Ed and Bob to the Rescue! Hot Pharmaceuticals

Ed Brantley, General Manager WNOX

I was having a bit of trouble with the section of Super Duper Socialism relating to the drug trade.  Since "street" drugs have not seen any price pressure from the massive prohibition efforts, at least none that I could find, I decided to call some veteran entertainers and find out their thoughts.  Ed and Bob were quite helpful and brought up the now lucrative pharmaceutical black market.

So, why are these "factory drugs" so expensive now?  My first observation goes to an artificial scarcity as an intended result of regulation.  Does anybody doubt that these products would no longer command a premium from buyers if they were over-the-counter purchases?

We have seen a reverse effect in formerly over-the-counter medications, like the Pseudoephedrine (Sudafed®, and other products) restrictions used to "combat" methamphetamine production.  It is likely those restrictions result in higher prices for legal users, like me, since a pharmacist must be involved in the sale, rather than just the cashier.  Also, the government added a a database or two, administered by the bureaucracy and paid for by you and me.  So, before the product is out of the store, one is paying a government-inflated price for the product.

Bob Thomas, Professional Actor and WNOX entertainer

What increases the "street" price of prescription, or pseudo-prescription drugs like Pseudoephedrine, is the added layer of sales involved.  If I were so inclined to purchase Pseudoephedrine and resell it, I would probably not sell it to the lowest bidder.  I could, of course, or I could even give it away for whatever charitable reason I could muster.  That is no guarantee that the next person who possesses that Pseudoephedrine will not seek a profit and find a buyer willing to pay a premium.

To get to the heart of why this works at all, one must wade into the mire of human behavior.  In the case of street drugs vs. pharmaceuticals, we have two separate law enforcement systems and two separate distribution systems.  Okay, there are some exceptions, like pharmaceutical cocaine, but we are talking the generalities here.

In the case of street drugs, we have an array of prohibition laws with billions of dollars in enforcement behind them with no measurable positive result.  As previously posted, the price of heroin is lower than a pack of cigarettes, yet we do not have a massive "addict problem" with heroin.  What we do have is thousands of people in jail over heroin, with no increase in price and no known increase in usage.

In the case of Oxycontin® and other drugs, we have controlled production and distribution, with very little direct law enforcement involvement.  I say not direct, since everybody involved in the production and distribution of those drugs has been deputized in one manner or another, including the drug store customer.

The deputies include: the businesses (factories) making the drugs, the people transporting the drugs, the people stocking the drugs in warehouses, as well as the people handling and dispensing the drugs at your local Apothecary establishment.  In the USA, all of these businesses must be licensed.  Indeed the individuals selling the drugs to prescription holders must be licensed too.  They face great risk, great penalties, for failing to follow the control guidelines set by the government.

Even the consumer is restricted by heavy penalties if he does not use his drugs (property) as intended.  For example, if I had a prescription for Oxycontin® and did not use all of it, am I free to sell the unused portion?  No, I cannot even return it to the chemist for a partial refund either, at least I am unaware of any who would engage in that folly.  If I keep my unused Oxycontin® and a family member is prescribed the exact amount that I have remaining, am I "allowed" to give or sell it to them?  No, that would be committing a host of felonies that I would rather avoid, from dispensing without a license to who knows what else.

However, the thing that "prevents" me from committing dastardly deeds like giving away my property to someone who needs it more is not my sense of conscience, it is the government threat to my liberty, even though the likelihood is undeniably low.  For an example of conscience, I would not give or sell one of my guns to someone I even slightly suspect would not own them in a responsible manner.

Other people do not follow my attitude about risks to liberty, as is their right as people, so we have a situation where as soon as certain people obtain pharmaceuticals they are looking to resell them.  The array of "protective" measures, from the doctor protecting her license whilst writing the script, to the pharmacist protecting his whilst filling the order, creates an expensive production and distribution chain while, at the same time, creates an artificial scarcity resulting in a price jump between the chemist's window and the parking lot of the store.

What to make of this?  For one thing, if the government wants to impose a prohibition a great deal of effort, to the point of deputizing all of the actors involved, is required to have any price inflation effect on the product.

Does this mass deputization prevent anybody from obtaining contraband if they want it?  It still does not appear to be the case.  Yes, the price is higher for those who wish to intoxicate themselves with these particular chemicals, but they are hardly scarce enough to say that anybody is prevented from obtaining them.

It also appears that the regular patient who is prescribed pain killers, or what-have you, is not the major source of re-resale pills.  The re-resellers themselves go to great lengths to forge prescriptions, or even establish licensed businesses, nicknamed pill mills (link is to a Florida, USA definition), to engage in these profitable crimes.  Indeed, some "illegal" sellers have every credential required for legally dispensing controlled substances.  Indeed, this is nothing new.  Rep. Charles Rangel (D-NY) in 1989, led a raid on pharmacies in the Harlem borough of New York city.  Well, it was more like a caravan of news cameras feeding the Representative's need for publicity, but raids on pharmacies it was just the same.

Is collusion a factor?  Of course it is.  Profession after profession has joined with government for licensing with the intent of limiting the number of people who practice that profession.  Doctors and pharmacists are no different and this is a Nationalized Socialism of sorts.

So, what we have here is more government of good intentions that produces none of the good intended results that they promise.