Dynamic Sequencing of Drug Treatments for ADHD Patients with Medicaid Coverage

Anna Chorniy, Clemson University

Almost 10% of children aged 4-17 had been diagnosed with ADHD in the U.S. in 2007. While many believe that ADHD drugs are overprescribed, little is known about the existing prescribing practices, physician learning processes, and the relative efficacies of treatment strategies. The evidence suggests that children diagnosed with ADHD face significant uncertainty regarding efficacy and severity of adverse effects of ADHD medications. I extend Crawford&Shum (2005)'s model to explore the effect of treatment interruptions in addition to the effects of various drug therapies. Using SC Medicaid claims data for 2003-2012, I estimate a dynamic model of demand for ADHD drugs under uncertainty and evaluate the effect of interruptions in treatment on the overall treatment cost and disease duration, accounting for patient heterogeneity in response to treatment for ADHD. I will explore the potential to develop better guidelines that can improve the quality of drug-patient matches and patients outcomes.