Opiate addiction in a market economy

In the US, there has been a huge increase in deaths from heroin overdoses. Why?

In the past two decades, opiate use in the US has soared, and so have deaths from overdoses. The amazing story explaining why is told by journalist Sam Quinones in his 2015 book Dreamland: the true tale of America’s opiate epidemic. Quinones spent years interviewing users, parents of users, drug dealers, researchers, police and others. Dreamland is fascinating reading, telling the stories of individuals and communities caught up in the opiate epidemic.

There are two parallel stories involved, involving legal and illegal drug use. The legal side concerns painkillers. US doctors have long used morphine as a painkiller, but only as last resort because of the risk of addiction. Then came the “pain revolution,” during which opiates became acceptable and often prescribed in ever-increasing amounts.

The change in attitude was driven by commercial considerations. The company Purdue Pharma developed a time-release opiate pill, gained government approval for its sale and embarked on a massive marketing campaign to win over doctors. A key part of the sales pitch was that because there was no euphoria from an immediate hit, the drug was hardly ever addictive. To back this claim, Purdue representatives referred to an obscure publication.

Quinones found that doctors went along with these claims, with no one bothering to look at the publication. Its authors had forgotten about it and didn’t know it was being used to justify massive opiate prescribing. (Like Quinones, I’m not distinguishing between opiates and opioids.) As it turned out, the claims about there being little addictive capacity were wrong.

The marketing pitch was that if someone has pain, prescribe Vicodin or OxyContin, and if the pain continues, up the dose. Before long, huge swathes of the population were seeking prescriptions. Some unscrupulous doctors set up pill dispensaries, writing scripts for anyone who asked. Users would get their prescriptions filled at a low price subsidised by the government and sell portions to others to maintain their habit. At these dispensaries, lengthy queues would form of people waiting for their drugs.

The areas of the country most affected were those where the economy was in decline, so many residents faced bleak times. Quinones tells about small and mid-sized towns in Ohio and neighbouring states, subject to deindustrialisation and despondency about civic pride and public life. Addiction took hold, but it took a while before authorities realised the scale of the problem. One reason was that the parents of those most affected were ashamed to admit their son or daughter was an addict. They were white middle class.

The Mexican connection

In the small Mexican state of Nayarit, poppy seeds grow abundantly. Boiled down, they form a sticky substance called black tar. It is heroin. Some entrepreneurs from Nayarit came to the US and began building a heroin franchise operation. It was like nothing before.

Previously, most heroin imported to the US came from Asia, especially Afghanistan, brought in through New York and distributed by gangs. This heroin was often cut, namely adulterated, as it moved down through the distribution chain. Many small-time dealers were themselves addicts; dealing is a way of making money to support a habit. The heroin business is highly profitable, leading to violence between operators and drawing the attention of the police. It is devastating to poor inner-city areas, especially black neighbourhoods.

The Nayarit entrepreneurs developed a different model. They brought in poor young men from Xalisco, a small city in Nayarit, who were willing to work at low pay in the US because the alternative was backbreaking work on sugar fields at even lower pay. These young men were paid a wage, so they had no incentive to adulterate the heroin they delivered. Furthermore, they were not users themselves. They lived in barren apartments and were given old cars to make deliveries. After a few months they were sent back to Mexico.

            The Nayarit entrepreneurs had several rules. They did not use violence and did not carry guns. They sold only to whites, as this was considered far safer. And they marketed only in areas where the previously established heroin operations were absent, such as Portsmouth, Ohio.

The Nayarit operators used a pizza-delivery model. They prepared black tar in carefully measured amounts tied up in balloons. They would hand out a mobile phone number to prospective users. When they received an order, a courier (one of the boys from Xalisco) would drive to the location with balloons of black tar in his mouth and spit out the appropriate number, for example two balloons for $40. It was high quality heroin provided promptly and reliably. For white addicts, this was enticing. There was no need to go to a seedy neighbourhood and negotiate with addict sellers.

