannabis medicine to win approval from the U.S. Food and Drug Administration, treats two rare types of epilepsy.
Before doctors can prescribe the drug, it must be rescheduled by the U.S. Drug Enforcement Administration. That decision is expected by September.
Even assuming the DEA removes Epidiolex – and potentially other formulations of CBD – from its Schedule 1 status, most patients won’t be able to access it. Insurance companies and the federal agencies that set Medicaid and Medicare reimbursements must also decide whether to cover it.
If those companies and agencies opt to exclude coverage, the price tag may place the new treatment out of reach for many.
In a call with analysts this week, an executive with GW’s North America unit said that out-of-pocket costs for patients taking Epidiolex could range from $5 to $10 a month for those in state Medicaid programs to $200 a month for some private insurance plans. Uninsured patients may qualify to receive it free from the manufacturer.
GW Pharmaceuticals will have exclusive rights to the drug for at least seven years because the FDA designated it as a “orphan drug” – a treatment with limited profit potential because the conditions it treats are rare.
That exclusivity has other CBD producers worried that regulators or the company may try to drive other CBD products off the market.
While GW has said it has no plans to do so, the broader hemp and CBD industries are still keeping a nervous eye on developments.
GW Pharmaceuticals trades on the Nasdaq as GWPH.
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