While medical marijuana could be poised to emerge as the new frontier in therapy for various health conditions, questions remain about its benefits, risks and insurability.

The pharmaceutical landscape is constantly changing. Could medical marijuana — now legalized in many US states — emerge as a new frontier therapy for various health conditions? For years, while the consulting community has long assisted payors in managing physician-prescribed medications, the potential benefits of medical marijuana treatments have only recently begun to receive greater attention and interest. Despite its potential benefits, there remains limited published material on the topic. This article explores the evolution of medical marijuana, its current Food & Drug Administration (FDA)-approved uses and considerations for patients, and the future possibilities of this non-traditional therapy.

Understanding medical marijuana

Initially associated with recreational use, marijuana has been shown to carry potential pharmaceutical benefits. However, despite being legal for either medicinal or personal use in nearly 40 states in the US, marijuana remains classified as a Schedule 1 drug on the federal level.

The global cannabis industry, In terms of legal sales of marijuana, represents a market size of close to $44 billion as of 2022 and is expected to grow to over $400 billion by 2030.5

Cannabis, a plant comprising three species, has been used as a medicinal treatment stemming back to 2700 B.C. in eastern societies.1 The term "marijuana" refers to the dried flowers and leaves of the cannabis plant containing a large amount of tetrahydrocannabinol (THC), the product responsible for the effects on a person's mental state.2 The term "cannabis" refers to products derived from the plant, Cannabis sativa, which contains over 500 chemical substances.3 It's important to note that medical marijuana shares the same characteristics and chemicals found in recreational marijuana but is used for medical purposes.4

Current legal status in the US

While most states' laws now allow legal purchase of cannabis products for medical or recreational use (more than 80% including the District of Columbia), it remains illegal under federal law.6 Consumable food items containing substances found in cannabis, such as cannabinoids (THC) or cannabidiol (CBD), cannot be sold in interstate commerce under federal law and are also subject to individual states' laws and regulations.3

Under state laws that permit such use, access to medical marijuana generally requires a written recommendation from a licensed physician for qualifying conditions. However, not all physicians in states where medical usage is legal are willing to prescribe it for qualifying patients, and approved conditions vary by state.4

FDA-approved cannabis products

As of 2024, only a few cannabis products have FDA approval. These approved therapies include Epidiolex (which is CBD) and three synthetic cannabis-related drugs: Marinol, Syndros and Cesamet.7

  • Epidiolex, an oral solution approved in 2018, has been deemed safe and effective by the FDA for treating seizures associated with Lennox-Gastaut or Dravet syndrome in patients aged 2 and older.7, 8
  • Marinol and Syndros are approved for managing chemotherapy-induced nausea in cancer patients and treating anorexia in AIDS patients.
  • Cesamet is only approved for chemotherapy-induced nausea.

The FDA recognizes the current prescribing practices in states where cannabis dispensing is legal for various conditions such as severe pain, multiple sclerosis, glaucoma, extreme weight loss and post-traumatic stress disorder (PTSD), among others. However, until recently, there's been limited clinical evidence supporting the efficacy of using medical marijuana to treat these conditions or their related symptoms. Like mainstream prescription medications, cannabis products for unapproved off-label conditions may carry unpredictable or unintentional consequences and potentially serious safety risks.

A significant obstacle to providing medically reviewed and approved clinical testing for cannabis in managing chronic conditions is its classification as a Schedule 1 substance — largely due to the psychoactive intoxicating side effects of THC and its potential for abuse.

Recent developments

In late 2022, President Joe Biden signed the Medical Marijuana and Cannabidiol Research Expansion Act, removing previous barriers to cannabis research on a federal level.9 Despite maintaining its Schedule 1 status, the Act opened the door to understanding the medicinal properties of cannabis and its potential therapeutic uses, which were previously unknown.

This research, coupled with a potential rescheduling of marijuana, could benefit payors by potentially avoiding additional prescription or medical costs resulting from increased off-label use of medical marijuana in commercial populations.

