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Medical Marijuana States See Reduction in Medicaid and Medicare Prescription Drug Spending

In 2014, estimates suggest Oregon saved $13.7 million on fee-for-service Medicaid prescriptions because of its medical marijuana program.
May 17, 2017

States like Oregon that have legalized medical marijuana are saving a significant amount of money on Medicaid and Medicare prescription costs, according to a new study released in the April edition of Health Affairs.   

W. David Bradford, an economist with the University of Georgia Department of Public Administration and Policy, has been studying the impacts of legal medical marijuana on prescription drug costs in Medicare and Medicaid for the past several years. In a 2016 Health Affairs paper, he estimated medical marijuana states saved $165.2 million on Medicare Part D prescription costs in 2013 (out of the program’s $103 billion 2013 budget). His new paper looks at similar patterns in Medicaid fee-for-service prescriptions, and he found an estimated $475.8 million in savings nationally in 2014 (out of the $23.9 billion spent on the program in 2014) - with $13.7 million estimated savings in Oregon.

“The savings percentages are actually pretty close to each other (for Medicare and Medicaid), despite them serving relatively different populations,” Bradford said. “We can’t see why people are using medical marijuana. But we can see when a state turns on medical marijuana that prescription use falls in areas where medical marijuana can be used.”

Bradford is interested in how medical marijuana is changing prescription drug use and how doctors and patients are adapting. He first looked at Medicare to investigate how older Americans are using medical marijuana. In his new paper, he decided to look at Medicaid to investigate the impacts in a generally younger population.

“What we’d like to know eventually is does the general population respond to medical marijuana like Medicare and Medicaid patients do?” Bradford said. “Are they using it as medicine for similar purposes?”

Courtney Crowell, a spokeswoman for the Oregon Health Authority, said OHA is interested in Bradford’s research and the savings potential for Oregon patients. The agency itself isn’t doing any studies on the topic, she added.

“These studies are examples of why we need more research into the impacts of medical marijuana and the impacts to healthcare, as well as further research into some other activities that OHA has been working on to reduce healthcare costs, like the expanded treatment coverage for low back pain in Medicaid members,” Crowell said.

In the Medicaid study, Bradford and his daughter and co-author, Ashley C. Bradford, collected information about when states passed their medical marijuana laws and the specifics of those laws.

The number of medical marijuana states is expanding rapidly year by year. In 2013, only 17 states and the District of Columbia had some form of medical marijuana. Today, 29 states and the District of Columbia have some form of legal medical marijuana.

The Bradfords then compared that information with state prescription drug use data from the Centers for Medicare and Medicaid Services, which has been collecting drug reimbursement statistics since 1990. They narrowed that data down to only look at prescription drug use for nine conditions in areas where pharmaceuticals could potentially be replaced by medical marijuana: anxiety, depression, glaucoma, nausea, pain, psychosis, seizure disorders, sleep disorders and spasticity.

The study found declining prescription rates in Medicaid fee-for-service in five of those areas for medical marijuana states. It showed a 17 percent reduction in drugs used to treat nausea, a 13 percent reduction in drugs used to treat depression, a 12 percent reduction for drugs used to treat psychosis and seizure disorders, and an 11 percent reduction in drugs used to treat pain.

The researchers found no significant associations between Medicaid drugs used for anxiety, glaucoma, sleep disorders or spasticity and medical marijuana.

In the Medicare Part D study, the researchers looked at the same nine conditions and found declining rates in seven of the nine categories - all but glaucoma and spasticity.

“Pain is the biggest category, and nausea is also big,” Bradford said. “It’s odd because nausea is bigger in Medicaid and pain is a bigger issue in Medicare.”

That may be due to the differences in patient ages in the two groups, he added.

In his next study, Bradford wants to look at how doctors’ prescribing patterns change when patients have access to medical marijuana, he said.

“We can’t see who is using marijuana,” Bradford said. “We just see that people stop using things like pain medication. We want to understand if those effects make sense.”

In medical marijuana states, primary care doctors are sometimes removed from the marijuana prescribing process - since the drug is still classified as Schedule I with no medical value, nationally. That can be problematic because patients don’t always know if a pharmaceutical drug has contraindications with marijuana, he said.  

“With regular pain medications, doctors can look at drug contraindications and also for other health issues like diabetes,” Bradford said. “If a patient goes outside that system and into medical marijuana, and if a doctor isn’t overseeing that care, then overall care may slip.”

He supports rescheduling cannabis to Schedule II or lower, which would make it easier for doctors to prescribe cannabis and manage patient care.

Bradford is also interested in how marijuana can be used to fight the opioid epidemic, which has been rising over the past 15 years and kills about 91 Americans a day, according to the Centers for Disease Control and Prevention.

“Many people start on the path toward misuse and death from a normal prescription,” Bradford said. “What we’re finding is that medical cannabis is diverting a lot of people away from opiate use.”


Submitted by Michael Henderson on Wed, 05/17/2017 - 15:43 Permalink

Based on the current body of evidence that I have personally read and what experts in the field state, there isn't enough evidence to conclude that marijuana has medical benefits. This is not to say marijuana doesn't in fact have medical benefits. Additionally, there certainly isn't enough information to clarify the harms of marijuana. So, at this point, I think it is premature to label marijuana use as medical, and is leaping without looking. 

Second, while marijuana doesn't have the same overdose potential as opioids, that shouldn't suggest it therefore has more value as a treatment. It will no doubt have other serious side effects that haven't been defined. When analyzing different therapeutic options, one has to look at the overall benefits and harms of each option to come to a conculsion which is better and for whom. Whatever schedule it is classified under, physicians simply don't have enough information to recommend it. 


Submitted by Julie Ryder on Fri, 05/19/2017 - 14:52 Permalink

Dr. Henderson's comments, whether intending to or not, make the case for more research!  Physicians and other health care providers and clinicians should be leading the charge to pressure the FDA/DEA to finally reschedule cannabis from CS-1 for many reasons, but the most compelling reason is to open the door for research.  The inability to conduct adequate research is the reason that so much of the information available can be dismissed as "anecdotal."   In my opinion, the FDA's refusal to reschedule cannabis makes a mockery of their entire Controlled Substance Schedule, as well as their integrity. 

That said, Dr. Henderson's assertion that there is insufficient evidence to conclude that cannabis has medical benefits is simply wrong.  And his suggestion that it is "premature" to label cannabis as "medical" is too late--we clearly already have taken that "leap," as evidenced by legislation that calls it such.  The terms "medicinal' and  "medical use" also are indications of the reason(s) an individual uses it and the benefits they experience, more than an indication of approval or acceptance by medical providers. 

Submitted by Michael Henderson on Sat, 05/20/2017 - 17:29 Permalink

It's true that many view marijuana as "medicine", but this is largely anecdotal and thus opinion. There simply aren't enough facts to reasonably conclude with same certainty as other medicines, that there is benefit. We know, based on research, that many diabetic medications reduce the complications of diabetes, but not all prolong life.

Why yes, I am intentionally making the case for further research. Society needs better information about marijuana to combat the many false claims of those profiting from selling marijuana. Legislation does not determine the difference between what is medical and what is not. That's quite silly to think the medical field needs politicians to sign off and endorse what constitutes "medicine." Legislators are easily mislead as they don't have the education or experience in medical science. This is part of the problem with marijuana laws. 

You assert that I am simply wrong, yet provide no counter arguments or evidence. Providing evidence could be difficult, though, as I said above and you agree, that there isn't enough evidence and further research is needed.