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

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  • David Powell
  • Rosalie Liccardo Pacula
  • Erin Taylor

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

  • David Powell & Rosalie Liccardo Pacula & Erin Taylor, 2015. "How Increasing Medical Access to Opioids Contributes to the Opioid Epidemic: Evidence from Medicare Part D," NBER Working Papers 21072, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:21072
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    References listed on IDEAS

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    Cited by:

    1. Christopher J. Ruhm, 2018. "Deaths of Despair or Drug Problems?," NBER Working Papers 24188, National Bureau of Economic Research, Inc.
    2. Harris, Matthew & Kessler, Lawrence & Murray, Matthew & Glenn, Beth, 2017. "Prescription Opioids and Labor Market Pains: The Effect of Schedule II Opioids on Labor Force Participation and Unemployment," MPRA Paper 86586, University Library of Munich, Germany, revised 28 Mar 2018.
    3. Marianne Simonsen & Lars Skipper & Niels Skipper, 2017. "Piling Pills? Forward-Looking Behavior and Stockpiling of Prescription Drugs," Economics Working Papers 2017-08, Department of Economics and Business Economics, Aarhus University.
    4. repec:eee:pubeco:v:165:y:2018:i:c:p:170-200 is not listed on IDEAS
    5. Padmaja Ayyagari, 2016. "Prescription drug coverage and chronic pain," International Journal of Health Economics and Management, Springer, vol. 16(2), pages 189-200, June.

    More about this item

    JEL classification:

    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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