Has GW Pharmaceuticals – Now Jazz Pharmaceuticals – Knee-Capped The CBD Industry?

WITH the fast-growing CBD sector tied up in a regulatory quagmire hundreds of transatlantic industry players face an uncertain future.

However, one UK company – the one which pioneered the medical use of the cannabis extract cannabidiol – will have an all together different take on events.

GW Pharmaceuticals, which was bought by Irish firm Jazz Pharmaceuticals for $7.2bn in 2021, launched its CBD-based drug Epidiolex in 2018 (it’s known as Epidyolex In Europe).

And, as it spent millions of dollars on lobbying activities, a series of events have unfurled which could eventually see it come to dominate the CBD sector.

CBD – It’s Now A Novel Food

In 2019, the year after Epidiolex’s US approval, European regulators corralled CBD into the Novel Food platform and recent events indicate further regulatory interventions are imminent.

While the European Union had indicated Novel Foods would be the pathway for consumer CBD since 2015 this move did play into GW’s hands.

Both European and UK regulators are still waiting for the industry to provide proof that ingestible, plant-based CBD is safe.

And, with this beginning to look increasingly difficult, there is a growing possibility consumer-focused CBD will be channelled down a medical pathway.

These European events are being mirrored in the US where its Food and Drug Administration (FDA) recently declared that CBD can no longer be regarded as a food supplement.

Is this all pure coincidence, or are we witnessing other factors at play?

‘We Need To Stop This’

It’s the latter, according to Steve Oliver, founder and co-director of the UK-based Canna Consultants. He told BusinessCann: “GW saw the CBD industry start to take off, and they must have thought we need to stop this.”

CBD was first discovered in 1940 and it was GW, in partnership with the University of Reading, near London, that first explored its medical potential in reducing epileptic seizures in 2010.

In 2014, it raised over $148m from US investors to advance its treatment for the use of CBD in treating severe childhood epilepsy.

After extensive trials, the FDA approved Epidiolex to treat two rare and severe forms of epilepsy, Lennox-Gastaut syndrome and Dravet syndrome, in patients over the age of two.

Also in the US, around 2012, parents of children with epilepsy were finding ways to secure CBD – which had become known as ‘Hippies Disappointment’ due to its non-psychoactive properties – to treat their offspring.

These developments led to the rapid growth of the CBD wellness industry on both sides of the Atlantic. It is currently valued at over $6bn in the US and €1.7bn in Europe, says Prohibition Partners in its latest analysis.

Harmful CBD?

Shortly after its designation as a Novel Food In Europe in 2019 the UK’s Committee on Toxicity (CoT), which advises CBD regulators the Food Standards Agency (FSA), were tasked with developing a ‘scoping paper on the potential adverse effects of CBD products’.

Sitting in a CoT meeting discussing these were representatives of GW, and, sections of the resulting CoT report into the potential harm of CBD were lifted verbatim from GW’s submissions to it.

In fact, the CoT report relies heavily on data provided by GW and includes findings from studies where the dosage of CBD given to participants reached 20mg per kilogram of body weight.

The CoT concluded that CBD poses risks to health including the potential for liver damage and somnolence, even though the GW data was derived from doses in significant magnitude to the recommended daily intake of CBD which in the UK currently stands at 70mg – or one mg per kg of body weight.

Following a series of rodent trials The European Industrial Hemp Association (EIHA) has lowered its recommended upper daily limit to 17.5mg (milligram).

The upshot of CoT’s findings were that the FSA now requires participants wishing to remain in the industry to provide evidence on the safety of CBD.

And, three years down the line – and despite millions of pounds being spent to allay these fears – the industry has yet to satisfy both UK, and European regulators.

Mr Oliver said: “GW were not prepared to provide the CoT with access to all of its study reports, only a select few chosen by GW.

“These reports each raised issues of safety, without indicating whether the issues were explainable or repeated subsequently.

“The selection certainly suited GW’s aims in getting the regulator to view the safety issue as a detrimental factor for CBD as a food.”

