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FDA Rejects Anti-Legalization Pharma Co’s Cannabis Drug Request

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The same drug company that donated $500,000 to a campaign to defeat marijuana legalization in its home state of Arizona in 2016 is now actively fighting to deter competition against its own synthetic THC product. Efforts to extend its exclusive right to manufacture the drug have resulted in a back-and-forth with a federal agency that ultimately resulted in the pharma firm’s request being summarily rejected.

Insys Therapeutics, a pharmaceutical company that came under fire over its anti-legalization election spending, is also known for producing potent opioids and a drug called Syndros, a synthesized THC product containing dronabinol that’s similar to Marinol, except that it’s a liquid preparation rather than a pill.

To many advocates, the company’s anti-legalization spending reeked of conflicts of interest. Was Insys worried that legal weed in Arizona represented a threat to its bottom line? The company essentially admitted as much in 2007, writing in a disclosure statement to the Securities and Exchange Commission (SEC) that “the market for dronabinol product sales would likely be significantly reduced and our ability to generate revenue and our business prospects would be materially adversely affected” if marijuana or synthetic cannabinoids were legalized.

Now, according to publicly available documents, Insys is engaging in another type of battle. It wants extended exclusivity over its oral dronabinol product. And in October 2017, the company asked the Food and Drug Administration (FDA) to decline applications from competitors seeking to produce generic versions of Syndros.

Insys has already sued two such drug companies, Par Pharmaceuticals and Alkem Laboratories, after learning that they had submitted Abbreviated New Drug Applications (ANDA)—the first step in the process of gaining approval for generic versions of existing drugs—which “triggered a 30-month stay” in one case, Insys senior vice president of regulatory affairs Stephen Sherman noted in a October 2017 citizen petition to the FDA.

Citizen Petition From Insys Therapeutics, Inc (2) by KyleJaeger on Scribd

In light of disclosures that drugmakers were submitting FDA applications to develop generic versions that referenced Syndros, which might eventually provide patients with cheaper alternatives, Insys appealed to the FDA.

Its request was in two-parts: 1) It asked the FDA to decline to “receive or approve” any ANDA applications that didn’t establish “in vivo bioequivalence” to its drug, and 2) that any ANDA applications for its drug “include fed and fasted state bioequivalence studies.”

In essence, Insys argued that its drug was too complex to be replicated by generic competitors that didn’t first conduct extensive testing demonstrating its biochemical likeness.

In a letter made public earlier this month, the FDA flatly denied the company’s petition. The government agency disputed the claims Insys included in its letter and clarified how the ANDA approval process works.

Petition Response Letter From FDA CDER to Insys Therapeutics, Inc (1) by KyleJaeger on Scribd

Robin Feldman, professor of law and director of the Institute for Innovation Law at UC Hastings College of the Law in San Francisco, literally wrote the book on all the different ways that mainstream pharmaceutical companies try to subvert generic competition.

She told Marijuana Moment that the bioequivalence testing Insys requested was already required in any ANDA application, so it was kind of like “petitioning the FDA to say ‘we insist that you do what it is that we all know you’re going to do.’ And with that, you get five months of delay.” In a phone interview, Feldman couldn’t help but laugh as she was read another section of the drug company’s citizen petition. That section says:

“Insys notes that it is currently awaiting an FDA exclusivity determination with respect to SYNDROS and expects to receive three years of exclusivity based on the submission of new clinical studies essential to approval.”

“Companies pile these exclusivities on one after another to keep generic competitors off the market as long as possible,” Feldman said. “So the reason I laughed is what you are seeing is a multipronged effort by the brand company to stave off generic entry as long as possible.”

“They’re using a variety of techniques: citizen petition, additional regulatory exclusivity, and adding these on. Each delay may be of limited time, but they may be extremely valuable—and together, they can add up to significant costs to the consumer,” she said.

In her book and published studies, Feldman reported that approximately 80 percent of citizen petitions, like the one submitted by Insys, were denied by the FDA. Submitting a citizen petition is often a delay tactic for drug companies hoping to maintain exclusivity over their brands, because “[d]elaying generic competition for as little as six months can be worth half a billion dollars in sales for a blockbuster drug,” she wrote in an op-ed for STAT.

