Working Paper: NBER ID: w12643
Authors: Richard G. Frank; Thomas G. McGuire; Sharonlise Normand
Abstract: Broad claims are frequently made that new medications will offset all or part of their costs by reducing other areas of Medicaid spending. In this paper we examine the net impact on spending for new drugs used to treat schizophrenia. We extend research in this area by taking a new approach to identification of spending impacts of new drugs. We specify and estimate models of spending on treatment of schizophrenia using 7 years of Florida Medicaid data. The estimates indicate that use of the new drugs result in net spending increases. This may be due to increased adherence to treatment.
Keywords: No keywords provided
JEL Codes: I12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| atypical antipsychotic medications (B50) | mental health spending (I18) |
| introduction of new antipsychotic drugs (B50) | mental health spending (I18) |
| increased adherence to treatment (I12) | mental health spending (I18) |