Association for Public Policy Analysis & Management

The opioid addiction crisis in America is bad and growing worse. More than 20 million Americans suffer from an addiction. The Surgeon General’s office has estimated that the yearly losses in productivity, health care costs and criminal justice expenses for alcohol misuse and illicit drug abuse amount to US$442 billion. In 2015, the most recent year for which figures are available from the Centers for Disease Control and Prevention (CDC), more than 52,000 Americans died from drug overdoses. More than 33,000 of these were due to opioids. This means that, compared to 1999, the number of opioid deaths nearly tripled. Prescription opioids, often loosely prescribed, used to treat pain have contributed to the epidemic.

One approach states have taken is the creation of so-called prescription drug monitoring databases. While they vary widely across the country in terms of their requirements, the idea behind them is rather simple. Create a single, state-wide clearinghouse of opioid prescription in order to avoid overprescribing by “doctor shopping.” By now, all states have jumped on the bandwagon. But what is the effect, if any, of prescription drug monitoring databases?

Our paper is the first major empirical assessment of prescription drug monitoring databases. Specifically, we assess the effects of the establishment of such a program in the State of Indiana in 2014 on its surrounding states. We argue that, similar to the squeezing of a balloon, when obtaining prescription opioids became harder in the State of Indiana, prescription seekers moved across the border. However, not all providers in the surrounding states should be affected equally. We argue that the effect is conditioned in two major ways. First, we expect the distance to the Indiana border to have a major conditioning effect: doctors closer to the border should see a larger increase in prescriptions. Second, we expect this effect to be mitigated for those states which also have prescription drug monitoring databases in place.

To assess our hypotheses we utilizes Medicare prescription data from more than 20,000 physicians in Indiana and its surrounding states Illinois (more than 40,000 doctors), Kentucky (more than 14,000 doctors), Michigan (more than 39,000 doctors), and Ohio (more than 42,000 doctors).