WHO – CBD Is Safe

In November 2017, the World Health Organisation Expert Committee on Drug Dependence reported that CBD ‘does not appear to have abuse potential or cause harm’.

Its paper was based on a review of the existing literature and concluded it should not be re-classified as a harmful substance.

However, in responding to these findings, and, in a submission to the FDA in 2019, GW referenced its own research and pushed back on WHO’s findings.

This lobbying document contends that ‘the WHO report on CBD actually supports a deliberative scientific process and a cautious approach by the FDA’.

It goes on to say that it ‘supports the conclusion that the FDA should exercise caution when considering parameters for CBD to be sold as mass-market consumer goods’.

Over $2m US Lobbying Spend In 2019

Around this time, through its US subsidiary Greenwich Biosciences, GW had registered to lobby in all 50 states – it spent nearly $2m in 2019 lobbying Congress.

And, it is from Congress that the FDA is now looking to for direction on how to deal with CBD.

On January 26, this year, the FDA concluded that ‘a new regulatory pathway for CBD is needed that balances individuals’ desire for access to CBD products with the regulatory oversight needed to manage risks’.

And, in utterances similar to the CoT in the UK, and with reference to GW, it said that using the ‘Epidiolex data…as well as studies both conducted and commissioned by the agency… it is not apparent how CBD products could meet safety standards for dietary supplements or food additive’.

The US Hemp Roundtable, which represents many CBD companies, said that it is ‘extremely disappointed’ by the FDA’s decision and accused it of relying on studies – including the Epidiolex ones – that only show risk at large doses that are not common in retail CBD products, adding that quality and safety measures are already in place in the industry.

Patent Problems 

In 2021, the FDA had referenced Epidiolex when rejecting applications from CBD companies Charlotte’s Web and Irwin Naturals for New Dietary Ingredient notifications for full-spectrum CBD extracts.

It said that as CBD is the active ingredient in the approved prescription drug Epidiolex it cannot be marketed as a dietary supplement.

Since the January 26 announcement Jazz has registered to lobby Congress on its deliberations saying: “We believe patients and their families are best served by medicines that have been proven safe and effective through a robust drug development program and are manufactured to the highest standards to ensure consistent quality and identity.” (See Jazz’s responses below)

These developments had closely followed an announcement by Jazz that it had launched a series of actions against a number of pharmaceutical companies accusing them of infringing its Epidiolex patent, which it is claiming lasts until 2039.

This is not an unusual step for a pharmaceutical company to take when looking to protect its patents – GW has over 150 patents on the cannabis plant.

France & Brazil

Further evidence of GW’s ability to influence national regulators emerged in Brazil late last year where Epidiolex formed the basis for the Government’s decision to prohibit the prescription of ‘raw’ cannabis.

Portuguese cannabis publication CannaReporter reports that Resolution 2324/2022, will ‘prohibit Brazilian doctors from prescribing CBD for any therapeutic indications other than those for which Epidiolex is prescribed’.

The French CBD industry has emerged successfully from a challenging period which included the KanaVape case and the ban on the sale of CBD flowers, which has now been lifted.

While Epidiolex has been available in France for a few years, Jazz is now taking a further interest in the French market following the launch of the country’s medical cannabis trial in 2021.

It recently joined a working group launched by the General Directorate of Health which met for the first time in December last year.

This working group currently includes the medical cannabis companies supplying the French trial including Canadian producers Aurora and Tilray, Israel’s Panaxia Pharmaceuticals and Australia’s Little Green Pharma.

Benjamin Alexandre-Jeanroy, of Paris-based Augur Associates, is concerned that, as the French and European medical cannabis markets develop, pharmaceutical companies such as Jazz will alter their profile and stifle competition.

He said: “Jazz is trying to restrict the access of extracts to a solely pharmaceutical model, but is this the right path for cannabis as its focus is on patenting a plant?

