Arteaga and Barone (2023)

The economics of Housing & Homelessness

Overview

Motivation

  • Over the past two decades more than 700,000 fatally overdosed from opioids
  • The downstream effects of well-being and intergeneration effects are unknown 
  • To date, there hasn't been a strong identification strategy that removes to potential selection bias between areas with large amounts of opioid prescriptions and those with smaller amounts

Results

Going from the 5th percentile to the 90th percentile in cancer mortality caused a

  • 55% increase in opioid deaths
  • 32 (35) % increase in SNAP (SSDI)
  • 5% increase in low birth weights

Background

  • Purdue Pharma introduced OxyContin in 1996
  • " MS Contin’s patent protection expired in 1996"

Alpert et al. (2022) use state level variation in regulation involving the supply of opioids

"They show that five states with early versions of prescription drug monitoring programs (PDMPs), or triplicate prescriptions, received less marketing from Purdue Pharma and reported lower levels of prescription opioids and fewer overdose deaths"

Identification

Prescription Opioids

Outcomes

Purdue Pharma's Marketing Strategy

Preferred Instrument

Treatment

Cancer Mortality Rate

Instrument

\approx

Identification Strategy

Prescription Opioids

Outcomes

Purdue Pharma's Marketing Strategy

Preferred Instrument

Treatment

Cancer Mortality Rate

Instrument

\approx

Identification Strategy

\Delta D_i
\Delta Y_i

Not locally randomly assigned

High Cancer Mortality Area

Low Cancer Mortality Area

(1) Oxycontin initially promoted to the Cancer Pain Market

(2) Purdue Pharma later targeted top prescribers which meant that initial targets received more marketing

\Delta \tilde{Y}_i \perp Z_i \vert X_i

IV in Residualized Form

\Delta y_i = \beta \big(\mathbb{E}[\Delta D_i \vert X_i, Z_i] - \mathbb{E}[\Delta D_i \vert X_i] \big) + \eta_i
\Delta \tilde{D}_i \perp Z_i \vert X_i
\Delta \tilde{D}_i(0.5)
\Delta \tilde{D}_i(0.8)

Prescription Opioids

Pharmacies licensed for Class 2 Opioids

Purdue Pharma's Marketing Strategy

Alternative Identification Strategies

Robustness

We do not find any evidence of a relationship between mid-nineties cancer mortality and growth in our outcome variables before the launch of OxyContin

Comments/Thoughts

These are intended to be helpful to students reading the paper

Why are the results stated in reference to cancer mortality rate? 

"A move from the 5th to the 95th percentile of mid-cancer mortality corresponds to a 32% increase in the share of SNAP recipients and a 35% increase in the share of the population receiving SSDI."

Comment

Put another way, why do we care about the effect of the instrument on an outcome in this context?

Why is there variation of cancer mortality?

"Those records show OxyContin was initially promoted to the cancer pain market"

Comment

"Our identification strategy requires that in the absence of OxyContin’s marketing, outcomes in areas with higher cancer mortality would have exhibited the same trends as in areas with lower cancer mortality (Goldsmith-Pinkham et al., 2020). To test this identifying assumption, we use an event-study approach and investigate the possible presence of differential pre-trends."

Pre-trends aren't going to be very informative in this context for the first stage

Comment

  • During the pre-period, OxyContin didn't exist...