IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/27520.html
   My bibliography  Save this paper

Competitive Effects of Federal and State Opioid Restrictions: Evidence from the Controlled Substance Laws

Author

Listed:
  • Sumedha Gupta
  • Thuy D. Nguyen
  • Patricia R. Freeman
  • Kosali I. Simon

Abstract

A large concern in U.S. opioid policy is whether supply side controls are effective at reducing the quantity of opioids prescribed, without harmful substitution. An unstudied way that policy targeted a major opioid through the federal Controlled Substance Act (CSA) was the August 2014 scheduling of tramadol products, the second most popular opioid medication at the time. Twelve states implemented the identical policy prior to federal action, providing a unique opportunity to compare effectiveness of the same opioid policy at state versus federal levels. This is important because many recent opioid policy interventions have only taken the form of state actions, while federal policy has largely been advisory. Seven weeks after tramadol's scheduling, the leading opioid form on the market, hydrocodone combination products, was move to the more restricted level II (no refills allowed) from level III in the CSA, allowing us to test a new question in the opioid literature: competitive spillover effects from regulations targeting one drug. Using weekly prescription data spanning 2007-2017, this study finds that tightening prescribing restrictions on one opioid leads to decreases in its use, but also causes some increases in prescriptions of close competitors, leading to no statistically detectable short-run reduction in total opioid prescriptions.