The effects of this cannabis research are already being felt. In mid-2023, a letter from Health & Human Services (HHS) Assistant Secretary for Health Administration Rachel Levine to the Drug Enforcement Agency (DEA) supported reclassifying marijuana as a Schedule III product, similar to "drugs with a moderate to low potential for physical and psychological dependence."10

Additionally, documentation the FDA released in early 2024 "reflects HHS' evaluation of the scientific and medical evidence and its scheduling recommendation." The FDA Controlled Substance Staff (CSS) noted that marijuana represents a lower potential risk for abuse than other Schedule I and II substances and shares withdrawal symptoms similar to those associated with chronic use of FDA-approved products such as Marinol and Syndros that use synthetic THC.10

Physiological response and acceptance

Understanding the complete and complex physiological response to cannabis consumption is crucial for its broader acceptance in the medical community. Concerns about side effects and potential abuse aren't unique to cannabis; they also exist with other FDA-approved medications. Regular ingestion of physician-prescribed or over-the-counter medications can lead to side effects that range from skin irritation, nausea, and drowsiness to life-threatening anaphylactic reactions.11

Similarly, the potential for abuse in legally prescribed medications extends far beyond cannabis. Other FDA-approved prescriptions — such as opioids like oxycodone, hydrocodone and morphine — have been well documented for their severe risk of abuse, dependence and harmful side effects, yet saw a significant increase in prescribing trends over the past decade.12 Interestingly, opioids are approved to treat pain related to cancer as well as chronic pain, conditions that medical marijuana could potentially address with further research.12

According to the most recent FDA letter to the DEA, there's "some credible level of scientific support" for marijuana use for pain relief and nausea from chemotherapy. However, its safety and effectiveness have yet to be established.10 When looking at its use in older adults or those with comorbidities who are already treated with multiple medications, there's still much to understand when introducing marijuana to the list of consumed substances and how those chemicals interact.13

Today's healthcare coverage of cannabis products, or lack thereof, poses a short-term challenge to the medical marijuana industry, because financial responsibility falls 100% on the patients.

Because cannabis products are self-pay, individuals must continue to acquire them outside of their health plan's purview. While this rule may limit financial exposure for plans, it also affects what information physicians, pharmacists and benefit providers can access regarding a patient's complete health activity and history.

Impact on employers and payors

Currently, marijuana claims aren't covered by insurance and aren't for formulary placement or preference.14 Additionally, neither cannabis nor medical marijuana cards are eligible expenses through pre-tax spending accounts like flexible spending account (FSA) or health saving account(HAS) programs due to federal illegality. Government programs like Medicare and Medicaid also don't cover cannabis because it's classified as a Schedule I controlled substance federally.15

However, recent FDA recommendations on revised scheduling raise the possibility of change. If change occurs, employers will need to consider policies around marijuana usage in the workplace.

How employers can address cannabis use by employees

Even before additional research and clinical applications around cannabis evolve, marijuana usage is expected to grow. HR teams should actively outline what will be tolerated regarding marijuana use in the workplace, review state-by-state laws around testing and off-duty use, and actively update policy and procedures regarding marijuana and the workplace. 16

Regardless of the outcome of broader medical research, employers need to carefully handle employee matters around cannabis consumption (whether on company or personal time) especially when prescribed by a physician. Workplace issues involving cannabis are best handled by HR. Depending on an individual's health or medical scenario, the response could include making appropriate accommodations for an employee.

As demonstrated above, social acceptance and use of cannabis have changed dramatically in recent years. So, too, should company policy and procedures as this issue could have broader implications around legal liability. In the short term, a one-size-fits-all-solution isn't feasible. We're likely to see organizations handle cannabis in the workplace differently, based on industry, local and state laws, and employee demographics.16

Outlook and conclusion

The pharmaceutical world is always evolving, and medical marijuana could become a part of it. In the benefit management world, Gallagher can assist clients in seeking cost-effective, employee-friendly, therapeutically sound solutions for organizations and their members. While many questions remain, with the expansion of legalized sales and the forthcoming results of additional clinical research, medical marijuana could potentially blaze a new trail in modern medicine.

Author Information


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11Dillinger, Katherine. "Drug Side Effects Explained," WebMD, 7 Mar 2022.

12Darnall, Beth, Brett Stacy and Roger Chou. "Medical and Psychological Risks and Consequences of Long-Term Opioid Therapy in Women." National Library of Medicine, 20 Aug 2012.

13"Cannabis Side Effects for Senior And Older Adult Patients With Alison Moore, MD, MPH," American Medical Association, accessed 5 Mar, 2024.

14O'Brian, Ann and Christopher Huelsman. Personal interview. 19 Jan 2024.

15Magrabi, Tina. "Why Don't FSAs and HSAs Allow Reimbursement for Cannabis?," Leafwell, accessed 5 Mar, 2024.

16Wulffson, Todd. "Evolving Cannabis Laws: 3 Common Mistakes Employers Should Avoid," HR Morning, 3 Jan 2024.


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