Association for Public Policy Analysis & Management

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 end of 2015, 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: anxiety, depression, glaucoma, pain, psychosis, seizures, sleep disorders, spasticity, and side effects from cancer treatment. There is significant variation between state policies surrounding medical marijuana; for example, states that have adopted some form of a MML more recently have been relatively more restrictive in the range of conditions for which physicians may legally prescribe the substance.  While MMLs have attracted a great deal of popular and academic attention, there is relatively little agreement about the impact of the laws. To date, most studies have focused on whether there are negative externalities, in terms of increases in other illegal drug use, traffic accidents and fatalities, or adolescent educational outcomes.

One issue that has received surprisingly little attention is the question of whether medical marijuana is actually being used clinically to any significant degree.  To the extent that marijuana is used by physicians to manage the conditions for which it has clinical evidence, then one would expect it to be used primarily as a substitute for existing prescription medications - for patients who did not respond to prior therapy, or who respond better to marijuana. Nonetheless, there is only one published study (Bradford and Bradford, 2016) that investigates whether the introduction of medical marijuana changes the prescribing patterns of FDA-approved prescription drugs used to treat the conditions listed above; that study examines the effect of MMLs on Medicare Part D prescribing.

In this paper, we use data on all prescriptions paid for by Medicaid programs in the U.S. from 2000 to 2014 aggregated to the state/quarter/drug level using the Medicaid State Drug Utilization Data (SDUD).  The data is merged to detailed geographic health care related data.  In addition, we use a unique data source to identify which prescription drugs are used on- and off-label for the conditions in question.  We use a series of difference-in-difference models to determine whether Medicaid enrollees in states with an MML have different overall, on-label, and off-label prescription drug use than their counterparts in non-MML states.  Finally, we discuss the implications for patient welfare and the social impact of medical marijuana policies.