The Biden administration’s recent decision to reschedule marijuana from an illegal drug to one that could be accessed at a pharmacy with a prescription could change the way the workers compensation industry views cannabis. 

The U.S. Drug Enforcement Administration in May said the process is underway to move cannabis from Schedule I to Schedule III of the Controlled Substance Act, putting it on par with prescription drugs it says have “moderate to low potential for physical and psychological dependence,” such as some painkillers (see box). 

The move, which could be months or years away, is in line with recommendations from the U.S. Department of Health and Human Services and a promise by the Biden administration. Thirty-eight states and the District of Columbia permit medical use of cannabis products. 

For the workers comp industry, which has been compelled to cover medical marijuana for injured workers by court rulings in states that allow it as a treatment for such issues as pain and anxiety, the change would help put to rest questions many comp experts have concerning medical marijuana: What are the appropriate dosages? What are the side effects? What are the adverse effects? Are there any drug interactions? 

So far, courts in Connecticut, New Hampshire, New Jersey, New Mexico, New York and Pennsylvania have required insurers and employers to reimburse injured workers’ medical marijuana costs. Insurers in several cases argued against covering medical marijuana, saying the effects of the substances are unclear and workers comp would be on the hook if an injured worker suffers a negative side effect. And studies on the issue have provided mixed results, or even raised more questions (see related story). 

“To mitigate unintended consequences, marijuana really needs to be further studied to assess safety and efficacy and production across providers needs to ensure consistent potency is delivered in dosing,” said Silvia Sacalis, Tampa, Florida-based vice president of clinical services for Healthesystems LLC.

Workers comp insurers must tread carefully with medical marijuana because of all the unknowns, said Rich Ives, Hartford, Connecticut-based vice president, business insurance claims, at Travelers Cos. Inc. 

“There’s very little to no medical science. How do you know that you’re prescribing the right amount? The dosage? The side effects?” he said.

Brian Allen, Salt Lake City-based vice president of government affairs for Enlyte LLC, said “scrutiny on efficacy” is lacking. “Once it becomes a Schedule III drug and falls under the purview of the (U.S. Food and Drug Administration), it’s going to be treated like any other prescription drug from a regulatory standpoint.” 

Gaining approval by the FDA, which also has the power to remove drugs from the market, includes a review of studies by its Center for Drug Evaluation and Research, comprised of a panel of physicians, statisticians, chemists, pharmacologists, and scientists that weigh a drug’s benefits against its risks. According to the FDA’s guidelines on its processes, “If this independent and unbiased review establishes that a drug’s health benefits outweigh its known risks, the drug is approved for sale.”

Mr. Allen said the medical marijuana industry will “have to demonstrate through clinical trials that the drug actually works for what they say it works for.” 

Today, “the evidence just isn’t there,” said Dr. Marcos Iglesias, Hartford, Connecticut-based chief medical director at Travelers. 

The comp industry has faced hurdles in endorsing the use of the drug since California became the first state to approve it as a medical treatment in 1996. Medical marijuana, for example, is not on any state formulary for treating injured workers — meaning there has essentially been no approved treatment guide for claims handlers to consult when approving drugs. 

Also, insurers reimbursing for medical marijuana face problems using the banking system, which experts have said would be in violation of federal law.

Dr. Teresa Bartlett, Troy, Michigan-based managing director, senior medical officer, at third-party administrator Sedgwick Claims Management Services Inc., said the move toward FDA approval would be “a good thing.” 

“The purity and doses would be regulated, at least in the legal distribution channels,” Dr. Bartlett wrote in an email. State laws, she said, may still permit versions of marijuana that the FDA does not vet and court battles over federal and state statutes could continue. 

“This will be complicated, but at the same time it has been a long time coming,” Dr. Bartlett wrote.