With the upcoming legalization of recreational cannabis and the continued growth of its medical application, pharmacies in Germany face a range of challenges and opportunities. Particularly regarding compounded cannabis medications, which play a critical role in treating chronic pain, spasticity, and other severe conditions, the market is poised for further evolution. However, the increasing number of prescriptions and the associated economic feasibility raise questions that affect not only pharmacists but also patient care.
Economic Impacts of Retaxation on Cannabis Prescriptions
Retaxation – the reduction of reimbursements by health insurers – has created significant uncertainty in the field of cannabis prescriptions. Pharmacies offering cannabis products as compounded medications are particularly affected. Reports indicate that in some cases, prescriptions costing over €100 were retroactively reduced to €34. This results in financial losses for pharmacists, as the actual production costs often far exceed this amount. For smaller pharmacies without specialized departments for cannabis products, this can pose an existential threat.
Cannabis preparations, especially those tailored to individual needs (such as specific cannabis flowers or customized extracts), are expensive to produce. If health insurers fail to adequately reimburse these products or set prices too low, pharmacies risk unprofitability. Consequently, fewer specialized pharmacies may remain in the cannabis market, or the number of available compounded medications could decrease, ultimately impacting patient care.
Specialization as a Success Factor for Pharmacies
For pharmacies specializing in cannabis, the current market conditions are not insurmountable hurdles. On the contrary, pharmacies handling high volumes of cannabis prescriptions and possessing extensive experience in collaborating with health insurers and pricing can better navigate these challenges. The complexity and individuality of cannabis prescriptions require specific knowledge and expertise – skills that not all pharmacies possess.
Specialized pharmacies often have the advantage of a broader customer base, thanks to their reputation for expertise in cannabis products and their therapeutic applications. These pharmacies can adapt more quickly to market changes and new regulatory frameworks due to their knowledge and connections with health insurers.
However, questions remain about the future pricing of cannabis prescriptions and whether health insurers will be willing to provide adequate compensation for the production of individualized cannabis preparations. If economic conditions remain unfavorable or worsen, even specialized pharmacies could face pressure.
Market Consolidation: Smaller Players at Risk
The developments in cannabis prescriptions could lead to market consolidation in the coming years. Pharmacies treating cannabis products as a “side business” without establishing specialized departments may struggle to overcome the challenges of retaxation and uncertain pricing. These pharmacies might be forced to exit the cannabis market or significantly reduce their involvement.
On the other hand, pharmacies that have made cannabis a core component of their business stand to benefit from the growing demand for medical cannabis preparations. These pharmacies, with their specialization and experience, hold a competitive advantage and are better equipped to navigate current market conditions. Nevertheless, they must closely monitor ongoing changes in pricing and their relationships with health insurers to maintain profitability.
Outlook: What Lies Ahead?
The market for cannabis prescriptions will continue to evolve in the coming years, especially against the backdrop of recreational cannabis legalization and the increasing medical use of cannabis. For pharmacies, success will depend on their ability to adapt to market conditions, meet patient needs, and establish a sustainable economic foundation for the production and dispensing of cannabis products.
Specialization, expertise, and volume effects will remain key factors. Pharmacies that skillfully combine these elements while addressing the challenges of pricing and reimbursement have the best chance of long-term success in the cannabis market.
For patients, the hope is that despite these challenges, the availability of cannabis preparations will be maintained, and the quality of care will not be compromised by economic pressures. However, it is clear that operating cannabis as a “side business” will become increasingly difficult – and those who do so may soon find themselves exiting the market altogether.
