The only medical cannabis treatment approved domestically is the epilepsy drug Epidiolex. The Ministry of Food and Drug Safety has allowed special imports at patients' requests since 2019, but the problem is the price. Epidiolex, which is imported entirely from the United States, is very expensive, and recent currency depreciation could increase the burden. Experts say domestic production of cannabidiol (CBD), the raw material for medical cannabis, is urgently needed to increase patient benefits and reduce medical costs.
◇Regulation blamed: commercialization of CBD stalled despite technology
The hemp regulatory free zone in Andong, North Gyeongsang, launched in 2020 as a forward base for domesticating medical cannabis, is in practice far from commercialization. Corporations located there are researching and developing (R&D) CBD, the raw material for medical cannabis, but current law makes actual production and sales impossible. Under subordinate regulations of the Narcotics Control Act, experiments and research are only possible within the scope of approval from the Ministry of Food and Drug Safety.
Domestic companies must each have manufacturing quality management standard (GMP) facilities and obtain certification from the Ministry of Food and Drug Safety to produce medicines and export them overseas. However, without legal revision, that is currently difficult.
Recently, domestic pharmaceutical companies and start-ups have entered the CBD industry. Currently, the Andong zone houses Yuhan Corporation's health foods and cosmetics subsidiary Yuhan Health & Nutrition, Daewoong Pharmaceutical's R&D specialist affiliate Daewoong Therapeutics, Kolmar Korea, HLB Life Science and other pharmaceutical and cosmetics companies, as well as CBD start-ups.
Yuhan Health & Nutrition is developing CBD extraction and formulation technologies. It completed efficacy and safety evaluations of a CBD cream formulation in 2021 and has been pursuing new formulation development since 2023. HLB Life Science is researching which diseases CBD-related therapeutics may be effective against. Its goal is to develop treatments for intractable diseases such as cancer, epilepsy, dementia and Parkinson's disease.
NeoCannBio, a technology spin-off of the Korea Institute of Science and Technology (KIST), developed the world's first sealed microwave (MW)-based CBD extraction technology. It is a method that fires high-frequency electromagnetic waves into a sealed space, like a microwave oven, to quickly and stably extract high-purity CBD from hemp. It is faster than conventional heat-based extraction methods and has the advantage of less component loss due to heat.
NeoCannBio aims to refine high-quality CBD to pharmaceutical raw material standards and develop a generic with the same ingredients and formulation as Epidiolex within two years. The core ingredient of Epidiolex, CBD, is a naturally derived substance whose key substance patents have expired or whose protection scope is limited, making generic development possible. The company plans to replace the expensive imported drug with a domestic generic and cut the price by more than two-thirds.
◇Domestic production of medical cannabis could help health insurance finances
Domesticating CBD could provide tangible help to the national health insurance (NHI) finances. Korea's NHI finances are already showing warning signs. Costs are increasing annually due to rising treatment costs for chronic diseases from population aging. Last year, NHI recorded a surplus of 4.1 trillion won, but the Ministry of Health and Welfare projects a switch to a deficit in 2026, with the deficit reaching 1.6 trillion won in 2028.
In 2021, the National Health Insurance Service approved coverage for Epidiolex, which costs 1.2 million won per bottle, for patients with the rare intractable epilepsies Dravet syndrome and Lennox-Gastaut syndrome. The decision was made to improve patient access to treatment, but it has increased the burden on NHI finances. Domestic medical cannabis treatments are being noted as a realistic alternative that could replace high-priced drugs like Epidiolex.
Researchers at Eastern Michigan University found that seven years after medical cannabis was legalized, drug spending in the U.S. health insurance market fell by an average of 22%. Medical cannabis produced medical cost savings by partially replacing existing high-cost prescription drugs such as narcotic opioid analgesics and anticonvulsants.
Analysts say that if high-purity CBD is stably produced domestically and therapies based on it are expanded to be covered by NHI, it could positively affect both patient burden and the sustainability of NHI finances.
Hong Seung-bong, honorary president of the Korean Epilepsy Society and director of neurology at Gangnam Bedro Hospital, said, "Improving regulations on medical cannabis production and domesticating it as generics or new drugs would allow more patients to benefit," and noted, "It could also save roughly 10 billion won a year in public taxes."
References
International Journal of Drug Policy (2023), DOI: https://doi.org/10.1016/j.drugpo.2023.104143