            The operators would check in with their clients to ensure service was satisfactory, calling to ask whether the courier was on time and provided the goods. If a client didn’t call for a few days, the operators might ring and ask if there was a problem. They would lower prices to build their clientele, and sometimes give out free samples to win favour.

            If police pulled over a courier, he would swallow the balloons. Initially, police sent couriers back to Mexico. They were replaced within days. Later, some courts sent couriers to jail with long sentences. They were replaced too, with little interruption to business. Xalisco seemingly had a bottomless reservoir of poor young men willing to take chances to make money. Their reward was to impress their friends and families back home by taking them to expensive restaurants and building nice houses.

The Nayarit heroin operation happened to expand at just the time that opiate addiction was dramatically expanding due to sales of painkillers. For example, a high school football player might be injured and given OxyContin for the pain, developing an opiate habit. To maintain the habit, it was easy to switch to black tar, provided so conveniently.

The first major signal of this emerging opiate problem was deaths due to overdoses. A few individuals, in different parts of the US, started expressing concerns, but it was difficult to gain attention due to the pain revolution and the low profile of the black tar distribution operation. It was striking that the death were not blacks in big cities but whites in small towns. In many cases, parents did not know their children were addicted until they overdosed and died. The parents included politicians, doctors and judges. So why didn’t they speak out? The reason, according to Quinones, was shame. In white suburbs, heroin addiction was stigmatised as something happening somewhere else, to a different class of people. Many parents made up false stories about how their children had died. So it took a while before a few courageous parents started speaking out, raising the alarm.

Drugs and profit

In the US, there has been a so-called war on drugs since the 1930s, when federal authorities began a scare campaign about marijuana, whose use then was concentrated in immigrant communities. Illegal drugs were demonised. Meanwhile, legal recreational drugs, notably tobacco and alcohol, were massively advertised. Then came pharmaceutical drugs, also massively advertised.

            Drug issues are difficult to summarise briefly, especially because government pronouncements, media reports and advertising have cemented in certain attitudes. A simple contrast is between a policy of harm minimisation and one of regulated markets.

Markets are never “free,” but are shaped by government regulations, cultural expectations and social values. In the US, regulations enabled the profit motive to foster addiction and destroy communities.

The company selling legal opiates, Purdue Pharma, ended up making billions of dollars per year on the back of a massive marketing operation based on the claim that time-release opiate painkillers were hardly ever addictive. Profits drove the rapid expansion of use.

Making addictive drugs illegal is a different way to regulate a market. The trouble is that when the demand is inflexible, and alternatives are less enticing, this creates a strong incentive for organised crime. The result, often, is distribution via gangs, reliance on violence and corruption of the police and other authorities.

What is fascinating about the Xalisco distribution network is that it offers a different model for success in selling illegal goods: agents paid a salary rather than a commission, provision of high-quality service and goods, and avoidance of violence.

The US model for dealing with drugs has been disastrous for the people there and in the rest of the world. Tobacco is the world’s most damaging drug, and it was entrusted to large corporations with a huge incentive to expand sales. Alcohol is another damaging drug, again promoted heavily. Then there are pharmaceutical drugs, including morphine. Meanwhile, making some drugs illegal created different sorts of markets. The US war on drugs has contributed to corruption and the world’s highest imprisonment rate.

Quinones does not engage with arguments or efforts for law reform or a different way of managing drugs, instead simply telling the story of the different players in the US morphine/heroin saga. A compelling treatment of the US war on drugs is Johann Hari’s book Chasing the Scream.

In the US, there seems no end in sight for the toxic relationship with drugs. If ever there was a case for moving away from profit as a driving force, this is it.

There has been one good result. Overdose deaths in white middle-class areas have changed the attitudes of some politically conservative communities and politicians, creating more understanding and sympathy for opiate addicts. Perhaps there is some hope for change.

Sam Quinones

PS In recent months there has been some media coverage of opiate addiction problems in Australia.

Brian Martin