Federal Legalization of Medical Marijuana Could Save Government $3.8 Billion

In a new STUDY published by Health Affairs (April, 2017), the authors Ashley Bradford and W. David Bradford propose that the nation could save between $1 billion – $3.8 billion annually – 

Federal Legalization of Medical Marijuana Could Save Government $3.8 Billion
ijuana Saves Billions v2

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by Erik Muenker D.C. |  Exclusive CBDbusinessBlog.com

In a new STUDY published by Health Affairs (April, 2017), the authors Ashley Bradford and W. David Bradford propose that the nation could save between $1 billion – $3.8 billion annually – if medical marijuana was federally legal and available in every state.

How is this possible?

Through the magic of prescription drug savings achieved by both Medicare and Medicaid. The study suggests that when medical marijuana is available in a state, Medicare and Medicaid beneficiaries fill fewer prescriptions1-2. The authors discovered, after sifting through considerable data, the medical marijuana availability in a state correlated to a 2% drop in total Medicaid spending on prescriptions.

Two percent might not seem like much, but according to the Medicaid State Drug Utilization Data – in 2014 alone, Medicaid prescription spending totaled nearly $24 billion. A 2% drop in drug spending would be a windfall of cash savings for both the state and federal government, not to mention the private insurers that stand to gain.

State + Federal Savings – Due to availability of medical marijuana
Why would medical marijuana be responsible for fewer filled prescriptions?

Although the Drug Enforcement Administration recently reaffirmed its stance that marijuana is a CSA Schedule I drug (CSA wiki), overwhelming evidence to the contrary continues to mount. Of the three main qualifiers for Schedule I status: “no currently accepted medical uses,” “has a high rate of abuse,” and ” a lack of accepted safety for use … under medical supervision.” – marijuana satisfies none of them.

The evidence that marijuana does not belong in Schedule I is striking and clear.

  • Marijuana is safe,
  • not subject to a high rate of abuse,
  • and has a plethora of valid medical uses.

Marijuana is safe and effective to use and is actually correlated with reduced traffic fatalities, adolescent drug abuse and drug overdoses.1-5 

We find that the legalization of medical marijuana is associated with decreased alcohol consumption, especially by 20- through 29-year-olds. In addition, we find that legalization is associated with decreased beer sales, the most popular alcoholic beverage among young adults (Jones 2008).” – Anderson & Rees3

The Bradford study examined medical conditions where medical marijuana could supplant the use of prescription drugs. Conditions included nausea, pain, insomnia, seizures, anxiety, psychosis and depression.1,5

“We hypothesized that medical marijuana laws would be associated with a decrease in prescribing of FDA-approved drugs because medical marijuana would substitute for those drugs.”
– Ashley C. Bradford and W. David Bradford | Citation 1

The finding were staggering.

The Bradford’s observed a range of reductions, from a 42% drop in prescriptions used to treat nausea (averages depicted below) to a 15% reduction for drugs related to muscle spasticity.

Average reductions in prescriptions commonly ranged 10% – 20% for psychosis, depression, pain, seizures and anxiety, although some states saw even more dramatic reductions.

Drop in Medicaid Rx Costs – Less Prescriptions Filled
Percent Drop Rx Drug Costs linked to availability of Medical Marijuana


1 Ashley C. Bradford and W. David Bradford – Medical Marijuana Laws May
Be Associated With A Decline In The Number Of Prescriptions For Medicaid Enrollees.
Health Affairs published [online April 19, 2017] | Full: http://bit.ly/2oEVVCy

2 Bradford AC, Bradford WD. Medical marijuana laws reduce prescription medication use in Medicare Part D. Health Affairs (Millwood). 2016; 35(7):1230–6. http://bit.ly/2oA96EM | Full: http://bit.ly/2ozW7D0

3 Anderson DM, Rees DI. Medical marijuana laws, traffic fatalities, and alcoholic consumption. J Law Econ. 2013;56(2):333-69 | http://bit.ly/2oF9NwH

4 Klofas J, Letteney K. The social and legal effects of medical marijuana: state legislation and rules. Rochester (NY), published online. Center for Public Safety Initiatives, Rochester Institute of Technology; 2012 Mar | http://bit.ly/2oF9Icf

4 Powell D, Pacula RL, Jacobson M. Do medical marijuana laws reduce addictions and deaths related to pain killers? [Published online]. Cambridge (MA): National Bureau of Economic Research; 2015 Jul | http://bit.ly/2oF1W28

5 Hill KP. Medical marijuana for treatment of chronic pain and other medical and psychiatric problems: a clinical review. JAMA. 2015; 313(24):2474–83 Abstract: http://bit.ly/2ooUpIA

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