Impact of drug coverage on mortality

Clayton 2019 is an interesting study on the impact of drug spending on Medicaid beneficiary mortality levels. The author uses variation in the roll out of Medicaid drug coverage by state across different Medicaid eligible groups in order to isolate plausibly exogenous variation in drug expenditures. Using this approach, Clayton finds that: …a $1 increase…

Can legalizing marijuana save lives?

In recent years, a number of states have legalized medical marijuana. While marijuana may not be good for you, can it be used as a substitute for more dangerous substances such as prescription opioids and heroin? To use an analogy, perhaps marijuana is to vaping ans opioids/heroin are to smoking. In fact, a recent paper…

Estimating the price elasticity of demand through value-based formulary designs

In 2010, Premera Blue Cross (Premera), a large nonprofit health plan in the Pacific Northwest implemented a value-based formulary design for its beneficiaries.   In essence, enrollees could purchase high-value treatments for low copayments and low-value treatments for higher copayments.  Can we use this change from more standard to value-base formulary designs to estimate the price elasticity…

The cause of drug violence

According to one former police officer, the effect of drugs themselves are not the main cause of violence: …drug users aren’t responsible for violence–high people just want to enjoy their high.  Drug violence is business violence….the largest causes of drug murders are territorial disputes over market share.  If no one will help you defend your property–you can’t trademark…

Solving the War on Drugs?

Ultimately, the solution to the drug problem might be the solution to the problem of life, which is how to navigate our time here with minimal suffering. Unfortunately, the policy that offers that solution will be not a drug policy but an existential one, and it remains as elusive as ever. Graeme Wood in The…

Medicaid Pays less for Drugs than Medicare

How does it do this?  Through the Medicaid Drug Rebate Program.  Medicaid.gov explains: The Medicaid Drug Rebate Program is a partnership between CMS, State Medicaid Agencies, and participating drug manufacturers that helps to offset the Federal and State costs of most outpatient prescription drugs dispensed to Medicaid patients. Approximately 600 drug manufacturers currently participate in…