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

Authors

Ashley C. BradfordFollow
W. David BradfordFollow

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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.

Recommended Citation

Bradford, Ashley C. and Bradford, W. David (2018) "The Impact of Medical Cannabis Legalization on Prescription Medication Use and Costs under Medicare Part D," Journal of Law and Economics: Vol. 61: No. 3, Article 4.
Available at: https://chicagounbound.uchicago.edu/jle/vol61/iss3/4