Are We Fighting the Right War? Estimating the Effect of Prescription Drug Supply-Side Interventions

Angelica C. Meinhofer, Brown University

This study uses novel data to estimate the effect of prescription drug supply reduction interventions on price, quantities, health and healthcare provider responses. Previous literature has mostly focused on illicit drug supply-side interventions, however, these results may not generalize to prescription drugs. Unlike illicit drugs, prescription drugs have accepted medical use in treatment, and are legally produced and provided. This paper exploits a quasi-experimental setting in which enforcement and legislative initiatives caused a substantial shock to supply in Florida, the epicenter of the prescription drug abuse epidemic. Preliminary results suggest that even though some users manage to access substitute drugs (e.g. Heroin), the interventions effectively reduced deaths, hospital discharges and drug sales, while increasing substance abuse treatment admissions, street prices and pharmacy openings. Results hold for all three post intervention years observed, which contrasts with results from similar studies on illegal drugs where interventions have, at most, a short-run effect.