The Pandemic Depression
The Global Economy Will Never Be the Same
In 2016, nearly 50,000 people died of opioid overdoses in the United States, and, per capita, almost as many died in Canada. From 2000 to 2016, more Americans died of overdoses than died in World War I and World War II combined. Yet even these grim numbers understate the impact of opioid abuse, because for every person who dies, many more live with addiction. The White House Council of Economic Advisers has estimated that the epidemic cost the U.S. economy $504 billion in 2015, or 2.8 percent of GDP.
This public health story is now common knowledge. Less well known is the growing risk that the epidemic will spread across the globe. Facing a backlash in the United States and Canada, drug companies are turning their attention to Asia and Europe and repeating the tactics that created the crisis in the first place. At the same time, the rise of fentanyl, a highly potent synthetic opioid, has made the outbreak even deadlier and begun to reshape the global drug market, a development with significant foreign policy implications. As a result, the world is on the cusp of a global opioid epidemic, driven by the overuse of legal painkillers and worsened by the spread of fentanyl, that could mark a public health disaster of historic proportions.
Yet in the face of this terrifying possibility, the world has remained largely complacent. Governments and international organizations urgently need to learn the lessons of the North American crisis. The first and most important of those is that the more opioids flood the market, the bigger the problem will be—and so governments must couple efforts to treat addicted individuals with efforts to curb supply. That will require them to crack down on pharmaceutical companies that abuse their positions and to take aggressive steps to regulate the sale and marketing of opioids. And the rise of synthetic opioids means that governments must rethink the role that fighting drug trafficking plays in their foreign policies.
THE PRESCRIPTION AND THE DAMAGE DONE
Opioids derived from the opium poppy have long been used successfully to relieve short-term pain from surgery and to comfort patients with terminal conditions, including cancer. Problems can arise, however, when they are prescribed for prolonged periods to treat nonterminal chronic pain. Extended use raises the risk of addiction and increases tolerance, meaning that patients need more and more of the drug to achieve the same effect. Opioids are so dangerous because the difference between a lethal dose and a normal one is only a modest multiple. Worse still, a dose that works today can kill tomorrow, especially if the patient has taken other drugs, such as alcohol or benzodiazepines (a class of drugs that includes Valium and Xanax). And because an overdose kills by depriving the body of oxygen, even those who survive risk serious organ damage.
Opioids are widely misused for three reasons. First, clinicians can’t objectively measure pain in the way they can body temperature or blood pressure, so they rely on patients’ accuracy and honesty in judging pain severity. Second, opioids are highly prized, even by healthy people, because of the euphoria they create. And third, anyone without scruples can sell prescription opioids on the black market.
The largess of manufacturers flowed to virtually every organization that should have been protecting the public.
After several epidemics involving legal medications in the nineteenth century, in 1914, the U.S. government banned most distribution of opioids. For nearly 50 years after that, North America saw few opioid-related problems besides heroin use in a few U.S. and Canadian cities. In the late 1960s and 1970s, heroin spread to more cities, but then stalled. From the 1970s to the mid-1990s, the number of dependent users was fairly stable.
All of that changed in the mid-1990s. Several pharmaceutical companies began aggressively marketing opioids to treat chronic, not just acute, pain, claiming they carried little risk of addiction. The most infamous was Purdue Pharma, the maker of OxyContin, but other companies rolled out similar products. As the New York Times journalist Barry Meier and the psychiatrist Anna Lembke have documented, their tactics were nearly as ruthless as those of any drug dealer. During the period of mostly uncritical enthusiasm for prescription opioids, the largess of manufacturers flowed to virtually every organization that should have been protecting the public, including health-care regulators, professional medical societies, medical school education programs, elected officials, patient advocacy groups, medical opinion leaders, and state medical boards.
A study by the Center for Public Integrity and the Associated Press found that from 2006 to 2015, the pharmaceutical industry spent $880 million on campaign contributions and lobbying state legislatures, 220 times as much as the amount spent by groups trying to limit opioid use. In 2013, the marketing expenditure of each of the ten largest phar-maceutical companies exceeded the entire budget of the U.S. Food and Drug Administration.
The resulting lax regulatory environment, coupled with a sincere concern that many patients were living with unacceptable levels of pain, released a tsunami of opioid prescriptions. Consumption in the United States quadrupled from 1999 to 2014, peaking at 250 million prescriptions per year. By 2010, the U.S. health-care system was dispensing enough opioids each year for everyone in the country to be medicated round the clock for a month.