“The question for the medical cannabis companies is whether they can come up with a more viable model. One which is in the interests of patients; one which allows for personalised treatment and choice.”

He highlighted how Jazz has deep pockets saying this level of capital is not yet available to most medical cannabis companies.

‘Working The Innocent Idiots’

Mike Morgan-Giles, Chief Executive of the UK Cannabis Industry Council said: “We would like to see the pharmaceutical sector working with the wider cannabis industry to help everyone. This is not a zero sum game and we should be working collaboratively.”

Nick Moreland, CEO of transatlantic CBD company Tenacious Labs and Co-chair to the UK All-Party Parliamentary Group on CBD would similarly welcome such a development.

However, he contends that Jazz is intent on consuming all of the CBD cake in moves he branded as ‘unfair’.

“GW, with Jazz behind them, are the single, best organised entity in the cannabis space and they come with a specific and narrow point of view.

“And the reason they attract such negativity is that they would rather have a large part of the small cake rather than part of a larger one.

“They don’t have a good reputation for playing nicely, or fairly… so some of the science that is being relied upon has been captured by people who are ahead of the game in presenting what’s going on, by people, who are very good at working the innocent idiots. They have not been a force for good.”

He went on to say that GW/Jazz has done a ‘good job defending its interests in a sector which is dominated by them but in doing so they are spoiling an entire industry from coming into being’.

“Based on the Colorado model the industry in the UK could create over 500,000 jobs and £5.5bn in annual tax revenues. But the reality of the dead hand of behind the scenes politicking, of trying to kill things at every stage in order to have an isolate-based industry with a few hundred jobs is pretty depressing,” he added.

This single-minded approach sees Jazz skip opportunities to engage with the wider industry with a number of representative bodies saying their attempts to open a dialogue have been met by a mute response.

CBD To Become A Medicine?

The FDA has identified the medical route as a pathway for the US CBD industry, and the EU has once more halted the Novel Food process as it remains concerned about the safety of CBD

In the UK, a 2021 report, which has yet to be acted on by the current Government, suggested that CBD should be considered as an over the counter (OTC) medicine.

While popular OTC medicines such as painkillers and cough medicines are widely available, if this turns out to be the case for Epidiolex it will play into the hands of Jazz.

Mr Oliver added: “With Jazz looking to maintain its patents out until 2039 there is a strong possibility that it will dominate the CBD industry for the next decade.

“This will have a major impact on the CBD sector; which will become dominated by Jazz and this will leave only those with very deep pockets and the ability to counter its aggressive moves through the courts.”

Taking the UK as an example he added: “If things continue unchallenged CBD will increasingly come under the auspices of the Department of Health and Social Care and Medicines and Healthcare Products Regulatory Agency and only be available as an OTC isolate with absolutely no trace of THC allowed.”

Mr Moreland added: “The absence of a clear definition of what is a genuine medicine and what is people trying to lever a legitimate line of argument in medicine into areas where it doesn’t apply, but it hangs together well, is of concern.”

One other senior UK industry figure, who chose not to be named, added: “If Jazz spent over $7bn on GW they will want to make it back, so their modus operandi will be to stifle the competition, and maintain a monopoly.”

GW’s substantial investment in its two cannabis medicines – Sativex and Epidiolex – and their provision through reimbursed health systems in Europe and the US, result in a price tag of more than $30,000 a year, significantly more than a year’s use of retail CBD wellness products.

Total sales of Epidiolex reached $464m in 2021 and are anticipated to have risen by at least 20% in 2022.

 Jazz’s Response To BusinessCann

BusinessCann posed the following questions to Jazz and received the following replies

1. Is Epidiolex data relevant to consumer CBD?

2. Will Jazz be releasing any further data to regulators on its Epidiolex work? 

3. Some say the data released to the UK Committee on Toxicity raised issues of safety, without indicating whether the issues were explainable or repeated subsequently? 

4. How much has Jazz spent on its lobbying work in the UK, the US and rest of the world?

5. Is CBD best treated as a food or a medicine?