Germany has yet to launch its highly anticipated recreational cannabis market, but that hasn’t stopped the country’s cannabis economy from continuing to grow.
Namely, Germany’s insurance reimbursements for medical cannabis continued on an upward trajectory through the first quarter of 2023, reaching roughly 50.9 million euros ($55.6 million) in the January-March quarter, according to data from the German National Association of Statutory Health Insurance Funds as reported by MJBizDaily.
The figure is a 6.5% increase compared to the same period from 2022, though it also slightly declined from the previous fourth quarter of 2022.
The continuous climb provides further proof of Germany’s gradually expanding cannabis industry, which has become one of the largest in the world. With its pending legalization of recreational cannabis, experts have predicted that the country could very well take the top spot from California.
Nearly 99,000 prescriptions were filled during the first quarter of 2023, with dried flower accounting for 21.1 million euros in sales. “Finished pharmaceutical products,” consisting of products like Sativex and Epidolex, accounted for 13.1 million euros in sales.
The country’s reimbursement data does not include private prescription sales, however, as they are paid out of pocket by patients.
Germany has allowed for prescription cannabis by medical doctors under certain circumstances since 2017. Patients are allowed to access medical cannabis, as dried flower or extracts, by prescription and only for “serious illnesses.” The law doesn’t explicitly define “serious illness,” though patients often have cancer or deal with chronic pain.
Patients can access medical cannabis if a generally accepted standard therapy doesn’t exist or doesn’t apply, or if there is a reasonable possibility that medical cannabis will positively affect the disease process or serious symptoms. If those requirements are fulfilled, then German health insurers are required to reimburse the costs for cannabis therapy.
Initially, reimbursable prices were calculated based on the price for which a pharmacy purchased a product from a cannabis company by adding various surcharges. Pharmacy prices were not determined further, leaving cannabis companies free to set the prices for their products.
In March 2020, 9.52 euros per gram became the new base price for all cannabis flower reimbursements, according to Global Compliance News. Pharmacies could also claim surcharges, decreasing with the volume sold. The change didn’t necessarily limit the ability of cannabis companies to set their own prices, but it did effectively set a pricing limit.
The rule did not differentiate between flower from different countries, and all German flower had a fixed price for pharmacies of 4.30 euros per gram. This meant that pharmacies purchasing German flower had to pay 4.30 per gram but could claim a reimbursement of 9.52 euros per gram with surcharges.
A new arbitration ruling in June 2022 made the reimbursable price for German cannabis 4.30 euros per gram, allowing pharmacies to add a surcharge of 100% for “unchanged” cannabis flower or 90% for processed cannabis flower, no matter the prescription volume.
The new rule made German cannabis less profitable for pharmacies, at least when it comes to lower prescription volumes. The previous rules may have pushed pharmacies to purchase German cannabis for larger profit markets, though the new rule may open up the market for more cannabis imports in the future.
Germany has also been inching closer toward a regulated adult-use cannabis market, after first announcing its intent to legalize in 2021. Earlier this summer, Germany’s ministry of health unveiled a draft bill providing details on new regulations for personal use and cultivation of cannabis.
The draft bill would allow adults over 18 to possess up to 25 grams of cannabis for personal use and cultivate up to three plants. Earlier this month, the government approved the plan, though it must still be approved by Parliament.
