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

52 Pages Posted: 12 Oct 2016

See all articles by David Powell

David Powell

RAND Corporation

Rosalie Liccardo Pacula

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

Erin Taylor

RAND Corporation - Santa Monica CA Offices

Date Written: September 14, 2016

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 non-medical 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. 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 non-medical 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

JEL Classification: I11, I12, I13

Suggested Citation

Powell, David and Pacula, Rosalie Liccardo and Taylor, Erin, How Increasing Medical Access to Opioids Contributes to the Opioid Epidemic: Evidence from Medicare Part D (September 14, 2016). RAND Working Paper Series WR- 1169. Available at SSRN: https://ssrn.com/abstract=2851163 or http://dx.doi.org/10.2139/ssrn.2851163

David Powell (Contact Author)

RAND Corporation ( email )

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

Rosalie Liccardo Pacula

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)

1050 Massachusetts Avenue
Cambridge, MA 02138
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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