An E.R. Doc Learns the Economics of Street Drugs

An E.R. doctor in the Pacific Northwest who writes a blog called “Movin’ Meat” might seem an unlikely candidate to know the economics of street drugs. But since he treats overdoses, he’s learned quite a bit. Recently, he noticed a spike in novice heroin injectors right around the time that the supply of OxyContin got very tight. His patients told him that since the price of OxyContin had tripled (if you could find it at all), they made the switch to heroin. A self-professed econ fan, the doctor spins a bit of analysis as well:

If I were a clever, real economist, I might neatly package the conclusion along the lines of the demand for opiates being relatively inelastic, but the brand (?) sensitivity is low, and once the incidental costs of heroin (inconvenience, lower quality, abscesses, disease, visibility) became lower than the absolute cost of oxycontin, the market suddenly tilted. (That’s probably mostly gibberish, but it sounds economish.) As it is, I just shake my head at the sadness of it all and the seeming futility of interdiction as a strategy for dealing with drug abuse. Cut off one drug, and people switch to another, more harmful one. A funny sort of progress.

(HT: Aaron de Oliveira)

Eric M. Jones

Recently there has been a scourge of counterfeit Oxycontin.

Q: Guess what the counterfeits are made of?

A: China White heroin!


Amateur economist or not, he nailed that pretty darned well!

Law of Unintended Consequences going full blast there.

Something I would like to know is whether or not there were any changes in total drug use. (a VERY difficult thing to track) There could be 10,000 people dropping Oxycontin and 1000 taking up Heroin.

Conceivably that might be a good thing, even though the highly visible cases of heroin use rises.

Is that actually the case? I sort of doubt it. If I had to guess, I's say our 10,000 Oxycontin users would fragment out to a dozen different drugs available and the overall drug use would stay mostly the same with some small drop in total numbers. Just my SWAG.

Catherine O'Sullivan

Well said, doc.


We ought to lobby state governments to pass laws requiring money from drug seizures to go entirely to treatment centers (or 90% treatment, 10% additional enforcement).

It's like speeding. If they completely enforced it with speeding cameras (they always complain about those being expensive!) the computers wouldn't discriminate, everyone would get tickets until nobody did any speeding. If they only enforce it occasionally, it's a good way to fill the budget. If they don't get any money from writing tickets, they are out their to minimize harm and not fill the gap in the budget.


Actually, for the very reasons your doc describes, I don't find it all odd that an ER doc knows the economics of street drugs.

Anyone who works with populations who abuse drugs is going to develop some understanding. It only seems odd to people who live their own lives distant from such populations.

But, kudos for reprinting this blog bit.

And, I'm curious; it sounds economish to me, too - how close is it to economists real language?

Ian Kemmish

Surely if there is one group of humans who can be relied on not to make the rational decisions that the less trendy flavours of economics demands of them - it's going to be drug addicts? What do behavioural economists have to say about this doctor's theory?

By the way - in response to comment no. 4 about speed cameras. We had them here in the UK. They didn't discriminate. So lawyers, op-ed columnists and MPs got speeding tickets as well (probably more than most). An informal pressure group sprung up, and after the change of government, councils have quietly been encouraged to turn the cameras off....

Simple Man

As someone who was treated with oxycodone and percocet during some severe surgical complications a couple of years ago, I must tell you that I honestly began to wonder why ANYONE would want to ban euphoria.

What in the world is wrong with people having a calm sense of well-being?

Oh, they'll abuse it? You mean like with alcohol, which is perfectly legal?

Very simply, there will ALWAYS be abusers. That is not a good enough reason to keep these feel-good drugs out of the hands of folks who, the Lord knows, probably could use a little boost in attitude during these times.

Certainly, just as with alcohol, no one should operate a vehicle under the influence of drugs (though I can tell you from my own experience--I've never had an alcoholic drink, by the way--that I was certainly in my right mind...except that I was much more loving and grateful for things).

So why is euphoria-causing drugs illegal? FOLLOW THE MONEY!

The drug dealers want it illegal so that prices remain at a premium and they always have a market.

The police, though certainly along with noble intentions, know that if narcotics are no longer the big crime that they are now, their jobs are threatened.

Big Pharma perhaps thinks that the premium they receive for these lovely pills goes down if they become too common, too easily attainable.

But when you come right down to it, excluding the abusers that will abuse whether drugs are legal or not, you have to ask why is euphoria illegal?

It eliminates a whole segment of crime. It empties jails (uh-oh, more job losses) of non-violent offenders who got caught with some weed, etc. (I've never smoked pot either).

Criminals that have built their empires on such drugs are suddenly cut off from that cash cow.

I know that when I had to take those pills (first to stop the sheer agony I was in; later just to again enjoy the pleasure of euphoria, overwhelming gratitude, and love), I could easily have done my office job.

We KNOW from recent studies that heroin users, when regularly GIVEN heroin--which eliminated the constant need to plan, think, and dwell on getting their next fix--began to emerge from their addictive haze. Yes, they were still addicts at that point, but now they could take time to reflect on their life, see where they are headed, make better decisions, etc., because THE problem in their life--i.e., the need for the next fix--had been eliminated from the equation.

We have crack whores and meth heads and so forth because people are reduced to these things to get the next fix. Eliminate that and maybe, just maybe, we will see something unique happen. We know that what we're doing now isn't working. Maybe we need to up-end the thing and see if something else works better.


William McClain

In response to Joshua, #4, I would have to disagree about speed cameras as an example of how to solve persistent issues like this. Most countries and states that have speed cameras have also learned where those cameras are located and how to spot them while driving. So while maybe they won't speed for the few seconds they drive past a camera, there's no reason not to speed the rest of the time. In some built up areas, this sort of driving can become even more dangerous than regular speeding as it increases the change of sudden unexpected braking.

Overall, I think that's a reasonable analysis of the situation, as presented. But if you carry that tipping scale further back in time, would you find that most of those Oxycontin users who switched to heroin had at at one point switched to Oxycontin from heron in the past?

How dynamic is this population? It might be that this sort of activity occurs in a pretty constant percentage of the population, but that individual drugs have large amounts of users who would not switch no matter what? Some drugs, especially those perceived "safer" in society, may have large amounts of users that wouldn't suddenly switch, while other drugs may have very few casual users. By looking at how these populations behave, a lot more information could be gathered about how to target drugs in society.

My hope would be that this would result a decriminalization of some with increased sanctions on others in an attempt to shrink the population of that constant percentage - those who will switch between drugs easily and openly. Permitting the use of drugs with relatively large casual user groups may help to lock in some individuals who would have, but will not now, switch to another drug. At the same time, efforts could be redirected at controlling the supply and use of drugs that exist more competitively on the street for habitual drug users.



If only you could cut them all off.

Robert Kerton

Economics has reliable laws. In 1972 Richard Nixon used "Operation Intercept" to reduce the supply of marijuana on the streets of New York. This drove up its price, of course - near to the price of heroin. ER doctors noticed a sharp increase in people needing treatment for heroin crashes. I wrote up the example for teachers of economics to use in classes. The principle of substitution is one of the most reliable laws in economics. Bob Kerton, University of Waterloo


Simple man nailed it!


We should remember what happened in the UK and Australia with reformulated prescription drugs of abuse. Major limb amputations and gangrene from people desperate to inject. And, a shift to oral dependence on the drug among injecting drug users.


There is a new site to track the price of the new OxyContin formulation, and other prescription drugs. Maybe we will see a change in other street drug prices??