In 2007, federal prosecutors secured a guilty plea from Purdue Pharma for knowingly deceiving doctors and patients. The courts fined the company $600 million and required it to more accurately describe the risks and benefits of OxyContin. Still, that fine is dwarfed by the estimated $35 billion of revenue that Purdue has earned from the drug, and the three executives who pled guilty avoided jail sentences. By contrast, someone convicted of selling 100 grams of heroin—worth between $2,500 and $15,000—faces a federal mandatory minimum sentence of five years. Other fines paid by opioid manufacturers and distributors in the United States and Canada have mostly been under $25 million—small enough that companies could treat them as just a cost of doing business.
A recent scandal reveals the extent to which the industry has captured regulators. In 2016, Eric Eyre, a determined West Virginia journalist, discovered that drug companies had shipped nearly nine million opioid pills to a pharmacy in Kermit, West Virginia, a town with fewer than 400 residents. The Drug Enforcement Administration was already investigating why the companies that distributed these opioids did not report or stop the suspicious shipments. But the opioid distributors responded by hiring away DEA officials, many of them from the division responsible for regulating the industry, and by lobbying friendly politicians. In 2016, Congress passed legislation curtailing the DEA’s ability to pursue any such cases.
One of the leaders in that effort, Tom Marino, a Republican congressman from Pennsylvania and a recipient of extensive campaign donations from the industry, was even nominated by President Donald Trump to serve as the director of the Office of National Drug Control Policy. Marino withdrew when The Washington Post and 60 Minutes broke the story of his involvement with the bill, but his nomination showed that the administration was willing to put its drug policy in the hands of a creature of the industry. And despite Marino’s withdrawal, the pro-industry policy created by Congress remains firmly in place.
The liberalization of painkiller prescriptions has fueled a black market thanks to a straightforward economic calculus. The black market pays about $1 per milligram for oxycodone pills. A typical daily dose for a long-term opioid patient is 100 milligrams, or $36,500 worth of pills a year. Thus, a patient with a $30 copay for a 30-day prescription pays $1 a day for medicines that can then be sold for $100. Those skilled at working the system can obtain prescriptions for hundreds of milligrams a day, either from one doctor or by doctor shopping.
Although most patients are not criminals, many criminals pretend to be patients. Furthermore, even otherwise honest people can be tempted into crime when the payoff is that great. Just by lying about a medical condition that doctors cannot verify with any objective test, a patient can obtain prescriptions worth tens of thousands of dollars.
Even for those who truly need the drugs, the black market offers attractive opportunities. A single milligram of pure heroin usually sells for under $1, slightly less than the price that a milligram of oxycodone commands, even though heroin is roughly three times as potent. Selling prescription pills and buying heroin thus lets the user more than triple his or her opioid consumption or, alternatively, keep the same rate of consumption and buy groceries or pay the rent.
This creates a vicious cycle: addicted people obtain prescriptions, which they sell to others, who become addicted and seek their own prescriptions, which they then sell in turn, addicting still others. This process has driven a boom in demand. Heroin use, which had stayed stable for many years, surged as people who had become addicted to prescription opioids shifted to black-market alternatives.
Beginning around 2014, black-market fentanyl compounded matters. Fentanyl did not create the crisis: prescribed opioids were already killing tens of thousands of people. But it threw gasoline on the fire. Dealers began cutting heroin with cheap diluents and then adding fentanyl—which is less expensive and more potent than other opioids—to raise the strength of the mixture before selling it as heroin. Deaths in the United States from synthetic opioids other than methadone (the category that includes fentanyl) jumped from 3,105 in 2013 to 20,145 in 2016.
A WORLD OF PAIN
So far, this dynamic has been most pronounced in the United States and Canada. The United States has an unusually corporate-friendly policy environment, but Canada has a stronger tradition of state regulation. So other countries would be foolish to assume that something similar could not happen to them.
U.S. pharmaceutical companies are already working to expand foreign sales. The Sackler family, which owns Purdue Pharma, also owns Mundipharma, a worldwide network of pharmaceutical companies that is not constrained by the U.S. federal court decision against Purdue. As detailed by the Los Angeles Times, Mundipharma is active in Australia, Brazil, China, Colombia, Egypt, Mexico, the Philippines, Singapore, South Korea, and Spain and is using the same aggressive sales tactics that Purdue Pharma employed in the United States. It runs training seminars in which representatives encourage doctors to overcome their “opiophobia.” It sponsors ad campaigns that promote pharmaceutical treatment for pain. It has hired consultants, local opinion leaders, and an army of sales representatives to promote its products.
