Competitive Effects of Federal and State Opioid Restrictions: Evidence from the Controlled Substance Laws

72 Pages Posted: 4 Aug 2020 Last revised: 13 Mar 2022

See all articles by Sumedha Gupta

Sumedha Gupta

Department of Economics, IUPUI

Thuy Dieu Nguyen

Indiana University Bloomington

Patricia R. Freeman

University of Kentucky

Kosali Ilayperuma Simon

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA); National Bureau of Economic Research (NBER)

Date Written: July 2020

Abstract

A large concern in U.S. opioid policy is whether supply side controls are effective at reducing the quantity of opioids prescribed, without harmful substitution. An unstudied way that policy targeted a major opioid through the federal Controlled Substance Act (CSA) was the August 2014 scheduling of tramadol products, the second most popular opioid medication at the time. Twelve states implemented the identical policy prior to federal action, providing a unique opportunity to compare effectiveness of the same opioid policy at state versus federal levels. This is important because many recent opioid policy interventions have only taken the form of state actions, while federal policy has largely been advisory. Seven weeks after tramadol's scheduling, the leading opioid form on the market, hydrocodone combination products, was move to the more restricted level II (no refills allowed) from level III in the CSA, allowing us to test a new question in the opioid literature: competitive spillover effects from regulations targeting one drug. Using weekly prescription data spanning 2007-2017, this study finds that tightening prescribing restrictions on one opioid leads to decreases in its use, but also causes some increases in prescriptions of close competitors, leading to no statistically detectable short-run reduction in total opioid prescriptions.

Suggested Citation

Gupta, Sumedha and Nguyen, Thuy Dieu and Freeman, Patricia R. and Simon, Kosali Ilayperuma, Competitive Effects of Federal and State Opioid Restrictions: Evidence from the Controlled Substance Laws (July 2020). NBER Working Paper No. w27520, Available at SSRN: https://ssrn.com/abstract=3665867

Sumedha Gupta (Contact Author)

Department of Economics, IUPUI ( email )

425 University Boulevard
Indianapolis, IN 46202-5140
Germany

Thuy Dieu Nguyen

Indiana University Bloomington ( email )

Patricia R. Freeman

University of Kentucky ( email )

Lexington, KY 40506
United States

Kosali Ilayperuma Simon

Indiana University Bloomington - School of Public & Environmental Affairs (SPEA) ( email )

1315 East Tenth Street
Bloomington, IN 47405
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Do you want regular updates from SSRN on Twitter?

Paper statistics

Downloads
9
Abstract Views
86
PlumX Metrics