Part D pill popping: Did Medicare expansion cause a painkiller epidemic?

Opioids are painkillers like Vicodin and Oxycontin and opioid abuse has increased hugely since 1999. In this case, abuse is measured by substance abuse treatment admissions and deaths involving such painkillers.

As shown in the figure at the top of this post, these drug-related deaths spiked by 20 percent between 2005 and 2006. That happens to be the time that Medicare Part D added a prescription drug benefit making such painkillers much cheaper for seniors.

Recent research published by the National Bureau of Economic Research examines whether the introduction of the Medicare Prescription Drug Benefit Program in 2006 may have contributed to the increase in prescription drug abuse by expanding access to prescription drug benefits among the elderly.

Using data from the Drug Enforcement Agency, and shown in the figure below, they find painkiller distribution increased faster in states with a larger fraction of its population impacted by Part D.


They also find that this relative increase in opioid distribution resulted in increases in painkiller-related substance abuse treatment admissions.

Interestingly, these states experienced significant growth in opioid abuse among both the 65+ population and the under 65 population, even though those under 65 were not directly impacted by the implementation of Medicare Part D.

The authors do not provide an explanation for this observation.

But, maybe, just maybe, the older folks are engaging in a bit of prescription pill arbitrage: Getting painkillers at a low price subsidized by Uncle Sam, then selling them at a higher price to the youngsters.

In fact, last year, the Office of the Inspector General at the Department of Health and Human Services noted “questionable” usage of HIV drugs—including painkillers and concluded:

While some of this utilization may be legitimate, all of these patterns warrant further scrutiny. These patterns may indicate that a beneficiary is receiving inappropriate drugs and diverting them for sale on the black market.

A spokesman from the Centers for Medicare and Medicaid Services has said that the agency “takes this problem seriously and is taking steps to protect Medicare beneficiaries and the Medicare Trust fund from the harm and damaging effects associated with prescription drug fraud and abuse.”