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You are here: Home / Anderson On Health Insurance / A fun way to reduce drug spending

A fun way to reduce drug spending

by David Anderson|  July 7, 20167:41 am| 18 Comments

This post is in: Anderson On Health Insurance

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From the most recent Health Affairs**:

Using data on all prescriptions filled by Medicare Part D enrollees from 2010 to 2013, we found that the use of prescription drugs for which marijuana could serve as a clinical alternative fell significantly, once a medical marijuana law was implemented. National overall reductions in Medicare program and enrollee spending when states implemented medical marijuana laws were estimated to be $165.2 million per year in 2013.

This is interesting. I would love to see what the impact of Colorado and Oregon Washington going to a full legalization regime in 2014 on their state level drug spending. From a modeling perspective, this could be seen as what happens when a brand drug goes generic or when there is an introduction of a low cost generic near peer to a class that was previously restricted to high cost patent protected drugs.

Drug expert Mark Kleiman has a price estimate of what completely legalized marijuana would cost:

@MarkARKleiman @hamandcheese so tea bag prices not decent glass of wine prices?

— Richard Mayhew (@bjdickmayhew) July 6, 2016

***
Bradford, A. C., & Bradford, W. D. (2016). Medical Marijuana Laws Reduce Prescription Medication Use In Medicare Part D. Health Affairs, 35(7), 1230-1236. doi:10.1377/hlthaff.2015.1661

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Reader Interactions

18Comments

  1. 1.

    Villago Delenda Est

    July 7, 2016 at 8:06 am

    Parasite big pharma execs have a sad.

  2. 2.

    RSR

    July 7, 2016 at 8:07 am

    IIRC, the new PA Med-Mar law doesn’t allow for smoking/vaping. Product must be consumed as edible or in some other form, which I assume will increase costs, and potentially limit access.

    And this looks a little scammy: ‘Pot college’: How to get started in PA’s sure-to-boom medical marijuana industry, but ¯_(ツ)_/¯.

  3. 3.

    Starfish

    July 7, 2016 at 8:15 am

    Here is a price survey for places in Colorado that does not include the 20% or so tax that people pay in certain cities. And it looks like you can grow about six plants for personal use, but only three can be mature plants.

  4. 4.

    Ray Ingles

    July 7, 2016 at 8:31 am

    Were some of the ‘savings’ actually cost-shifting because insurance didn’t cover it and people had to pay out of pocket? That might nudge the numbers a bit if insurance companies had to pay “insurance prices” for it…

  5. 5.

    Aaron Morrow

    July 7, 2016 at 8:55 am

    Link to Considering Marijuana Legalization, Caulkins et al, in case anyone else is curious.

  6. 6.

    MomSense

    July 7, 2016 at 9:06 am

    This may be a weird question but I’m wondering if there is a good testing regime in the states where it is legal. I remember hearing a story in Maine where some consumer group did some random testing and found that some of the medical marijuana contained pesticides and other chemicals. Do the states that have legalized and taxed marijuana have testing or certification programs? I think if I or family members needed it, I’d want to grow it myself.

  7. 7.

    Pogonip

    July 7, 2016 at 9:25 am

    Off this topic, but on yesterday’s topic: another police shooting, this one in Minneapolis; girlfriend remains heroically calm and records the whole thing; Rod Dreher and Washington Post have details.

    Buried in tge Washington Post article is the interesting detail that out of about 500 police shootings this year, about 100 victims were black. Wake up, whites. We are not exempt.

  8. 8.

    Ruckus

    July 7, 2016 at 9:48 am

    @Pogonip:
    That’s about 20%. Isn’t that above their percentage of the population?

    Of course white people are being killed, we have a large percentage of assholes as members of our segment. That’s not in any way intended to say that all those shootings are justified, I’d bet that they are not. It was interesting to follow the Guardian segment last year on the over 1000 police killings, some of the people did seem to be doing quite violent stuff to others at the time.
    I wonder why they aren’t doing the segment again this year.

  9. 9.

    Pogonip

    July 7, 2016 at 9:54 am

    @Ruckus: Don’t know, I missed the last one.

    I feel we all should fear both the legal system and police officers with whom we are not personally acquainted.

  10. 10.

    Oatler.