Suggested Citation

  • Sumedha Gupta & Thuy D. Nguyen & Patricia R. Freeman & Kosali I. Simon, 2020. "Competitive Effects of Federal and State Opioid Restrictions: Evidence from the Controlled Substance Laws," NBER Working Papers 27520, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:27520
    Note: EH
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w27520.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Meltem Daysal N. & Orsini Chiara, 2015. "Spillover Effects of Drug Safety Warnings on Preventive Health Care Use," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 15(1), pages 1-30, January.
    2. Chantal Toledo & Sofia Berto Villas-Boas, 2019. "Safe or Not? Consumer Responses to Recalls with Traceability," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 41(3), pages 519-541, September.
    3. Catherine Hausman & David S. Rapson, 2018. "Regression Discontinuity in Time: Considerations for Empirical Applications," Annual Review of Resource Economics, Annual Reviews, vol. 10(1), pages 533-552, October.
    4. Deiana, Claudio & Giua, Ludovica, 2018. "The US Opidemic: Prescription Opioids, Labour Market Conditions and Crime," MPRA Paper 85712, University Library of Munich, Germany.
    5. Angélica Meinhofer, 2018. "Prescription Drug Monitoring Programs: The Role of Asymmetric Information on Drug Availability and Abuse," American Journal of Health Economics, University of Chicago Press, vol. 4(4), pages 504-526, Fall.
    6. Seth Freedman & Melissa Kearney & Mara Lederman, 2012. "Product Recalls, Imperfect Information, and Spillover Effects: Lessons from the Consumer Response to the 2007 Toy Recalls," The Review of Economics and Statistics, MIT Press, vol. 94(2), pages 499-516, May.
    7. Collins, J. Michael & Simon, Kosali I. & Tennyson, Sharon, 2013. "Drug withdrawals and the utilization of therapeutic substitutes: The case of Vioxx," Journal of Economic Behavior & Organization, Elsevier, vol. 86(C), pages 148-168.
    8. William N. Evans & Ethan M. J. Lieber & Patrick Power, 2019. "How the Reformulation of OxyContin Ignited the Heroin Epidemic," The Review of Economics and Statistics, MIT Press, vol. 101(1), pages 1-15, March.
    9. Hollingsworth, Alex & Ruhm, Christopher J. & Simon, Kosali, 2017. "Macroeconomic conditions and opioid abuse," Journal of Health Economics, Elsevier, vol. 56(C), pages 222-233.
    10. John Romley & Tiffany Shih, 2017. "Product safety spillovers and market viability for biologic drugs," International Journal of Health Economics and Management, Springer, vol. 17(2), pages 135-158, June.
    11. Thuy D. Nguyen & W. David Bradford & Kosali I. Simon, 2019. "How do Opioid Prescribing Restrictions Affect Pharmaceutical Promotion? Lessons from the Mandatory Access Prescription Drug Monitoring Programs," NBER Working Papers 26356, National Bureau of Economic Research, Inc.
    12. Kristy Parkinson & Joseph Price & Kosali Simon & Sharon Tennyson, 2014. "The influence of FDA advisory information and black box warnings on individual use of prescription antidepressants," Review of Economics of the Household, Springer, vol. 12(4), pages 771-790, December.
    13. Engy Ziedan & Robert Kaestner, 2020. "Effect of Prescription Opioids and Prescription Opioid Control Policies on Infant Health," NBER Working Papers 26749, National Bureau of Economic Research, Inc.
    14. Robert Kaestner & Engy Ziedan, 2019. "Mortality and Socioeconomic Consequences of Prescription Opioids: Evidence from State Policies," NBER Working Papers 26135, National Bureau of Economic Research, Inc.
    15. Hahn, Jinyong & Todd, Petra & Van der Klaauw, Wilbert, 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design," Econometrica, Econometric Society, vol. 69(1), pages 201-209, January.
    16. Ioana Popovici & Johanna Catherine Maclean & Bushra Hijazi & Sharmini Radakrishnan, 2018. "The effect of state laws designed to prevent nonmedical prescription opioid use on overdose deaths and treatment," Health Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 294-305, February.
    17. Angélica Meinhofer, 2018. "Prescription Drug Monitoring Programs: The Role of Asymmetric Information on Drug Availability and Abuse," American Journal of Health Economics, MIT Press, vol. 4(4), pages 504-526, Fall.
    18. Abby Alpert & David Powell & Rosalie Liccardo Pacula, 2018. "Supply-Side Drug Policy in the Presence of Substitutes: Evidence from the Introduction of Abuse-Deterrent Opioids," American Economic Journal: Economic Policy, American Economic Association, vol. 10(4), pages 1-35, November.
    19. Bütikofer, Aline & Cronin, Christopher J. & Skira, Meghan M., 2020. "Employment effects of healthcare policy: Evidence from the 2007 FDA black box warning on antidepressants," Journal of Health Economics, Elsevier, vol. 73(C).
    20. Sacks, Daniel W. & Hollingsworth, Alex & Nguyen, Thuy & Simon, Kosali, 2021. "Can policy affect initiation of addictive substance use? Evidence from opioid prescribing," Journal of Health Economics, Elsevier, vol. 76(C).
    21. Anca M. Grecu & Dhaval M. Dave & Henry Saffer, 2019. "Mandatory Access Prescription Drug Monitoring Programs and Prescription Drug Abuse," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 38(1), pages 181-209, January.
    22. McCrary, Justin, 2008. "Manipulation of the running variable in the regression discontinuity design: A density test," Journal of Econometrics, Elsevier, vol. 142(2), pages 698-714, February.
