Panel:
Is Cannabis a Potential Substitute for Conventional Healthcare?
(Health)
*Names in bold indicate Presenter
Thirty-three U.S. states have legalized cannabis to cover a wide range of medical conditions from pain to post-traumatic stress disorder with potential implications for conventional healthcare providers and consumers. Prior papers studying the effects of cannabis legalization have found that medical cannabis legalization is associated with reduced prescription drug use. The papers in this session contribute to the research area by studying the effects of legalization on pharmaceutical companies, office-based healthcare providers, and consumers of cannabis as medicine. The first paper in this session focuses on stock valuation and price and quantity effects of cannabis legalization on pharmaceutical companies, and shows that both investors and consumers of conventional pharmaceuticals appear to be responding to legalization. The second finds that opioid-related payments to healthcare providers by pharmaceutical companies decreased in association with access to cannabis dispensaries. The last two papers use mobile app-collected data with the first analyzing the effectiveness of cannabis for treating pain and the second studying whether legalization increases access to cannabis differentially among sicker and more risk averse populations or whether the dramatic reduction in costs leads to use for less severe symptoms which respond more moderately to treatment. These four papers contribute to our understanding of how cannabis legalization policies affect conventional healthcare markets and highlight potentially unexpected consequences of cannabis legalization.
The four papers tackle the analysis using a variety of methods. The first draws outcomes and methods from the finance literature to study the impact of legalization on pharmaceutical stock valuations and then utilizes a cross-state difference-in-difference approach to understand the effects of legalization on prices and quantities by type of pharmaceutical manufacturer, generic versus brand. The second and last papers implement cross-state difference-in-difference approaches using Centers for Medicare and Medicaid Open Payments data and app-collected individual cannabis user data, respectively. The third paper on cannabis and pain analyzes app-collected data from tens of thousands of cannabis user sessions with an individual-level mixed effects model.
The four papers in this session together demonstrate the wide-ranging economic effects of the onset of widespread medicinal use of cannabis. From pharmaceutical markets to healthcare providers’ offices, the effects are being felt with long-term implications for these markets. At the same time that legalization is dramatically reducing the costs of using cannabis medicinally, patients are still navigating the use of a highly multi-dimensional product with little to no medical guidance from conventional information sources or providers. These papers highlight important relationships between cannabis access and conventional healthcare services and industries and underscore the magnitude of the potential effects of further increasing access to cannabis through policy changes at both the state and federal levels.