The Los Angeles Times reported that Mundipharma consultants have claimed that OxyContin presents only a small risk of addiction, the assertion for which Purdue Pharma was fined in the United States. As David Kessler, a former U.S. Food and Drug Administration commissioner, told the Los Angeles Times, Mundipharma’s strategy is “right out of the playbook of Big Tobacco. As the United States takes steps to limit sales here, the company goes abroad.”
In May 2017, a bipartisan group of 12 members of the U.S. Congress wrote to the director general of the World Health Organization (WHO) to warn against the predations of Mundipharma. But it is not clear that the world heard the message. Already, several countries appear to be falling into the trap of opioid use. In Germany, prescription rates have risen to nearly the Canadian level. In Australia, OxyContin prescriptions have increased sharply, and Mundipharma has contributed funding to the development of national pain-management strategies. In much of the developing world, where states are weaker and drug manufacturers have a freer hand, the outlook is even worse.
A NEW PRESCRIPTION
To prevent the North American crisis from growing into a global one, several steps must be taken now, before it is too late. First, jurisdictions that decide to liberalize their prescription opioid policies must plan to spend more on drug treatment and other services for those struggling with opioid addiction, rather than playing catch-up after the problem has grown. But just treating addicted people will not solve the problem. Governments must also address the incentives pharmaceutical companies have for profiting from oversupplying and overpromoting opioids.
A simple, although radical, policy would be to ban for-profit companies from selling prescription opioids for extended home use, allowing only the government or nonprofit organizations to do so. A less extreme idea would involve a ban on branding. Regulators could require pharmacies to sell only generic products or, at the least, prevent manufacturers and retailers from advertising their drugs. Although such bans are largely unconstitutional in the United States, many countries do have the power to restrict advertising. (The restrictions on promotion that have worked in the United States have come primarily from legal settlements such as those imposed on the tobacco industry, not legislation.)
A more complex alternative would be to develop a distinct and more stringent set of regulations for opioids that would recognize the unique challenges they pose. Whereas for most drugs it makes sense for regulators to consider only whether the drugs are safe and effective for patients when used as directed, that standard is woefully inadequate for drugs that are as easily and widely abused as opioids. Regulators should take all foreseeable consequences into account, not just those likely to follow from the proper use of prescribed opioids.
Tighter regulation could also include new ways of calculating fines for drug companies that break the law. There is little evidence that one-off penalties change corporate behavior. But agreements that made fines contingent on outcomes might. If opioid manufacturers faced, say, a $1 million fine for every overdose involving one of their products, they would have an enduring incentive to regulate themselves.
The WHO and the United Nations could help in two ways. Many low- and middle-income countries face the opposite problem of rich ones: they do not use enough opioids, a shortfall that leads to unneeded suffering, particularly for the terminally ill. Rather than let profit-seeking corporations exploit that opportunity and push the needle too far in the other direction, the WHO or another UN agency should provide generic morphine to patients in those countries as a humanitarian priority. The WHO and the UN should also warn their members against pharmaceutical companies with expansionist visions and questionable ethics. Just as pharmaceutical companies send their sales representatives to promote their drugs, the WHO and other public interest groups could send representatives to explain how and why the current opioid epidemic started and escalated.
TURNING OFF THE TAP
Drug policy experts often dismiss attempts to cut down on supply, arguing that governments cannot arrest their way out of drug problems. That is largely correct when it comes to street dealers. Locking up people who are easily replaced does little to stem the flow or use of most drugs. Furthermore, prisoners who depend on opioids lose their tolerance while in prison, and some then die of overdoses when they are released.
Legal drugs can bring death on a scale vastly surpassing the effects of illegal ones.
Luckily, there is a wide space between the two extremes of waging war on drug dealers and users and turning over the keys of public health and safety to rapacious companies that profit by pushing addictive drugs. Authorities can stop a doctor who prescribes illegally or irresponsibly just by revoking his or her license, no expensive prison cell needed. The tactic works because the black market cannot replace those doctors. This practice is already used, but such investigations should be given greater resources. Targeting corporations is even cheaper, since the resulting fines are often larger than the costs of investigation and prosecution. To make these investigations easier, Congress should repeal the law it passed in 2016 that restricted the DEA’s power. Other countries should make sure that their law enforcement agencies are empowered to investigate and prosecute gross corporate malfeasance.
A key lesson of the current epidemic repeats one from the history of tobacco: legal drugs pushed by corporations can bring death on a scale vastly surpassing the effects of illegal ones. Calls to legalize recreational opioids that fail to grapple with this reality do not deserve to be taken seriously.
