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DEA’s Descheduling of Epidiolex Spurs Optimism for CBD Applications

By William Sumner, Hemp Content Manager, New Frontier Data

Cannabinoid-based science this month marked a significant milestone in the legal cannabis industry’s debate against federal prohibition of marijuana, as the U.S. Drug Enforcement Administration (DEA) made it easier for medical patients to access the only federally approved drug derived from cannabis.

On April 6, the DEA informed London-based drug manufacturer GW Pharmaceuticals that effective immediately Epidiolex, its flagship CBD-based drug, would no longer be classified as a Schedule 5 drug under the federal Controlled Substances Act.

Differences Between Controlled and Noncontrolled Substances

Under U.S. federal law, controlled substances are generally understood as drugs with a high potential for abuse or addiction, such as Vicodin or Xanax. Only physicians who are registered with the DEA can prescribe controlled substances, and they are often tasked with stringent reporting standards to prevent overprescribing.

On the other hand, noncontrolled prescription drugs (e.g., blood pressure or cholesterol medications) do not require physicians to register with the DEA, and have far fewer reporting requirements than do controlled substances. According to GW’s 2019 Third Quarter Financial Report, at least 3,000 U.S. physicians have prescribed Epidiolex since its 2018 rollout.

In a statement, GW CEO Justin Gover thanked the DEA for confirming Epidiolex’s noncontrolled status.

“Importantly, the descheduling of Epidiolex has the potential to further ease patient access to this important therapy for patients living with Lennox-Gastaut syndrome and Dravet syndrome, two of the most debilitating forms of epilepsy,” he stated.

Despite being a CBD-based drug, Epidiolex’s descheduling will not have an immediate effect on the legal status of CBD or related products. Proponents are encouraged that the action might likewise relax regulations. Since the 2018 Farm Bill legalized hemp and its derivatives, the U.S. Food and Drug Administration (FDA) has been in the process of developing comprehensive regulations regarding products which have not gone through its approval process. In a report to Congress last month, the FDA said that its rulemaking process is continuing (including consideration of CBD’s use as a dietary supplement), and that it is meanwhile developing enforcement guidance for products already on the market.

Epidiolex Sales Projected to Grow

Epidiolex continues to be GW Pharmaceuticals’ top moneymaker. In Q4-2019, sales of Epidiolex topped out at $104.5 million and accounted for slightly more than a third of the company’s total annual revenue. Over the next five years, the Hemp Business Journal projects that U.S. Epidiolex sales could increase from $293 million in 2019 to more than $1.5 billion in 2025.

In addition to becoming noncontrolled substance, Epidiolex’s expansion into treating other debilitating conditions could also help propel sales.

Beyond its approved uses of Epidiolex to treat seizures resulting from Lennox-Gastaut syndrome or Dravet syndrome, the company is seeking approval for the drug to be used for seizures resulting from Tuberous sclerosis complex (TSC) and Rett syndrome.

There are approximately 50,000 U.S. patients affected with TSC, and some 11,000 patients with Rett syndrome. By comparison, the U.S. has around 20,000 patients with Dravet syndrome.

Last month, the FDA granted priority review to Epidiolex’s new drug application (NDA) for treating TSC-related seizures.

Investors responded positively to the news of Epidiolex’s descheduling. Within the first day of trading, shares of GW Pharmaceuticals rose 5%, from $86.58 per share to $91.72, reaching $98.82 per share at latest report.

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