Medical Marijuana Legalization and Prescription Medication Use in the Medicare Population

In the past 20 years the drive to legalize medical marijuana has gained national attention with the public and policy makers. Beginning in 1996 states started implementing medical marijuana laws (MMLs), and by the summer of 2014, 23 states and the District of Columbia had adopted laws legalizing marijuana use for medical purposes. Marijuana is used clinically to treat a variety of conditions, including chronic pain, nausea, wasting syndrome, glaucoma, acquired immune deficiency syndrome, and side effects from cancer treatment. While MMLs have attracted a great deal of popular and academic attention, there is relatively little agreement about the impact of the laws. One issue that has received surprisingly little attention is the question of whether medical marijuana is actually being used clinically to any significant degree. We study this question using data on all prescriptions filled by Medicare Part D enrollees in the U.S. from 2010 to 2013. Using a series of difference-in-difference models, we find that the use of FDA- approved prescription drugs falls significantly in 6 of 8 measured disease categories and increases for drugs used to treat glaucoma. Overall savings to the Medicare program when states implement MMLs is estimated to be over $167 million per year by 2013.