Israel’s pharmacists oppose new cannabis distribution regulations

The Israeli government has approved a new regulation that will allow cannabis to be distributed directly from factory to patients. This decision has not been received well by pharmacists, who believe that the current law only allow cannabis to be distributed by a specialist pharmacist. This change in regulation means that their profit will be reduced significantly.

In the past year, entrepreneurs in Israel have identified the potential found in the medical cannabis market. This potential will only increase with the expected legalization process. As such, pharmacists have entered the field through the establishment of pharmacies dedicated to cannabis. 

Although they are obligated to have a stock of medicines and meet all the conditions of a “regular” pharmacy, the approach, design, and goal of these establishments is to function as a cannabis store or “dispensary”.

This phenomenon, which currently includes only a few pharmacies, is likely to expand significantly in the coming months in light of Deputy Health Minister Yoav Kish’s decision to allow direct marketing of medical cannabis, “from factory to patient,” over the heads of pharmacies. 

Such a permit would in fact allow any factory or trading house, perhaps even any company later on, to market cannabis itself, through its own factory shop, without the need to maintain an entire pharmacy subject to very strict drug requirements.

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Some fear this regulation will bring a significant cut in their profits

Those who oppose the new regulation are members of the Pharmacists’ Federation, the body that represents private pharmacies. These pharmacists are currently enjoying a sharp rise in sales, as a result of being the sole authorized entities to market cannabis in Israel. 

According to a government estimate, pharmacies cut a share of about 30% or more of any cannabis product sold. The high prices have provoked the public to demand a cut of their profits, in order to reduce prices that have jumped by hundreds of percentage points following the reform. The new initiative will not abolish the pharmacies’ right to operate in the field, but it may pressure them to lower prices.

In an attempt to stop the move, the chairman of the Pharmacists’ Federation, David Peppo, addressed the Knesset last week, demanding that authorities do not implement the decision to allow direct marketing of cannabis. This week, Peppo sent another appeal, this time to the High Court judges, as part of the petition against the reform that has been going on for a year and a half. The pharmacists’ representative sharply criticized Kish and his decisions and warned against the complete destruction of the pharmacy industry in Israel.

Cannabis can only be sold by a specialist pharmacist

“The deputy minister actually says that it is possible to sell straight from the warehouse, without the requirements of a pharmacy size, minimum inventory, opening hours, public availability, shelves in a certain form and hundreds of other requirements included in the law and regulations of pharmacies,” pharmacists explained. They also apparently ignore the fact that cannabis companies will indeed be obligated under the plan to dispense cannabis products only through a specialist pharmacist and according to an issuance protocol.

In their appeal to the High Court, the pharmacists attached data from financial reports of listed cannabis companies where they boast of gross profit margins ranging from 50% to 77%. “This profit margin does not receive any attention from the deputy minister, while the 25% to 31% of the pharmacies are an urgent issue for him to address.” According to them, “this is blatant and deliberate discrimination that cannot be part of a reasonable or legitimate regulatory decision.”

Pharmacists also claim that even if 20% of the costs to the patient are cut as part of direct marketing, the new regulation will never allow the old regulation to reach prices, so the best way to reduce prices may be through price control – a move the Ministry of Finance has long opposed. They also claim that “probably in 2021 there will be an excess supply of cannabis in the country, and there may even be a drop in prices and the destruction of inventories.”

Pharmacist believe the decision is a step back and cannot be carried out legally

“We will not allow the creation of regular pharmacies”, the pharmacists write. “Such a move will inevitably lead to a slope that will degrade and depreciate the entire practice of pharmacy.” 

According to them, the Ministry of Health will try to cut pharmacies’ profits while it ostensibly ignores the profits of the other links in the production chain. On the basis of this claim, they demand that the court “deals with the issue of price without harming only one link.”

According to them, “we are not afraid of price controls, we have been under a regime of control since the establishment of the state, we will not be prepared for the deputy health minister to evict pharmacies and open the door to dispense drugs in Israel without a pharmacy service. The deputy minister’s proposal is a step backwards and comes in response to pressure exerted by a small number of patients.”

Finally, pharmacists reiterate that the move will not lead to a price reduction and cannot be carried out legally, and demand the intervention of High Court judges on the issue. 

As will be recalled, the petition to the High Court called for the restoring of cannabis production procedures to their former state and the abolishing the entire reform and the clinical method on which it is based. The petition asked authorities to restore the former fixed price of $108 (NIS 370) per month for each quantity. 

At this point, it seems however that the involved parties understand that price is probably the main substantive issue that remains unresolved._

(Featured image by Karolina Grabowska via Pexels)

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First published in קנאביס, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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