The U.S. Opioid Crisis Hits Tasmania’s Poppy Farmers
Glynn Williams, a fifth-generation Australian farmer, is feeling the impact of a public health crisis unfolding 8,000 miles away. His family plants potatoes and raises cattle on Tasmania’s wind-swept northwest. Williams, 48, also grows poppies, the plants that produce the raw opiate in such prescription drugs as oxycodone, which are blamed for an epidemic of overdose deaths in the U.S.
With the U.S. imposing stricter rules on the use of painkillers, demand for the raw material has tumbled. Poppy growers in Tasmania have responded by scaling back or giving up on the crop altogether. The state is the source of about half of global supply, thanks to a 1971 agreement with the Commonwealth of Australia that granted it a decades-long monopoly on poppy cultivation.
Six years ago, poppies covered about a sixth of Williams’s 255-hectare (630-acre) farm. Last year he planted some 14 hectares of the pink-flowering crop and has dialed that back to about 10 hectares this season. “We’ve said, ‘No, we can’t afford to take the risk,’” he says. “We’ve had to recalibrate our farm significantly.”
Tasmanian farmers like Williams are reeling from the impact of government and corporate efforts to stem the abuse of prescription painkillers and their illegal knockoffs. The volume of opioid-based medicines prescribed in the U.S. has dropped 28 percent since 2012 following moves by the Drug Enforcement Agency to tighten access, according to a report published last month by Bloomberg Intelligence. “The prescription branded-opioid market is at its lowest point in almost a decade,” Bloomberg Intelligence analysts Curt Wanek and Elizabeth Krutoholow wrote.
Poppy seeds ready for planting in Launceston, Tasmania.PHOTOGRAPHER: CHRISTINA SIMONS/NYTNS
On Sept. 21, CVS Health Corp., one of the largest drugstore chains in the U.S., announced a series of measures targeting opioid abuse, including a new seven-day limit for certain prescriptions of the addictive drugs. Containing 5 percent of the world’s population, the U.S. consumes an estimated 80 percent of the world’s opioids, Angus Deaton, a British-American economist and 2015 Nobel laureate, told a Senate committee in June.
Thebaine—extracted from poppy straw—is the main opiate alkaloid in oxycodone, and Australia is its largest producer, accounting for 80 percent of global supply in 2015, according to the most recent data from the International Narcotics Control Board, an agency that monitors compliance with United Nations conventions on drugs. Australia’s production of poppy straw plunged to 172 tons in 2015, from 268 tons a year earlier.
Tasmanian farmers will plant about 12,000 hectares of poppies this season, less than half the 2013 harvest of about 28,000 hectares, according to Poppy Growers Tasmania Inc., a trade group that represents about 90 percent of the state’s producers. The decline reflects a steep drop in what processing companies are willing to pay: The crop harvested in January and February of this year was worth about A$35 million ($27 million) at the farm gate, compared with about A$100 million after the 2013 harvest.
“Growers are now looking at the price reductions and asking whether it’s a viable operation,” says Keith Rice, chief executive officer of Poppy Growers Tasmania, which estimates its membership has fallen to about 450 from 850 in 2013. He declined to say how much his members typically receive for their crop.
Tasmania is facing more competition: Three states on the Australian mainland have eased restrictions on poppy growing in recent years. Farmers such as Williams are also having to contend with changes along the supply chain, as two of the country’s three licensed poppy processors have gone through ownership changes in recent years. GlaxoSmithKline Plc sold its business to Sun Pharmaceutical Industries Ltd., India’s largest drugmaker, in 2015. SK Capital Partners LP, a New York-based private equity firm, bought Johnson & Johnson’s Tasmanian Alkaloids subsidiary last year. Prices were not disclosed in either transaction.
Sun Pharma declined to comment on plans for its opiates business. Tasmanian Alkaloids says it’s looking into alternatives to opiates. In May, it formed a partnership with AusCann Group Holdings Ltd., a medicinal marijuana company from Adelaide, in South Australia, to manufacture and distribute cannabis products. “Demand has softened, but Tasmanian Alkaloids is a diverse company that also sells non-controlled finished goods” such as materials that are used to make treatments for conditions other than pain, including obesity and constipation, said Managing Director Doug Blackaby in an emailed response to questions. “We are actively looking at numerous opportunities to diversify our customer and product range.”
The smallest Australian poppy processor, Melbourne-based TPI Enterprises Ltd., also is interested in moving into marijuana: It was recently granted licenses by Australia’s Department of Health for medicinal cannabis cultivation and research.
The company isn’t giving up on opioids, though. On Oct. 3 it completed the acquisition of the opiate ingredients and tablets business of Norway’s Vistin Pharma ASA for A$25.6 million. The only Australian-based processor that’s publicly traded, TPI will have revenue of A$48.9 million in the year ending Dec. 31, 2018, according to analyst estimates compiled by Bloomberg, up from A$10.5 million in 2016. Managing Director Jarrod Ritchie says that despite the opioid backlash in the U.S., companies like his still have room to grow. “Ninety percent of the world’s population doesn’t get access to the cheapest pain relief product, which is morphine,” he says.
As they wait for a rebound in demand, Tasmania’s poppy farmers need to focus on becoming more efficient, according to Rice of Poppy Growers Tasmania. Some growers have managed to boost their yields to an average of about 40 kilograms of active raw material per hectare, up from 25 kilograms five years ago. “It is a really, really tough marketplace out there, and it doesn’t look like it’s improving,” he says. “The only thing at the present time to make it viable is increasing productivity. That’s the message we’re giving our people.”
courtesy of Bloomberg News
Personalities not sound judgement decide policy , those who control the supply chain of all legally prescribed dangerous addictive drugs pass all costs and whatever else they can scam onto the taxpayers . While Australia is going broke the latest medical evidence is now confirming that alcohol causes cancer, our governments consider how much money they can scam when they formulate their drug laws , the governments drug war is going very well every last one of them is at least a millionaire who getting endless presents and gifts.
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