Novartis steps into the medical marijuana business

Canada’s burgeoning medical marijuana industry has finally drawn in a big pharma player. Tilray, a producer of medical cannabis products, announced that Novartis’ generics division in Canada, Sandoz Canada, had signed a binding letter of intent to collaborate on the production and commercialisation of medical marijuana products.

Novartis is the first big pharma company to get involved in the medical marijuana business, which is growing rapidly in North America.

Dissimilar from big tobacco’s move into e-cigarettes in 2012, Novartis’ move is probably not going to foreshadow a wholesale industry pivot towards incorporating medical marijuana products, mainly because you can’t patent the plant.

What it could foreshadow is generics firms taking a step into the area, for the reason that Brendan Kennedy, Tilay’s CEO, noted in the press release: "This agreement is a major milestone on the long road to legitimising medical cannabis as conventional medicine […] Tilray is pleased to be, what we believe is, the first federally licensed producer of medical cannabis to form a strategic alliance with a local affiliate of a global pharmaceutical company to improve the availability and quality of medical cannabis products for Canadian patients in need."

The coup for Tilray is that Sandoz is a globally recognised brand that, as he mentions, legitimises the products; if this process continues, with more countries legalising the product, then more generics companies involved would make the products a more accepted part of medical practice. The companies would obviously stand to benefit from that by reaping sales from a nascent market.

For Sandoz, it means that it could be at the forefront of this; its role in the partnership with Tilray will be to "educate" pharmacists and physicians about the products, through its large sales force in the country.

Sandoz will wholesale and distribute the non-smokable/non-combustible products to hospitals and pharmacies; the two companies will also cooperate on developing new medical marijuana products.

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