The Impact of Information in Health Care Markets: Prescription Drug Monitoring Programs and Abuse of Opioid Pain Relievers

Sharmini Radakrishnan, Cornell University

Overdose deaths, substance abuse treatment admissions, and emergency department visits involving opioid pain relievers have increased sharply in the last decade. In response, many states have implemented prescription drug monitoring programs (PDMPs), electronic databases that track the prescribing and dispensing of controlled substances. This paper investigates the impact of PDMPs on the abuse of opioid pain relievers, measured by non-medical use of prescription pain relievers, substance abuse treatment admissions for opioid abuse and opioid overdose deaths. I estimate difference-in-differences models in which I use variation in the timing of PDMP implementation across states as a source of exogenous variation in exposure to the program to identify impacts of PDMPs. I address possible policy endogeneity by controlling for pre-implementation trends as well as seven other types of state laws that are likely to affect prescription drug abuse and diversion. The preferred estimates suggest that PDMPs reduced treatment admissions by 13.1%.