New changes to medicinal cannabis announced by Australia’s drug regulator last month are more about pharmaceuticalising the plant than making it more accessible, according to an industry expert.
Speaking with Small Caps, medicinal cannabis specialist Dr Sud Agarwal said the Therapeutic Goods Administration’s (TGA) proposed move to down-schedule low-dose cannabidiol (CBD) products so they can be sold over-the-counter from next June has been “slightly misrepresented”.
“Most people believe this is a gradual softening of government regulations in Australia, but I saw it as a defining of the rules,” he said.
“It’s not a free-for-all. What the government is saying is, products can be classed under Schedule 3, on the proviso they meet criteria A, B, C.
“Essentially, CBD is turning into a pharmaceutical – it will no longer be freely sold as oil in a bottle like it is [in some parts of the world] today.”
Dr Agarwal is the co-founder and chief executive officer of Australian medicinal cannabis ancillary services provider Cannvalate and serves on Incannex Healthcare’s (ASX: IHL) board as a non-executive director and chief medical officer.
How Australia compares to the rest of the world
Across the globe, rules around how CBD can be sold are changing.
For almost two years, CBD has been labelled as a novel food in the European Union. But now, the European Commission is considering recategorising it as a narcotic and recently paused all novel food applications for CBD and hemp products.
Hemp is a cannabis plant cultivated for its fibre or edible seeds and only contains very small amounts of the psychoactive ingredient tetrahydrocannabinol (THC). Often CBD can be derived from the hemp flower.
Dr Agarwal said this reclassification increases regulations “massively” since a narcotic must be prescribed by a doctor.
Meanwhile in the United States, the Food and Drug Administration (FDA) introduced a designation called Generally Recognised As Safe (GRAS), which tightened the quality requirements for CBD including testing products for the presence of heavy metals, contaminants and bacterial count.
The FDA also forced CBD companies to remove all therapeutic claims attached to their products.
“Even Charlotte’s Web, which has historically been sold as an anti-epileptic agent, can’t sell a bottle [of CBD oil] saying that on the label,” Dr Agarwal said.
Australia’s ruling to make CBD accessible over-the-counter at pharmacies from next June demands that products must meet the same quality, safety and efficacy regulations as other prescription pharmaceuticals.
“It’s all kind of moving in the same direction. Governments are saying companies have had a few years of selling whatever they want, now let’s create some quality and stop selling snake oil,” Dr Agarwal said.
The challenge of registering a natural substance
Therein lies the challenge: it’s very hard to make pharmaceutical-grade products from plants, because plants in their very nature are variable.
“Every bottle must have the same amount of active ingredient as the label claims it contains. The reality is, botanically-derived products are very challenging to register as a pharmaceutical because of the innate variation that occurs,” Dr Agarwal said.
In September – following the TGA’s down-scheduling announcement – the regulator released a laboratory testing report that audited medicinal cannabis product samples and effectively ‘named and shamed’ products that did not comply with requirements.
Of 22 samples received for testing, three failed to meet the lower limit requirement for content of the active ingredient, while two samples were marginally above the higher limit when compared with the declaration made to the TGA.
The five products have been recalled until the matter is resolved to the TGA’s satisfaction.
Over-the-counter change expected to drive sales, but who will be ready?
According to Dr Agarwal, about 3% of people purchased CBD in the first year that the United Kingdom made products accessible over the counter.
Based on Australia’s population of some 25 million, 3% would be equivalent to 750,000 people.
“With an average annual spend of $1,000 per head, that’s a $750 million market potentially – a massive market,” he said.
However, Dr Agarwal noted that while many medical cannabis companies in Australia welcomed the TGA’s changes and alluded to the fact they would register their own existing CBD products under Schedule 3, “none of them are anywhere near ready”.
The TGA’s Schedule 3 requirements call for a recommended daily dose of 60 milligrams per day with no more than 30 days’ worth in a bottle, and the formulas must contain no more than 2% THC.
“None have got the clinical trials in place to be able to make a therapeutic claim to register as a Schedule 3 product.
“No one will be ready by June [when the TGA changes are expected to be implemented]. On top of that, when companies do get their dossier to the TGA, they’ve got a processing time which is somewhere between 180 and 220 days,” he said.
“The reality is going to be early-mid 2022.”
This forecast hasn’t stopped Cannvalate’s collaborations from joining the race, however.
“Medicinal Cannabis Research Collab (MCRC), which is Cannvalate’s university-based contract research organisation, has already been engaged by four parties to bring a Schedule 3 product to market, as well as a number of Schedule 4 products,” Dr Agarwal said.
“We’ve got four CBD products under development at the moment and they’re all trying to make those quality, safety and efficacy hurdles.”
Another challenge is the fact that clinical assets will need to hit their efficacy endpoint with only 60 milligrams (the approved dosage under Schedule 3).
“That’s a very small dose and it’s hard to achieve much with 60mg,” Dr Agarwal said, but added that MCRC has a variety of adsorption enhancers, bioavailability enhancers and products that can speed up onset which increase its ability to hit these endpoints.
“It’s the equivalent of fast onset Panadol, where the formulation is changed by additives to make it work faster.”
Dr Agarwal said the same rigour that customers would expect when purchasing Nurofen (ibuprofen) over the counter will now be applied to CBD oil, which is “good for the consumer”.
“They know they’re getting a quality product with no bacteria or pesticides and it’s pretty safe to be sold over the counter,” he said.
But while the bottle gives a recommended dose of 60mg per day, the reality is, the consumer who buys it will just titrate it to however much they need.
“CBD is so non-toxic – it’s not a drug of addiction or abuse, it’s pretty benign,” Dr Agarwal said.
“I think five years from now, we’ll be looking at CBD as a health supplement almost like cod liver oil. Only because it’s new, it’s controversial.”