Can Marijuana Help Address the U.S. Health Spending Crisis?

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New research shows Medicare spending on prescription drugs has declined in states where pot is legal.

The rising cost of prescription drugs is a bitter pill to swallow for many Americans (and their insurers — Medicare included). So this comes as a bit of good news: In states that have legalized marijuana for medicinal use, spending on prescription drugs has declined.

That’s according to new research from a University of Georgia father-daughter duo, which was recently published in the July issue of the journal Health Affairs.

The study analyzed prescription drug data from Medicare Part D — Medicare’s prescription benefits program — from 2010 to 2013. It focused on nine medical conditions for which marijuana could serve as an alternative treatment, including anxiety, depression, glaucoma, nausea, pain, psychosis, seizures, sleep disorders and spasticity.

After crunching the numbers, the researchers concluded that marijuana use saved Medicare Part D about $165.2 million in 2013 — as many people chose weed instead of prescription drugs to help them with their medical conditions. Marijuana for medical and/or recreational use was legal in 17 states and the District of Columbia at the time of the study. Now it’s legal in 25 states plus the District of Columbia.

The results of the study by professor W. David Bradford and graduate student Ashley Bradford suggest that if all 50 states had medical marijuana provisions in place in 2013, then Medicare Part D could have pocketed about $468 million in total savings that year, as more people chose marijuana, instead of pharmaceuticals, to treat their health ailments.

“When marijuana becomes a medical option for people, then their use of prescription drugs falls,” said David Bradford, a professor of public administration and policy at UGA and co-author of the study with his daughter Ashley Bradford, a graduate student in public administration and policy. “We think that the only plausible mechanism is that people are shifting at least in part toward using marijuana as medicine.”

Although the $468 million in potential savings in 2013 represents just a half a percent of Medicare Part D’s total expenditures, Bradford says it’s still significant.

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

The UGA study is the first of its kind to examine whether legalizing marijuana could help curb rising public health costs and even change doctors’ clinical practice, says NPR.

Despite the change in state laws governing marijuana’s use and sale, the drug is still illegal under federal law, which classifies it as a Schedule I drug along with heroin. Among other things, that means doctors can write patients a note to get weed from a dispensary, but they can’t actually prescribe it. Marijuana also has to be paid for out-of-pocket.

The next study the researchers are planning is designed to analyze marijuana’s potential impact on Medicaid.

Check out our post on retirees and pot: “Forget Florida: Retirees Opting for Pot-Friendly States.”

How do you feel about legalizing marijuana for medicinal purposes? What about recreational purposes? Sound off below or on our Facebook page.

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