False or misleading citizen petitions from drugmakers are so common, in fact, that Feldman created a beta “alert system” for users to submit and detect suspect petitions. When she ran Insys’s October 2017 petition through the system, it “came back with red flags,” she said.

Insys Therapeutics did not respond to requests for comment by the time of publication. This story will be updated if the company sends comment.

Senator Calls Out Big Pharma For Opposing Legal Marijuana

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Kyle Jaeger is an LA-based contributor to Marijuana Moment. His work has also appeared in High Times, VICE, and attn.

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Banking Lobby Surveys Members On Problems Serving Marijuana Businesses

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The largest group representing U.S. banks is asking its members to share stories demonstrating problems caused by the growing gap between marijuana’s ongoing federally prohibited status and its legalization in an increasing number of states.

In an email announcing the cannabis survey last week, the American Bankers Association (ABA) said that responses will be used by the national organization and its affiliated state bankers associations “to help illustrate to regulators and legislators the need for greater clarity” on the issue.

“[B]anks face significant risks in serving this industry, including criminal and civil penalties as well as bank regulatory action,” the email said, adding that the group wants to “learn more from bankers about how the lack of legal clarity regarding cannabis and banking is impacting banks and their communities.”

While the Treasury Department under the Obama administration released guidance to banks on serving marijuana businesses in 2014—and a steadily growing number of institutions are opening accounts for cannabis growers, processors, retailers and related operations—many financial services providers have remained wary about working with the industry in light of continuing federal criminalization.

“Can you provide an example of a situation where you had to close an existing account, terminate a banking relationship or turn away a potential customer due to their association with marijuana?” the new ABA survey asks. “This could include relationships with mainstream businesses that are not directly related to marijuana, but may generate a portion of their income from marijuana-related businesses (e.g., landlords, security companies, etc.).”

ABA member email

Concerns about federal prohibition have caused a number of banks close accounts for ancillary service providers such as law firms that work with marijuana businesses but don’t actually touch the plant themselves.

ABA, a trade association founded in 1875, is also querying members on whether they have ever seen a customer try to “disguise their affiliation with a marijuana business” and if state or local officials have ever initiated contact “urging you to bank marijuana businesses.”

And the organization wants to know about communications from federal regulators as well, particularly whether their feedback “on how to manage marijuana related accounts” has been “consistent.”

While ABA hasn’t endorsed cannabis reform—the group “takes no position on the moral issues raised by legalizing marijuana,” its website says—it has increasingly focused attention on highlighting financial services issues caused by federal prohibition.

For example, last month the group’s vice president and associate chief counsel for regulatory compliance published a lengthy report outlining what he called the “cannabis conundrum” that bankers in an increasing number of states now face.

And over the summer, the ABA Banking Journal’s podcast featured an interview on the topic with the head of the Colorado Bankers Association.

The banking trade group also asked in the survey whether respondents would offer services to marijuana businesses if the “state/federal conflict is resolved,” and if they are willing to allow their responses to be attributed to them, suggesting that the organization may be preparing public advocacy materials featuring the stories of members that could be used as part of an increased push to amend federal policy.

“ABA looks forward to learning more about the increasing operational challenges our members face when trying to serve their customers due to the conflict between state and federal law on cannabis,” Blair Bernstein, an ABA spokesperson, said in an email. “We believe the time has come for Congress and the regulatory agencies to provide greater legal clarity to banks operating in states where cannabis has been legalized for medical or adult use.”

Legalization advocates say that ABA’s effort to build support for cannabis reform on Capitol Hill will be welcome.

“As more and more states implement regulated markets for the medical or personal use of cannabis, no industry can operate safely, transparently, or effectively without access to banks or other financial institutions,” NORML Political Director Justin Strekal said in an interview. “If the ABA is able to hasten congressional change in federal policy so that these growing number of state-compliant businesses, and their consumers, may operate in a manner that is similar to other legal commercial entities, then it is yet another sign that the end of prohibition is near.”

A number of key Trump administration officials have indicated they want to see a clarity on cannabis banking issues.

For example, Steven Mnuchin, the treasury secretary, has hinted in congressional testimony that he wants state-legal marijuana businesses to be able to store their profits in banks.

“I assure you that we don’t want bags of cash,” he said during an appearance before a House committee in February. “We do want to find a solution to make sure that businesses that have large access to cash have a way to get them into a depository institution for it to be safe.”

