Study: Medicare Prescription Costs Drop in Wake of Legalized MMJ

While it has been rumored for years that the legalization of medical marijuana in the United States would begin to empty the pockets of the big pharmaceutical companies by making profitable prescription drugs obsolete, a new report indicates that this scenario may not be too far fetched.

In states that have legalized marijuana for medicinal purposes, some of the latest research shows that Medicare claims for prescription medications are on the decline. A study published this week in Health Affairs finds that expenditures for Medicare Part D – the portion of the program that covers prescription costs – are down in medical marijuana states for drugs used to treat conditions ranging from anxiety to chronic pain because patients seem to be gravitating towards the herb as alternative to popping pills.

Researchers say they can pinpoint the link between medical marijuana and the reduction in opioid painkillers and antidepressants because prescription claims for other medications, like blood thinners, for which marijuana is not considered a viable substitute, have remain unchanged in states with medicinal cannabis laws in place.

“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,” reads the abstract of the study.

The study found that medical marijuana, which is now legal in over half the nation, is saving the Medicare program an estimated $165.2 million per year. Researchers went on to say that the legalization of medical marijuana at the national level could easily bump that number in the $470 million mark – significantly cutting Medicare spending.

Although study author W. David Bradford, a professor of public policy at the University of Georgia, is quick to point out that the savings would be a drop in the bucket when compared to the grand scheme of Medicare’s multi-billion dollar price tag, he believes it should be a part of the debate because more Americans are obviously interested in medical marijuana.

“We wouldn’t say that saving money is the reason to adopt this. But it should be part of the discussion,” he said. “We think it’s pretty good indirect evidence that people are using this as medication.”

Researchers found that in state’s with comprehensive medical marijuana laws on the books, there was a drop in prescriptions used to treat “anxiety, depression, nausea, pain, psychosis, seizures, sleep disorders and spasticity,” all conditions for which cannabis is often recommended. Unfortunately, since medical marijuana is not covered by insurance, patients opting to use the herb as a replacement for prescription drugs are forced to cover all of the expense – a bill that can cost hundreds to over $1,000 per month.

However, there have been a lot of rumors this year over whether the U.S. Drug Enforcement Administration will downgrade the classification of the cannabis plant from a Schedule I to a Schedule II before the end of summer. If this happens, it would be Uncle Sam’s way of finally admitting that marijuana has some medicinal value – a move that would give the pharmaceutical companies free reign to get into the business of medical marijuana, which would likely lead to pot products being distributed in major drugstores across the nation that would be covered under most health insurance plans.

But since the U.S. Food and Drug Administration (FDA) is not likely to ever approve a smokeable version of the herb for the nationwide market, experts say the medical marijuana industry should not be too concerned about Big Pharma swooping in and taking over complete control. As it stands, the FDA has only approved clinical trials for two cannabis-based drugs – Sativex and Epidolex – that fall in line with the government’s concept of medicine. However, these drugs have been wrapped up in the research phase for the past several years – a process that pharmaceutical companies, like Pfizer and Merck, would need to endure in order to bring a cannabis product to market in the event of a DEA rescheduling.

“Rescheduling does not automatically create an FDA-approved marijuana pharmaceutical, and does not create any new penalties for state-level marijuana businesses. Because rescheduling has no impact on the administrative deference that the federal government has given state programs, state-legal businesses would operate in exactly the same gray area post-rescheduling as they do now,” reads an article from the Brookings Institution.

Therefore, since the latest research finds that medical marijuana is currently cutting into the prescription drug market, it is almost guaranteed this trend will continue — even if the DEA does reschedule – because the pharmaceutical companies are going to be forced to jump through more hoops to play the game than the average statewide program.

photo: Lochfoot