Study links marijuana legalization to lower prescription costs

A recent analysis published in the journal Health Economics reveals that marijuana legalization at the state level correlates with a decrease in prescription drug spending. Researchers from Bowling Green State University in Ohio and Illinois State University examined the effects of cannabis legalization on prescription expenditures among privately insured, working-age adults.

The study found a notable six percent reduction in prescription drug claims for individuals enrolled in small group insurance plans, which are typically offered to employers with fewer than 50 employees. This decline in claims becomes more pronounced over time, reaching statistical significance by the second year following the legalization of recreational cannabis.

In contrast, the researchers did not observe a similar decrease in prescription drug expenditures for enrollees in large group insurance plans. They suggested that this lack of a noticeable effect might be due to larger employers often implementing mandatory drug testing policies for their employees, which could limit cannabis use.

The study’s authors concluded that the legalization of cannabis serves as a viable alternative to conventional prescription medications, particularly for those in the small group insurance market. The findings align with previous research indicating that marijuana legalization can lead to lower healthcare premiums and a reduction in Medicaid expenditures.

Paul Armentano, Deputy Director of NORML, commented on the implications of these findings, noting that cannabis has proven effective in treating various conditions, including chronic pain. He emphasized that as legal access to cannabis expands, more patients are likely to incorporate cannabis into their health management strategies, potentially resulting in decreased reliance on traditional prescription medications.

The full study, titled ‘The effects of medical and recreational cannabis laws on prescription drug claims in commercial group insurance markets,’ is available in the Health Economics journal. For further details on the relationship between marijuana use and prescription drug substitution, NORML provides additional resources through its Fact Sheet on ‘Relationship Between Marijuana and Opioids.’