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The Impact of Medical Cannabis Legalization on Prescription Medication Use and Costs under Medicare Part D

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  • Ashley C. Bradford
  • W. David Bradford

Abstract

In the past 20 years, the drive to legalize medical cannabis has gained national attention with the public and policy makers. However, little is known about whether medical cannabis is being used clinically to any significant degree. Using data on all prescriptions filled by Medicare Part D enrollees in the United States from 2010 to 2015, we find that the use of prescription drugs for which cannabis could serve as a clinical alternative fell significantly once a medical cannabis law (MCL) was put in place. Overall savings to the Medicare program when states implement MCLs are estimated to have been as much as $638.8 million per year by 2015. Counterfactually, if all states had adopted dispensary-based MCLs by 2015, we estimate that programmatic savings would have been between $1.4 and $1.7 billion. The availability of medical cannabis has a significant effect on prescribing patterns and spending under Medicare Part D.

Suggested Citation

  • Ashley C. Bradford & W. David Bradford, 2018. "The Impact of Medical Cannabis Legalization on Prescription Medication Use and Costs under Medicare Part D," Journal of Law and Economics, University of Chicago Press, vol. 61(3), pages 461-487.
    • Handle: RePEc:ucp:jlawec:doi:10.1086/699620
    DOI: 10.1086/699620
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    Cited by:

    1. Chakraborty Avinandan & Doremus Jacqueline & Stith Sarah, 2021. "The effects of recreational cannabis access on labor markets: evidence from Colorado," IZA Journal of Labor Economics, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 10(1), pages 1-86, January.
    2. Drake, Coleman & Nagy, Dylan & Slusky, David & Eisenberg, Matthew, 2024. "Medical Cannabis Availability and Mental Health: Evidence from New York's Medical Cannabis Program," IZA Discussion Papers 17022, Institute of Labor Economics (IZA).
    3. Sabia, Joseph J. & Dave, Dhaval & Alotaibi, Fawaz & Rees, Daniel I., 2024. "The effects of recreational marijuana laws on drug use and crime," Journal of Public Economics, Elsevier, vol. 234(C).
    4. Jacqueline M. Doremus & Sarah S. Stith & Jacob M. Vigil, 2020. "Off-label use of recreational cannabis: Acid reflux in Colorado," Economics Bulletin, AccessEcon, vol. 40(1), pages 338-348.
    5. Jenny Williams & Rosalie Liccardo Pacula & Rosanna Smart, 2019. "De Facto or De Jure? Ethnic Differences in Quit Responses to Legal Protections of Medical Marijuana Dispensaries," NBER Working Papers 25555, National Bureau of Economic Research, Inc.
    6. Anderson, D. Mark & Rees, Daniel I., 2021. "The Public Health Effects of Legalizing Marijuana," IZA Discussion Papers 14292, Institute of Labor Economics (IZA).
    7. Alex Hollingsworth & Coady Wing & Ashley C. Bradford, 2022. "Comparative Effects of Recreational and Medical Marijuana Laws on Drug Use among Adults and Adolescents," Journal of Law and Economics, University of Chicago Press, vol. 65(3), pages 515-554.
    8. McMichael, Benjamin J. & Van Horn, R. Lawrence & Viscusi, W. Kip, 2020. "The impact of cannabis access laws on opioid prescribing," Journal of Health Economics, Elsevier, vol. 69(C).
    9. Keshar M. Ghimire & Johanna Catherine Maclean, 2020. "Medical marijuana and workers' compensation claiming," Health Economics, John Wiley & Sons, Ltd., vol. 29(4), pages 419-434, April.
    10. Junxing Chay & Seonghoon Kim, 2022. "Heterogeneous health effects of medical marijuana legalization: Evidence from young adults in the United States," Health Economics, John Wiley & Sons, Ltd., vol. 31(2), pages 269-283, February.
    11. Cameron M. Ellis & Martin F. Grace & Rhet A. Smith & Juan Zhang, 2022. "Medical cannabis and automobile accidents: Evidence from auto insurance," Health Economics, John Wiley & Sons, Ltd., vol. 31(9), pages 1878-1897, September.
    12. Michael F. Pesko & Charles J. Courtemanche & Johanna Catherine Maclean, 2019. "The Effects of Traditional Cigarette and E-Cigarette Taxes on Adult Tobacco Product Use," NBER Working Papers 26017, National Bureau of Economic Research, Inc.
    13. Carrieri, Vincenzo & Madio, Leonardo & Principe, Francesco, 2020. "Do-It-Yourself medicine? The impact of light cannabis liberalization on prescription drugs," Journal of Health Economics, Elsevier, vol. 74(C).
    14. Alice M. Ellyson & Jevay Grooms & Alberto Ortega, 2022. "Flipping the script: The effects of opioid prescription monitoring on specialty‐specific provider behavior," Health Economics, John Wiley & Sons, Ltd., vol. 31(2), pages 297-341, February.
    15. Erasmo Giambona & Rafael P. Ribas, 2023. "Unveiling the Price of Obscenity: Evidence From Closing Prostitution Windows in Amsterdam," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 42(3), pages 677-705, June.
    16. Hollingsworth, Alex & Wing, Coady, 2020. "Tactics for design and inference in synthetic control studies: An applied example using high-dimensional data," SocArXiv fc9xt, Center for Open Science.
    17. Thomas Lebesmuehlbacher & Rhet A. Smith, 2021. "The effect of medical cannabis laws on pharmaceutical marketing to physicians," Health Economics, John Wiley & Sons, Ltd., vol. 30(10), pages 2409-2436, September.
    18. Bruijn, L. Michelle & Ribas, Rafael P., 2022. "“No drugs in my back yard:” The ambivalent reception of cannabis retailers," Journal of Economic Behavior & Organization, Elsevier, vol. 199(C), pages 103-121.

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