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Study: The US Could Save $500 Million With Medical Marijuana

In the 20 years since California became the first state to legalize medical cannabis, the pressing question in the political debate has obviously been Is weed good for human health? But there is another practical consideration that might even be more likely to get legislators and the public to take notice: Could legal medical marijuana also be good for our economic health?

A new study from the University of Georgia has run the numbers, and its conclusion is a resounding yes.

Using Medicare figures from 2013, when 17 states plus the District of Columbia had provisions for medical marijuana, researchers found that patients switching from prescription pharmaceuticals to medical pot saved the program an estimated $165 million. If all 50 states legalized medical cannabis, the report projected a savings of $468 billion—about 0.5 percent of total prescription drug spending by Medicare Part D.

The news gets even better: Since Medicare Part D coverage is limited almost entirely to seniors, the demographic most resistant to marijuana in any context, the actual savings could be higher.

The goal of the study was to approach the medical marijuana debate from a novel angle. Says study co-author W. David Bradford, a professor of public policy at the UGA, “We realized this question was an important one that nobody had yet attacked.”

Nevertheless, the study provides indirect evidence of public opinion on medical marijuana laws. “The results suggest people are really using marijuana as medicine and not just using it for recreational purposes,” says lead author Ashley Bradford. In other words, they see dispensaries as providing a medical service and not as a backdoor to complete legalization.

To reach their conclusion, Bradford’s team sifted through 87 million data points, winnowing them down to concentrate on nine categories with at least one FDA-approved cannabinoid treatment: anxiety, depression, glaucoma, nausea, pain, psychosis, seizures, sleep disorders, and spasticity.

The same UGA team is planning to look next at Medicaid, which serves a more diverse population.


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