    July 7, 2016 at 9:56 am

    @MomSense: There is testing going on in Oregon where it’s legal. I don’t expect prohibition states have programs of testing.

  11. 11.

    dr. bloor

    July 7, 2016 at 10:13 am

    Typical Mayhew: come up with a way for the insurance companies to save a few bucks while shifting the costs of Twinkies and Ring Dings on to the plan subscribers.

  12. 12.

    StringOnAStick

    July 7, 2016 at 11:26 am

    There is testing here in CO and there were some recalls.

    On the personal anecdote level, I’ve found edibles and vaping provide equal pain control in my current post surgical state, without the next day mental depression that the prefcribed stuff does to me. I choose the C.B D mix for that, and regular stuff for our super fun se.xy time. Seriously fellow older folks, you should try the latter!

  13. 13.

    TriassicSands

    July 7, 2016 at 11:36 am

    Richard, Washington State was the second state, along with Colorado, that legalized marijuana in 2014. Not Oregon.

  14. 14.

    Richard Mayhew

    July 7, 2016 at 11:52 am

    @TriassicSands: ty, UPDATED

  15. 15.

    otto

    July 7, 2016 at 11:53 am

    I live in Washington State. I had a medical card for about 6 years or so. I thought long and hard before I got a card, because I’m not dying, nor am I in sever pain.

    But, the use of cannabis allows me to take about 20% less of a pharmaceutical that I take for seizures.

    I wouldn’t rely on cannabis alone to do that job.

    I looked at it as a moral issue where I didn’t want to jeopardize a system that provided others with access to cannabis as a much more important part of their healthcare. For me, it was a small part, but I still decided to get a card.

    When we legalized cannabis for recreational use in Washington State, I simply made a cost comparison, and thought about the long term status of legality of cannabis in WA.

    Basically, if I pay 200 bucks to a Naturopath, they will give me a card. With that card, I will be able to not pay taxes on the cannabis I buy.

    I decided that I would just switch to “Over the Counter” medicine, and not bother with the medical system anymore. I also figured that there would be a serious drop off in Patient Access Points (dispensaries) as more and more people dropped out of the medical cannabis system and began to go to one of our many fine recreational cannabis stores.

  16. 16.

    A Democratic Thinker

    July 7, 2016 at 12:04 pm

    We happened to visit old friends in Colorado on the way home from seeing the Grand Canyon in 2014. They took us to a newly opened marijuana store for grins and giggles. It was amazing, the polar opposite of buying pot in any way back in college!

    They checked IDs outside the door into the shop, which was in a small brand new strip mall. Everything was bright white, as much like a pharma lab as possible. Employees all wore white jackets as do pharmacists. There were two sides to the store, one for certified medical users and one for recreational users.

    There were rooms with glass walls, and brightly lit shelves in them, with glass jars covered with stainless lids. You could go over a menu with a staff member, who would describe the differences between strains being grown, and after picking a few, they would bring the jars out for you to inspect, and sniff, before making your choice.

    Then they would seal your purchase into a vial, so that you would have to tear a strip off the lid to open it. We went home and tried it out. Commercial people came by the house to do work, no big deal, including the local District Attorney, as our host would be testifying in a trial coming up.

    Amazing! As legal as having a beer with lunch! and wonderful, just no big deal..

  17. 17.

    Origuy

    July 7, 2016 at 12:13 pm

    There has been a fair amount of research on the pharmacology of marijuana. While THC, which is the main psychoactive ingredient, is the most well-known, there are over 100 cannibinoids. One of them, I think it’s CBG, is particularly effective for muscle spasms. My housemate got some of a strain that is particularly high in that substance. It doesn’t have as much of a psychoactive (high) effect. She takes it before bed.

  18. 18.

    EthylEster

    July 7, 2016 at 12:31 pm

    Followup on otto’s comment: WA is now trying to (figure out how to) combine medical and non-medical MJ into one entity. But the retail grows are not monitored wrt pesticides. Which seems kinda short-sighted. I hope the medical MJ folks succeed in getting better chemical analysis on all MJ. And I hope growing small quantities will eventually be legal here…which was/is OK for medical but not retail currently.

    Happily prices continue to fall. Quality bud under $10/gram. It’s all one-toke dope.

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