How Increasing Medical Access to Opioids Contributes to the Opioid Epidemic: Evidence from Medicare Part D

51 Pages Posted: 6 Apr 2015

See all articles by Rosalie Liccardo Pacula

Rosalie Liccardo Pacula

Health Economics, Finance and Organization, RAND Corporation; National Bureau of Economic Research (NBER)

David Powell

RAND Corporation

Erin Taylor

RAND Corporation - Santa Monica CA Offices

Date Written: April 2015

Abstract

Drug overdoses involving opioid analgesics have increased dramatically since 1999, representing one of the United States’ top public health crises. Opioids have legitimate medical functions, but improving access may increase abuse rates even among those not prescribed the drugs given that opioids are frequently diverted to nonmedical use. We have little evidence about the causal relationship between increased medical access to opioids and spillovers resulting in abuse. We use the introduction of the Medicare Prescription Drug Benefit Program (Part D) as a large and differential shock to the geographic supply of opioids. We compare growth in opioid supply and abuse rates in states with large 65+ population shares to states with smaller elderly population shares with a focus on abuse among the Medicare-ineligible population. Part D increased opioid utilization for the 65+ population, and we show that this increase in utilization led to significant growth in the overall supply of opioids in high elderly share states relative to low elderly share states. This relative expansion in opioid supply resulted in an escalation in opioid-related substance abuse treatment admissions and opioid-related mortality among the Medicare-ineligible population, implying meaningful spillovers to individuals who did not experience any change in prescription drug benefits. The evidence suggests that increased opioid supply is associated with economically-important levels of diversion for nonmedical purposes. Our estimates imply that a 10% increase in medical opioid distribution leads to a 7.4% increase in opioid-related deaths and a 14.1% increase in substance abuse treatment admission rates for the Medicare-ineligible population.

Suggested Citation

Pacula, Rosalie Liccardo and Powell, David and Taylor, Erin, How Increasing Medical Access to Opioids Contributes to the Opioid Epidemic: Evidence from Medicare Part D (April 2015). NBER Working Paper No. w21072. Available at SSRN: https://ssrn.com/abstract=2590238

Rosalie Liccardo Pacula (Contact Author)

Health Economics, Finance and Organization, RAND Corporation ( email )

P.O. Box 2138
1776 Main Street
Santa Monica, CA 90407-2138
United States
310-393-0411 (Phone)
310-451-6930 (Fax)

National Bureau of Economic Research (NBER)

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David Powell

RAND Corporation ( email )

1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
United States

Erin Taylor

RAND Corporation - Santa Monica CA Offices ( email )

P.O. Box 2138
1776 Main Street
Santa Monica, CA 90407-2138
United States

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