Medicaid Can Save $1 Billion With Medical Marijuana

By Tom Angell | April 20, 2017

New research indicates that legalizing medical marijuana can lead to significantly reduced healthcare costs.

Spending on prescription drugs through Medicaid is significantly lower in states with medical cannabis laws than in states without medical marijuana, according the study, published Wednesday in the journal Health Affairs.

“If all states had had a medical marijuana law…[annual] total savings for fee-for-service Medicaid could have been $1.01 billion,” wrote David and Ashley Bradford, a father-daughter research team from the University of Georgia.

The results have already caught the eye of Andrey Ostrovsky, Medicaid’s chief medical officer, who shared a link to it on Twitter.

Ostrovsky posted a series of followup tweets indicating he’d like to see even more research on marijuana’s potential to reduce patients’ reliance on other drugs.

Regarding the “constraints” on research that Ostrovsky mentioned in one of his tweets, a separate study published this week in the journal Nature found that the federally-licensed marijuana research supply “has significantly less variety and lower concentrations of cannabinoids than are observed in state-legal U.S. dispensaries” and that government-approved “varieties contain only 27% of the THC levels and as much as 11–23 times the Cannabinol (CBN) content compared to what is available in the state-legal markets.”

Research using only federal product “thus may yield limited insights into the chemical, biological and pharmacological properties, and medical potential of material that is available in the state markets,” the study found.

In addition to the lack of quality of the federal cannabis supply, researchers have also complained that marijuana’s status as a Schedule I drug creates roadblocks to research that don’t exist for studies on other drugs.

David Bradford, the University of Georgia researcher, told MassRoots in an interview that it is “gratifying” to have a key Department of Health and Human Services official like Ostrovsky noticing his work.

“Helping inform policy makers about evidence surrounding policy is a big part of our mission as academics,” he said. “We’re hopeful that this new work that shows the sort of budgetary savings state Medicaid programs can expect from legalizing medical cannabis can also contribute to policy discussions and decisions.”

Bradford added that in light of other recent research and analysis showing marijuana’s medical benefits, “there is no longer any way to apply the controlled substances criteria for Schedule I status to cannabis.”

Noting that Ostrovsky isn’t directly responsible for determining cannabis’s federal classification, Bradford said that he and other federal health officials can still “encourage the DEA or Attorney General to apply the plain language of the Controlled Substances Act and put cannabis much lower on the schedule than Schedule I.”

“Then,” he said, “the states will be free to set cannabis policies as they see fit and we can begin to study what optimal policies should be.”

Medicaid, funded jointly by the federal government and states, helps people with limited financial resources cover healthcare costs.

The Bradfords’ study showed declines in prescription medication use in medical marijuana states across different categories of drugs, with particularly strong drops in the use of nausea and depression drugs. The use of spasticity drugs increased somewhat, however.

The new study is a followup to research the same team published last year which found that medical marijuana states saw lowered prescription drug use and associated spending under Medicare Part D, which covers medication costs for older Americans.

This story was updated to include comment from researcher David Bradford.

Tom Angell

Tom Angell is a senior political correspondent for MassRoots. A 15-year veteran in the cannabis law reform movement, he covers the policy and politics of marijuana. Separately, he serves as chairman of the nonprofit Marijuana Majority and is editor of the daily Marijuana Moment newsletter.

Follow MassRoots

Subscribe to the best cannabis news