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Recreational cannabis legalizations associated with reductions in prescription drug utilization among Medicaid enrollees

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  • Shyam Raman
  • Ashley C. Bradford

Abstract

The potential substitution of cannabis for prescription medication has attracted a substantial amount of attention within the context of medical cannabis laws (MCLs). However, much less is known about the association between recreational cannabis laws (RCLs) and prescription drug use. With recent evidence supporting substitution of cannabis for prescription drugs following MCLs, it is reasonable to ask what effect RCLs may have on those outcomes. We use quarterly data for all Medicaid prescriptions from 2011 to 2019 to investigate the effect of state‐level RCLs on prescription drug utilization. We estimate this effect with a series of two‐way fixed effects event study models. We find significant reductions in the volume of prescriptions within the drug classes that align with the medical indications for pain, depression, anxiety, sleep, psychosis, and seizures. Our results suggest substitution away from prescription drugs and potential cost savings for state Medicaid programs.

Suggested Citation

  • Shyam Raman & Ashley C. Bradford, 2022. "Recreational cannabis legalizations associated with reductions in prescription drug utilization among Medicaid enrollees," Health Economics, John Wiley & Sons, Ltd., vol. 31(7), pages 1513-1521, July.
    • Handle: RePEc:wly:hlthec:v:31:y:2022:i:7:p:1513-1521
    DOI: 10.1002/hec.4519
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    References listed on IDEAS

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    1. 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.
    2. Chelsea L. Shover & Corey S. Davis & Sanford C. Gordon & Keith Humphreys, 2019. "Association between medical cannabis laws and opioid overdose mortality has reversed over time," Proceedings of the National Academy of Sciences, Proceedings of the National Academy of Sciences, vol. 116(26), pages 12624-12626, June.
    3. Powell, David & Pacula, Rosalie Liccardo & Jacobson, Mireille, 2018. "Do medical marijuana laws reduce addictions and deaths related to pain killers?," Journal of Health Economics, Elsevier, vol. 58(C), pages 29-42.
    4. Jiebing Wen & Hefei Wen & J. S. Butler & Jeffery C. Talbert, 2021. "The impact of medical and recreational marijuana laws on opioid prescribing in employer‐sponsored health insurance," Health Economics, John Wiley & Sons, Ltd., vol. 30(5), pages 989-1000, May.
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    Cited by:

    1. Rahi Abouk & Keshar M. Ghimire & Johanna Catherine Maclean & David Powell, 2023. "Pain Management and Work Capacity: Evidence From Workers’ Compensation and Marijuana Legalization," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 42(3), pages 737-770, June.
    2. Shyam Raman & Johanna Catherine Maclean & W. David Bradford & Coleman Drake, 2023. "Recreational cannabis and opioid distribution," Health Economics, John Wiley & Sons, Ltd., vol. 32(4), pages 747-754, April.
    3. Ahmed El Fatmaoui, 2024. "From high school to higher education: Is recreational marijuana a consumption amenity for US college students?," Economic Inquiry, Western Economic Association International, vol. 62(3), pages 1024-1045, July.

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