Medicaid Use of Some Prescription Drugs Lower in Medical Marijuana States

A new study investigating the link between state medical marijuana laws and Medicaid prescription drug spending has found that states with such laws had lower prescribing rates in 5 of 9 clinical areas examined.

The study, published in Health Affairs, was a follow-up to another article the authors had published in the same journal last June that found medical marijuana laws were associated with significant decreases in prescription drug use among Medicare Part D beneficiaries. According to the researchers, the more recent study afforded an opportunity to assess whether the association persisted in a younger population.

The researchers selected 9 condition groups­­—anxiety, depression, glaucoma, nausea, pain, psychosis, seizure disorders, sleep disorders, and spasticity—that can be treated with FDA-approved drugs and medical marijuana. Using Medicaid prescribing data from all 50 states between 2007 and 2014, the authors then constructed a variable that indicated the average daily doses of FDA-approved prescription drug dispensed per Medicaid beneficiary for each of the 9 clinical areas.

After bivariate statistical analysis based on the legal status of medical marijuana in each state at the time, states without a medical marijuana law had higher doses of each drug dispensed per Medicaid enrollee. Multivariate analyses were then conducted to control for the influence of several potential state-level confounders, like median household income, prescription drug monitoring programs, Medicaid expansion, and legalized recreational marijuana, along with year indicator variables.

For 5 of the 9 clinical areas, there was a significant negative association between the presence of a medical marijuana law and the average number of prescription units filled per quarter. The greatest gap was for drugs used to treat nausea, as these were 17% lower in medical marijuana states. In the 4 other areas (anxiety, glaucoma, sleep disorders, and spasticity) there was no significant association between having a medical marijuana law in place and the amount of prescriptions filled.

Using CMS data on costs per dose of drug, the researchers calculated the savings resulting from the lowered use of prescription drugs in the states allowing medical marijuana and found that the total Medicaid savings in 2014 reached $475.8 million, or about 2% of all Medicaid spending. They extrapolated based on these savings that fee-for-service Medicaid would have saved $1.01 billion that year nationwide if every state had legalized medical marijuana.

“The reduced spending in Medicaid that we estimated does not represent a pure change in social welfare (as economists would define it), since some of the estimated savings represented

a transfer of costs from the program to its enrollees who chose to pay for marijuana out of pocket,” the authors wrote. “But in times of significant budget pressure, the possible savings of $1.01 billion nationally in spending on prescriptions in fee-for-service Medicaid is significant.”

Furthermore, they wrote that their findings bolstered research on the clinical benefits of marijuana, since it appears that patients and prescribers are treating it like a medicine when it is legally available. They wrote that such data may influence the Drug Enforcement Administration to switch the designation of marijuana from Schedule I, which indicates there are no currently accepted uses for the drug, to Schedule II.

“An important next step in the agenda for medical marijuana law researchers will be to secure data on individual patients over time to assess” the questions that could not be answered by this state-level study, the researchers concluded.