In a separate hearing he said that resolving the marijuana banking issue is at the “top of the list” of his concerns.

Federal Reserve Chairman Jerome Powell said in June that the disparity between local and national marijuana laws “puts federally chartered banks in a very difficult situation.”

“It would great if that could be clarified,” he said.

And that same month, Federal Deposit Insurance Corporation Chairwoman Jelena McWilliams said that while she directed her staff to consider ways to address the issue, the agency’s hands are “somewhat tied” until federal law changes.

Pressure is also coming from the states. In August, a coalition of the top financial regulators in 13 states sent a letter demanding Congress take action to protect banks that work with marijuana businesses.

Despite the growing call for clarity on the issue, key committees in the House and Senate rejected amendments this summer that would have prevented federal banking regulators from punishing financial institutions for serving the marijuana industry.

Standalone legislation to provide permanent protections to banks that work with cannabis businesses have garnered increasing numbers of cosponsors in both chambers, but haven’t been scheduled for hearings or votes.

This piece was first published by Forbes.

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Canada’s Liquor Stores Will Heavily Outnumber Marijuana Stores On Legalization’s Launch

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In case you missed it, Canada’s legal marijuana system goes into effect next week. But new data reveals that access to liquor stores is going to be far greater than planned cannabis store—at least for the time being.

Statistics Canada, a government agency, released the report, which compares the prevalence of liquor stores and planned cannabis stores in each Canadian province, on Wednesday. The team behind the report notes that information about pending private or government-run marijuana shops is incomplete—excepting online retailers, for example.

“Using the agency’s geographic databases, the location of each Canadian household is identified, and the distance from that location to the nearest legal retail outlet is calculated. Averages of these distances are then calculated to determine how generally accessible these products are to Canadians.”

The top-level takeaway is pretty straightforward. Ninety percent of Canadians currently live within 10km (or about six miles) of a liquor store. Only 35 percent of the Canadian population lives within the same distance of a planned cannabis store. Visualized, here’s a look at the access to cannabis and liquor stores based on population density in each province:

Access to liquor stores by province

Population of Canadians with access to a liquor store based on distance. 

1 km 2 km 5 km 10 km More than 10 km
Canada 11,362,355 21,277,831 28,876,635 31,711,644
Newfoundland and Labrador 84,776 158,242 265,484 321,357
Prince Edward Island 20,498 38,328 77,954 107,592
Nova Scotia 207,360 382,390 588,728 738,101
New Brunswick 112,467 229,098 419,581 542,312
Quebec 2,360,006 4,650,155 6,499,149 7,290,334
Ontario 3,460,906 7,835,317 11,587,894 12,770,424
Manitoba 349,046 758,067 913,421 977,472
Saskatchewan 249,628 539,875 746,822 793,642
Alberta 2,591,997 3,336,786 3,554,164 3,704,638
British Columbia 1,908,747 3,323,470 4,168,425 4,402,666
Yukon 4,407 8,264 23,824 26,294
Northwest Territories 9,326 14,648 23,449 29,072
Nunavut 3,191 3,191 7,740 7,740

Access to planned cannabis stores by province

Population of Canadians with access to a planned cannabis store based on distance. 

1 km 2 km 5 km 10 km More than 10 km
Canada 1,440,702 3,797,855 8,757,433 12,194,999
Newfoundland and Labrador 51,424 141,076 274,922 336,714
Prince Edward Island 6,907 29,616 59,576 82,626
Nova Scotia 43,792 135,644 363,855 512,091
New Brunswick 34,833 97,642 290,802 414,181
Quebec 171,052 572,007 1,789,784 3,296,701
Ontario 0 0 0 0
Manitoba 72,366 261,485 747,866 826,490
Saskatchewan 117,606 316,339 684,128 727,937
Alberta 624,382 1,394,464 2,229,038 2,593,820
British Columbia 317,523 846,977 2,302,059 3,381,659
Yukon 817 2,605 15,403 22,780
Northwest Territories 0 0 0 0
Nunavut 0 0 0 0

“Canadians have remarkably good access to liquor stores all across the country with 90 percent living within 10 kilometers of a store,” the report states. “Not surprisingly, their access to cannabis stores immediately after legalization on October 17, 2018 is likely to be much more restricted with only 35 percent of the population dwelling within 10 kilometers of a store.”

