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The Economics of the Opioid Crisis

Paper Session

Saturday, Jan. 4, 2020 10:15 AM - 12:15 PM (PST)

Manchester Grand Hyatt, Solana Beach AB
Hosted By: American Society of Health Economists
  • Chair: M. Kate Bundorf, Stanford University

The Impact of Staggered Benefit Disbursement on Opioid Use, Hospitalizations, and Mortality

Alicia Atwood
,
Vassar College
Lindsay Allen
,
West Virginia University
Rachel Harrington
,
National Committee for Quality Assurance
Nathan Pauly
,
West Virginia University
Sabrina Young
,
University of Illinois-Chicago

Abstract

A commonly recommended policy to alleviate substance misuse is to distribute government welfare benefits to recipients multiple times a month, rather than in a single lump sum payment. Among illicit substances, opioids are particularly deadly. The opioid epidemic has disproportionately affected low-income individuals that receive government welfare benefits. West Virginia (WV) has the highest opioid-related death rate in the country. One of the poorest US states, WV relies heavily on government cash transfer programs, specifically Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TANF). Our project provides the first causal evidence on the relationship between income transfers and opioid misuse.

Government income transfers, including SNAP and TANF, are disbursed to each household once monthly. It is common to receive both SNAP and TANF benefits on the same day. However, WV distributes TANF to everyone on the 1st of the month, but distributes SNAP during one of the first nine days of the month according to the first letter of the last name. This distribution schedule offers a randomized natural experiment for studying the causal impact that timing and number of benefit disbursement days has on opioid misuse.

Leveraging the random assignment of SNAP distribution day and the first of the month TANF receipt, we estimate the impact of multiple benefit distribution days across the month compared to a single distribution day. We find that those with multiple distribution days are 26% less likely to have an opioid use disorder-related event during the month. Further, we find that these effects are heterogeneous according to the size of the transfer, relative to total household income; among households that receive multiple payments, those for whom SNAP payments represent a greater share of their total income are 33% less likely to have an opioid-related event.

Can policy affect initiation of addictive substance use? Evidence from opioid prescribing

Daniel Sacks
,
Indiana University
Alex Hollingsworth
,
Indiana University
Thuy Nguyen
,
Indiana University
Kosali Simon
,
Indiana University

Abstract

Drug control policy can have unintended consequences by pushing existing users to alternative, possibly more dangerous substances. Policies that target only new users may therefore be especially promising. Using commercial insurance claims data, we provide the first evidence on a set of new policies intended to reduce opioid initiation in the form of limits on initial prescription length. We also provide the first evidence on the impact of must-access prescription drug monitoring programs (MA-PDMPs), laws that do not target new users, on initial opioid use. Although initial limit policies reduce the average length of initial prescriptions, they do so primarily by raising the frequency of short prescriptions, resulting in increases in opioids dispensed to new users. In contrast, we find that MA-PDMPs reduce opioids dispensed to new users, even though they do not explicitly set out to do so. Neither policy significantly affects extreme use such as doctor shopping among new patients, because such behavior is very rare.

Opioids and Organs: How Overdoses Affect the Supply of Donors, Waiting Lists, and Transplant Outcomes

Keith Teltser
,
Georgia State University
Stacy Dickert-Conlin
,
Michigan State University
Todd Elder
,
Michigan State University
Bethany Lemont
,
Ohio University

Abstract

As fatal drug overdoses have rapidly grown in recent years, patients awaiting organ transplants may be the unintended beneficiaries. In 2015, 52,404 people died due to drug overdose, 6,547 patients died while waiting for an organ transplant, and an additional 6,281 patients were removed from waiting lists because they were too sick to accept a transplant. In the same year, drug intoxication deaths yielded 848 deceased organ donors (9%) and 2,665 organ transplants (8%). In this paper, we use mortality data from the National Vital Statistics System, as well as restricted-use data on transplant candidates and recipients from the Scientific Registry of Transplant Recipients, to study the extent to which the recent growth in fatal drug overdoses impacts the supply of deceased organ donations and transplants. We find that for every 100 opioid overdose deaths, organ supply increases by 4 transplants generated by 1.5 additional donors. Nearly all of this association is concentrated among donors aged 18-50, who account for the majority of opioid overdose victims. Unlike supply shocks generated by motorcycle helmet law repeals, our preliminary results suggest that opioid-driven supply shocks do not induce demand-side responses. In particular, candidates do not appear to change their waitlisting behavior (i.e. where and on how many waitlists to register), nor do they appear to substitute away from living donors.

Origins of the Opioid Crisis and Its Enduring Impacts

Abby Alpert
,
University of Pennsylvania
William N. Evans
,
University of Notre Dame
Ethan M.J. Lieber
,
University of Notre Dame
David Powell
,
RAND Corporation

Abstract

Overdoses involving opioids have increased dramatically since the mid-1990's, leading to the worst drug overdose epidemic in U.S. history. There are many hypotheses about the origins of this epidemic, but little empirical evidence on the initial causes. We examine the role of the 1996 introduction and marketing of OxyContin as a potential leading cause of the opioid crisis. Since OxyContin's launch occurred nationally, quantifying its effects presents an empirical challenge. We leverage information about variation in OxyContin’s early marketing obtained from recently-unsealed court case documents from lawsuits against Purdue Pharma which contain the detailed launch plan for this drug. These documents reveal that state-based Triplicate Prescription Programs (an early version of Prescription Drug Monitoring Programs) posed a major obstacle to sales of OxyContin and suggest that less marketing was targeted to these states. Consequently, these states were less exposed to OxyContin’s introduction and we use this variation to identify its short and long run effects.

We find that the supply of OxyContin was about 50% lower in these “triplicate states” in the years immediately after the launch. Prior to OxyContin's launch, triplicate states had higher rates of overdose deaths, but within a few years after the launch of OxyContin, this relationship had flipped and the triplicate states saw substantially slower growth in overdose deaths, leading to some of the lowest overdose rates in the country even twenty years after OxyContin's introduction. Our results suggest a leading role of OxyContin in explaining the rise in overdoses that began in the mid-1990s. This evidence shows the importance of initial conditions, particularly the policy landscape, in explaining the long-term effects of the opioid crisis. These initial conditions have had dramatic and enduring effects and contribute to the geographic variation in overdoses that are observed even today.
Discussant(s)
Christopher Ruhm
,
University of Virginia
Mireille Jacobson
,
University of Southern California
Joseph Sabia
,
San Diego State University
Mathew Harris
,
University of Tennessee
JEL Classifications
  • I1 - Health