Although a product suchas CBD may be marketed and sold legally, the FDA still has asignificant interest in making sure that it is done so inaccordance with its set guidelines. (Photo: Bloomberg)

One of the hottest topics in health care benefits today is theuse of medical marijuana products and how payers willdefine the parameters of how when such products are covered movingforward, as the law continues to evolve on the state and federallevel. With marijuana classified as a Schedule I drug at thefederal level (alongside unlikely neighbors such as heroin andpeyote) and now completely legal in numerous states even forrecreational use, the prospect of instituting any type of coveragefor cannabis products is risky to begin with.

However, we've still seen some payers communicate an interest indoing so, recognizing that from a cost containment perspective,medical marijuana may be a much better choice than the high costspecialty drugs it might be replacing in certain situations. Now,some changes at the federal level have cleared the way for coveringcertain types of marijuana-derivatives, without the risksassociated with reimbursement for a product the use of which iscriminal under federal law.

Related: A new broker niche for 2019? The cannabisindustry.

Notably, the Agriculture Improvement Act of 2018 (known as the“Farm Bill”) created a new classification ofcannabis products, “hemp”, which includes cannabis and cannabisderivatives which contain essentially no THC(delta-9-tetrahydrocannabinol, the compound which gives marijuanaits psychoactive effects).

The bill removed hemp, this new category of marijuana products,from the Controlled Substances Act, which means essentially thatmarijuana which contains no THC (specifically, less than 0.3percent THC by dry weight) is not a controlled substance underfederal law. This would include cannabidiol or “CBD”, which israpidly gaining popularity and is being sold an aid for everythingfrom pain, insomnia and anxiety, to more far-fetched conditionssuch as cancers.

In response to this the FDA Commissioner has issued a statement outlining the FDA's policyon such products and indicating an intent to carefully monitor CBDand other cannabis products and the claims they make in connectionwith their marketing. It's important to remember that although aproduct such as CBD may be marketed and sold legally, the FDA stillhas a significant interest in making sure that it is done so inaccordance with its set guidelines, for example ensuring thatunfounded and unsupported claims are not made in regard to CBD'shealth effects or medicinal value.

Still, we have already seen FDA approval of CBD for certainuses, namely as a very effective treatment of certain forms ofepilepsy. Epidiolex, a CBD product manufacturer by a UK-basedcompany which also funded the study, was determined to veryeffective at treating certain types of epilepsy, significantlyreducing seizures with manageably side effects, particularly atthe right dosage. Epidiolex has since receivedFDA approval for treatment of certain types of epilepsy.

So, in light of developments in the last few years, the issue ofcoverage is no longer as simple as defining “marijuana andmarijuana derivatives” and either excluding or covering them—apayer that wants to afford its participants access to and coverageof emerging cannabis-based treatments which may be more effectiveand cost effective than other alternatives will need to properlydifferentiate between different types of marijuana products,particularly those containing and those not containing THC.

This will mean revisiting plan definitions as well as exclusionsand other limitations. It's also important to remember that FDAapproval does not apply to a drug in a vacuum – a drug is or is notFDA approved for treatment of a certain condition under certainmedical guidelines, so Epidiolex would properly be considered FDAapproved for treatment of one of the approved forms of epilepsy,but not for something like cancer. And finally, in the self-fundedworld, any time a plan document undergoes changes, the applicablestop loss policy should also be reviewed and amended. Correspondingdefinitions and exclusions in that policy will also need to beexamined and likely revised to avoid putting the plan in aprecarious situation.

Andrew Silverio, Esq., serves asthe Compliance & Oversight Counsel for the PhiaGroup,  primarily focusing is on the most complex andemerging legal and regulatory issues, both internally and for ourclients as a member of Phia Group Consulting.  Andrew isalso the Phia Group's HIPAA privacy officer.

Read more: 

• After Gottlieb's FDA departure, what's next forcannabis regulations?
• First-ever drug made from cannabis moves closer toU.S. approval
• Medical marijuana: A boon for olderworkers?