“It is emphasized this is a preliminary estimate based on less-than-full information about the number of stores expected to open and their locations. Cannabis accessibility will undoubtedly increase substantially in 2019 and 2020.”

For a comprehensive breakdown on the differences in marijuana legalization implementation for each province, check out this Marijuana Moment analysis.

Marijuana Stores Will Be Hard To Find For Most Canadians On Day One Of Legalization

Photo courtesy of Brian Shamblen.

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Marijuana Stores Will Be Hard To Find For Most Canadians On Day One Of Legalization

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One week from today, Canadian adults will be able to purchase marijuana legally across the country. But the number of stores per province and per capita at this point varies widely, an analysis Marijuana Moment conducted shows.

For residents of Canada’s most and least populous provinces, Ontario and Nunavut, respectively, online ordering will be their only means of legal purchase for the foreseeable future. British Columbia, the third-biggest province in the country with 4.8 million residents, has licensed only one store. Meanwhile, Northwest Territories, with only 44,520 residents, will open six government-run stores, or one per 7,420 residents.

(Note: British Columbia omitted for scale, as it has only one store for 4.8 million residents. Ontario and Nunavut will be online sales only on October 17. Population 2017 per Statistics Canada)

While many of even these preliminary licensed locations will not be operational October 17, by federal law, each province must provide an online purchasing system. 

And the provinces have committed to opening more physical stores. Manitoba has set a goal that 90 percent of Manitobans have a 30-minute drive or less to a cannabis store. Ontario was supposed to have 40 stores run through the province by now, but when the new provincial government came into power in June, they decided that cannabis stores will be privately owned, so legislators had to go back to the drawing board on regulations. 

Alberta hasn’t set a limit for the overall number of private stores in the province, but each locality will be allowed to set a limit for their area. Hundreds of companies have applied to be retailers.

Each province has set up its own rules and regulations regarding minimum age for sales, possession limits and whether residents can grow plants at home.

As with alcohol, the age at which Canadians can purchase cannabis is lower than in the United States. In Quebec and Alberta, 18 year-olds will be able to purchase adult-use marijuana. In every other province, the legal age will be 19. By contrast, in the U.S., every state that has legalized recreational marijuana to date has set the legal age at 21, which is also the legal drinking age in the states.

In most provinces, four plants can be grown in a household. Quebec and Manitoba are prohibiting home growing; Nunavut is not prohibiting personal growing, but has not defined a limit. New Brunswick has specified conditions to allow plants to be grown outdoors (a locked enclosure 1.52 meters high). British Columbia has specified that home plants must not be visible to the public, and won’t be allowed in day-care homes.

The national standard for purchase and public possession for adults is 30 grams of product of any kind. Quebec has set a limit on household possession at 150 grams, but other provinces have not set limits on how much cannabis can be kept in a private home.

What will make up those 30 grams? Flower, oils and, in provinces that are allowing home growing, seeds and plants. The federal legislation prohibits edibles and concentrates at this time.

Public use of cannabis is the policy that varies the most widely from province to province. Most provinces have adopted the stance that smoking or vaping marijuana will be illegal anywhere smoking or vaping tobacco is not allowed. Saskatchewan, Manitoba, New Brunswick and Yukon have banned public use (the regulations of the latter two specify backyard use as well as homes). Alberta and Nunavut have left it up to local governments to set regulations. Ontario and Quebec have set specific locations where it will be illegal to consume, including parks, public spaces and bus shelters.

Every province has passed legislation of some form banning cannabis for drivers in vehicles, but legal limits will differ from province to province. Quebec has adopted a “zero tolerance” policy for all drivers, while Ontario is setting zero tolerance for drivers under 21 years of age as well as commercial drivers. Other provinces are developing systems for how driving while impaired will be determined.

With retail stores spare in Ontario and British Columbia, perhaps Regina, Saskatchewan will become the tourist destination of choice for Americans thinking about crossing the border to experience legalization in their northern backyard. Those tourists should be sure to empty their pockets and car before returning to the United States, as the U.S. Customs and Border Protection has promised to crack down on Canadians and U.S. citizens alike.

Photo courtesy of Christopher Policarpio.

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