Clifford Chance

Businesses have been capitalising on marketing holistic and homeopathic remedies for decades, however, following recent changes in the law concerning the legal status of cannabis, a number of businesses are looking to exploit the "therapeutic" properties of CBD as an alternative to established medicines currently available on the market.

The Green Rush

As mentioned in previous instalments of our "Green Rush" series, there is a growing demand for natural or alternative products with therapeutic uses .

One indicator that change is on the way is the recent approval of two cannabis based medicines in the UK. Recent guidance from the UK's National Institute for Health and Care Excellence (NICE) has led to the recommendation of Epidyolex for rare types of epilepsy and Sativex for muscle spasms in patients suffering from multiple sclerosis. Some experts view these drugs as paving the way for the approval of further cannabis-based medicinal products.

A number of patient groups, healthcare professionals and industry bodies are lobbying the UK government to relax the laws and regulations in order to make cannabis-based medicines more available to patients for a wider variety of indications (e.g. treatment for pain). Accordingly, it is expected that the number of cannabis based-medicinal products approved for sale and use in the UK will sky-rocket in the next few years. Consequently, businesses are taking the time now to obtain regulatory approvals and legal advice to ensure a quick launch to market and secure market share before their competitors.

Legal Background

Controlled Substances: THC vs. CBD

As mentioned in our previous articles, the general position across Europe is that Tetrahydrocannabinol (THC) is classed as a "controlled substance". Accordingly, products containing THC levels in excess of 0.2% are generally prohibited throughout Europe unless they fall within specific exemptions or licensing regimes.

In contrast, cannabidiol (CBD) (as an isolate or in pure form) is not classed as a "controlled substance". Accordingly, it will generally not be unlawful to market products containing CBD, subject to THC levels not exceeding 0.2%, meeting product specific regulations and obtaining the necessary licences or authorisations.

An additional layer of complexity is that certain parts of the cannabis plant are considered to be controlled (i.e. flower; leaves) and are therefore subject to a general prohibition on their use, cultivation and processing. In contrast, non-controlled parts (i.e. seeds; stem) are not subject to the general prohibition (subject to THC levels not exceeding 0.2%). Consequently, different restrictions may apply depending on what parts of the cannabis plant are used in the manufacture of the medicinal product in Europe. Restrictions are also in place with regards to the strain or variety of cannabis plant that can be used in Europe in the manufacturing process.

Medicinal Products: Licensing Regime

In Europe, the legal framework for medicinal products is harmonised by the Medicinal Products Directive. The provisions of the Directive are implemented in the UK pursuant to the Human Medicines Regulations 2012.

In the UK, a medicinal product can only be placed on the market if it has obtained a marketing authorisation (MA) from either the EU Medicines Regulator, the European Medicines Agency (EMA) or the UK Medicines Regulator, the Medicines Healthcare products Regulatory Authority (MHRA). An MA will only be granted if the medicinal product has met the requisite quality, safety and efficacy standards. The process can often be long and expensive since pre-clinical and clinical studies need to be performed in order to obtain clinical data to assess and validate the product's characteristics, efficacy, side-effects and safety when used in the treatment of human patients for different therapeutic indications.

In a number of limited circumstances, certain medicinal products may be supplied in the UK without an MA. Such "unlicensed" medicinal products are often used to treat the specific clinical needs of a particular patient under the prescription and guidance of a specialised doctor. Under the Regulations, this "specials" exemption has been used on a small number of occasions in the UK in order to prescribe unlicensed cannabis-based medicinal products to patients suffering from severe forms of epilepsy where treatment by licensed medicines has proven ineffective. Importantly, any such exemption under the "specials regime" will cease once a licensed drug is approved for the applicable indication.

Distributing and Manufacturing Cannabis-Based Medicinal Products

In the UK, the following licences will need to be obtained from the relevant regulatory bodies:

• Wholesale Dealer's Licence: the licence is required to i) sell, supply and market a medicinal product in the UK; and ii) import medicinal product from an EEA Member State. The licence is issued by the MHRA;

• Manufacturer's/Importer's Licence: required if medicinal product is to be i) manufactured or assembled in the UK; or ii) imported from a country outside the EEA. The licence is issued by the MHRA and includes GMP certification.

Holders of a Manufacturer’s/Importer’s Licence will also need to comply with certain Good Manufacturing Practice (GMP) and Good Distribution Practice (GDP) requirements.

In addition to the above regulatory licences, if the medicinal product contains any THC component, as opposed to pure CBD, then subject to a de minimis level of THC, certain controlled drugs licences will also be required to import, hold and distribute such products as follows:

• Domestic Controlled Drugs Licence: the licence is required to lawfully possess, supply, produce or manufacture any "controlled substances" and is issued by the Home Office;

• Import Licence: the licence is required to import and/or distribute cannabis-based products into and within the UK and is needed for each shipment of product. The licence is issued by the Drugs and Firearms Licensing Unit.

Is it lawful to market cannabis-based medicinal products in the UK?

Unsurprisingly, the regulatory and licensing regimes in the UK are onerous and strict. The treatment and safety of patients is critical as well as controlling the use and distribution of drugs, and failing to comply with the above mentioned licensing requirements can result in catastrophic damage to a company's reputation. In addition, a company in breach of the Regulations can expect to be subject to heavy sanctions, including monetary fines and potential imprisonment for certain officers of the company.

The complexity of the medicines regime is only increased if a medicinal product incorporates a controlled drug. This is because additional licences will need to be obtained from different regulatory authorities. Accordingly, before a cannabis-based medicinal product is launched on the UK market, a company should obtain specialist advice to ensure that it is compliant with the various regulations and licensing regimes. Moreover, the company should ensure that it has appointed appropriately qualified personnel to oversee compliance with its licensing obligations throughout the supply chain.