A lawsuit against the US Centers for Medicare & Medicaid Services’ (CMS) new hemp and CBD pilot programme is gaining traction as a cannabis biopharmaceutical company seeks to join.
MMJ International Holdings, a developer of plant-derived cannabinoid therapeutics, and its subsidiaries, MMJ BioPharma and MMJ BioPharma Cultivation, have moved to join Smart Approaches to Marijuana (SAM) and other plaintiffs taking action against CMS and federal health officials.
Substance Access Beneficiary Engagement Incentive
The legal battle follows the launch of CMS’ optional Innovation Center programme on 1 April: the Substance Access Beneficiary Engagement Incentive, or BEI.
The BEI allows participating organisations to discuss eligible hemp-derived products with Medicare beneficiaries and furnish them for symptom management.
CMS described eligible hemp products as: “federally legal hemp-derived products containing no more than 0.3% delta-9 THC”.
SAM and co-plaintiffs filed suit on 30 March in the US District Court for the District of Columbia, seeking to block the BEI and alleging that CMS created the pilot without undergoing the formal notice-and-comment process required under the Administrative Procedure Act.
The plaintiffs also submitted that the programme conflicts with the Federal Food, Drug, and Cosmetic Act and with CMS’ previous position that cannabis products are not eligible for Medicare coverage.
Duane Boise, CEO, MMJ International Holdings, said: “A federal pilot built on the 0.3% THC loophole is reshaping cannabinoid access policy – without FDA approval, without reimbursement transparency, and without advance market notice.”
MMJ stated that cannabinoid products should move through the FDA’s botanical drug pathway before receiving federal reimbursement or endorsement.
CMS has argued that the BEI is not a broad Medicare coverage expansion and does not directly reimburse hemp or CBD products in the same way as a traditional Medicare benefit.
Scientific and legal loopholes?
The crux of the debate lies in whether CMS can use an innovation model to create a limited access pathway for hemp-derived CBD products prior to FDA approval as prescription drugs.
Supporters of the BEI argue that it could improve access for patients with chronic conditions, whilst its opponents allege that it endorses unapproved substances without sufficient scientific or legal safeguards.
On 31 March, the court denied the plaintiff’s emergency request for a temporary restraining order, allowing the BEI to launch amid ongoing litigation.
A preliminary injunction hearing will be held on 20 April, which federal defendants are asking the court to postpone.
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