    23. Abby E. Alpert & Sarah E. Dykstra & Mireille Jacobson, 2020. "How Do Prescription Drug Monitoring Programs Reduce Opioid Prescribing? The Role of Hassle Costs versus Information," NBER Working Papers 27584, National Bureau of Economic Research, Inc.
    24. Ram Bala & Pradeep Bhardwaj & Pradeep K. Chintagunta, 2017. "Pharmaceutical Product Recalls: Category Effects and Competitor Response," Marketing Science, INFORMS, vol. 36(6), pages 931-943, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Johanna Catherine Maclean & Justine Mallatt & Christopher J. Ruhm & Kosali Simon, 2022. "The Opioid Crisis, Health, Healthcare, and Crime: A Review of Quasi-Experimental Economic Studies," The ANNALS of the American Academy of Political and Social Science, , vol. 703(1), pages 15-49, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Johanna Catherine Maclean & Justine Mallatt & Christopher J. Ruhm & Kosali Simon, 2022. "The Opioid Crisis, Health, Healthcare, and Crime: A Review of Quasi-Experimental Economic Studies," The ANNALS of the American Academy of Political and Social Science, , vol. 703(1), pages 15-49, September.
    2. Simone Balestra & Helge Liebert & Nicole Maestas & Tisamarie B. Sherry, 2021. "Behavioral Responses to Supply-Side Drug Policy During the Opioid Epidemic," NBER Working Papers 29596, National Bureau of Economic Research, Inc.
    3. Shishir Shakya & Collin Hodges, 2023. "Must‐access prescription drug monitoring programs and retail opioid sales," Contemporary Economic Policy, Western Economic Association International, vol. 41(1), pages 146-165, January.
    4. Dhaval Dave & Monica Deza & Brady Horn, 2021. "Prescription drug monitoring programs, opioid abuse, and crime," Southern Economic Journal, John Wiley & Sons, vol. 87(3), pages 808-848, January.
    5. Kim, Bokyung, 2021. "Must-access prescription drug monitoring programs and the opioid overdose epidemic: The unintended consequences," Journal of Health Economics, Elsevier, vol. 75(C).
    6. David Powell & Rosalie Liccardo Pacula, 2021. "The Evolving Consequences of OxyContin Reformulation on Drug Overdoses," American Journal of Health Economics, University of Chicago Press, vol. 7(1), pages 41-67.
    7. Janssen, Aljoscha & Zhang, Xuan, 2020. "Retail Pharmacies and Drug Diversion during the Opioid Epidemic," Working Paper Series 1373, Research Institute of Industrial Economics.
    8. David Cho & Daniel I. García & Joshua Montes & Alison E. Weingarden, 2021. "Labor Market Effects of the Oxycodone-Heroin Epidemic," Finance and Economics Discussion Series 2021-025, Board of Governors of the Federal Reserve System (U.S.).
    9. Janet Currie & Hannes Schwandt, 2020. "The Opioid Epidemic Was Not Primarily Caused by Economic Distress But by Other Factors that Can be More Readily Addressed," Working Papers 2020-25, Princeton University. Economics Department..
    10. Daniele, Gianmarco & Le Moglie, Marco & Masera, Federico, 2023. "Pains, guns and moves: The effect of the U.S. opioid epidemic on Mexican migration," Journal of Development Economics, Elsevier, vol. 160(C).
    11. Thomas C. Buchmueller & Colleen M. Carey & Giacomo Meille, 2020. "How well do doctors know their patients? Evidence from a mandatory access prescription drug monitoring program," Health Economics, John Wiley & Sons, Ltd., vol. 29(9), pages 957-974, September.
    12. Abouk, Rahi & Powell, David, 2021. "Can electronic prescribing mandates reduce opioid-related overdoses?," Economics & Human Biology, Elsevier, vol. 42(C).
    13. Thuy D. Nguyen & W. David Bradford & Kosali I. Simon, 2019. "How do Opioid Prescribing Restrictions Affect Pharmaceutical Promotion? Lessons from the Mandatory Access Prescription Drug Monitoring Programs," NBER Working Papers 26356, National Bureau of Economic Research, Inc.
    14. Bhashkar Mazumder, 2023. "The Effects of Prescription Drug Monitoring Programs on Labor Market Activity and Credit Outcomes," Working Paper Series WP 2023-13, Federal Reserve Bank of Chicago.
    15. Aliprantis, Dionissi & Fee, Kyle & Schweitzer, Mark E., 2023. "Opioids and the labor market," Labour Economics, Elsevier, vol. 85(C).
    16. Alice M. Ellyson & Jevay Grooms & Alberto Ortega, 2022. "Flipping the script: The effects of opioid prescription monitoring on specialty‐specific provider behavior," Health Economics, John Wiley & Sons, Ltd., vol. 31(2), pages 297-341, February.
    17. Lawler, Emily C. & Skira, Meghan M., 2022. "Information shocks and pharmaceutical firms’ marketing efforts: Evidence from the Chantix black box warning removal," Journal of Health Economics, Elsevier, vol. 81(C).
    18. Claudio Deiana & Ludovica Giua & Roberto Nisticò, 2019. "The Economics Behind the Epidemic: Afghan Opium Price and Prescription Opioids in the US," CSEF Working Papers 525, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 13 May 2019.
    19. Carolina Arteaga Cabrales & Victoria Barone, 2021. "The Opioid Epidemic: Causes and Consequences," Working Papers tecipa-698, University of Toronto, Department of Economics.
    20. David Cho & Alvaro Mezza & Joshua Montes, 2022. "Choices and Implications when Measuring the Local Supply of Prescription Opioids," Finance and Economics Discussion Series 2022-078, Board of Governors of the Federal Reserve System (U.S.).

    More about this item

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:27520. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.