Governments will also need to recognize a central lesson of public health research: epidemics cannot be ended simply by managing individual cases of the disease. Take Vancouver, British Columbia, which has thoroughly embraced the idea that providing health and social services can solve drug problems. Residents have access to universal health care, drug treatment programs, syringe exchanges, supervised rooms in which they can use drugs, the overdose rescue drug naloxone, and opioid substitution treatments, including government-provided heroin. The city and the province have positioned themselves as world leaders in this harm-reduction approach. Yet the overdose death rate in the Vancouver health service delivery area rose by 36 percent in 2016, reaching 53.8 deaths per 100,000 residents last year. That is similar to the rate in West Virginia, which has few services and is the U.S. state that has been the hardest hit, where 52 people died of overdoses for every 100,000 residents in 2016. Services for people addicted to opioids are essential. But the lesson of Vancouver is that expanding health and social services without addressing opioid supply is akin to emptying an overflowing bathtub with a thimble without turning down the tap.
FUEL ON THE FIRE
The rise of fentanyl is both making the North American crisis worse and complicating efforts to forestall the emerging global one. For drug traffickers and dealers, fentanyl offers many advantages and could reshape the global opioid market in ways that would have important consequences for foreign policy and international relations, not just public health. Traditional illicit drugs, such as heroin and cocaine, flow through long distribution chains that include as many as ten transactions between the farmer and the user. Parts of those chains, especially the links crossing international borders, often favor large criminal organizations that can intimidate or co-opt authorities. Fentanyl, by contrast, can be produced secretly anywhere there is a chemical industry, not just where poppies grow.
Fentanyl is also far less labor-intensive to make than heroin, so its sponsors gain significantly less political capital by providing jobs than do the sponsors of illegal poppy cultivation. Disrupting fentanyl production is therefore less politically costly and has fewer negative side effects for counterinsurgency and counterterrorism efforts than eradicating drug crops. And fentanyl is so concentrated that it can be mailed a kilogram at a time. That radically reduces transportation costs and the role and power of organizations whose comparative advantage lies in smuggling large shipments across international borders.
These factors will drive down prices, raising consumption. But the consumption of opioids tends to rise in smaller proportion to the fall in prices. (A ten percent decrease in the price, for example, leads to an increase in use of less than ten percent.) Hence, fentanyl will tend to depress producers’ revenues and power. In countries that allow drug companies to market opioids aggressively, however, that effect will likely be more than offset by an intensifying demand for black-market opioids.
Fentanyl also has the potential to alter the balance of power among drug-trafficking organizations. Mexico’s Sinaloa cartel, for example, which has long dominated the distribution of heroin and cocaine in the United States, could well lose market share to its rival Jalisco New Generation, which embraced fentanyl early, back in 2014. That is not necessarily good news, because the Sinaloa cartel has traditionally been less violent than Jalisco New Generation. If that group challenges Sinaloa’s dominance north of the Mexican border, drug-related violence within the United States could well increase, both among dealers and against law enforcement and public officials.
Sinaloa has begun to adapt by moving aggressively into the distribution of fentanyl, at least on the eastern coast of the United States. It is a major supplier of the drug to New York City, for example, where drug overdose deaths last year were four times as many as homicide deaths. That’s a worrying trend, but at least Sinaloa continues to shun violence in the United States. For example, it sometimes employs nonviolent, middle-aged couples without prior criminal records to distribute fentanyl, sending them on one-time drug runs by train or car. That makes stopping them harder, but it keeps violence down.
Fentanyl’s rise could also split the global drug market. In affluent places where heroin is expensive, including Canada, the United States, and Europe, users might switch to cheaper synthetics. That would leave countries that grow poppies, such as Afghanistan and Myanmar, primarily supplying neighboring countries with high addiction rates, such as China, Iran, Pakistan, and Russia. Synthetics are less likely to make inroads in those countries because they are close to heroin production areas and have lax law enforcement and porous borders, so heroin is far cheaper.
All of this could reshape international relationships. If U.S. consumption shifts from plant-based to synthetic drugs, Washington’s interest in eradicating drug crops could wane, removing a decades-old source of tension between the United States and Latin American countries. From 2001 to 2009, U.S. programs to eradicate poppy fields in Afghanistan, where a large proportion of the economy depends on drugs, drove farmers to embrace militant and terrorist groups. Abandoning that approach, a major policy breakthrough of the Obama administration, has helped with counterinsurgency and nation building. The Trump administration should not resurrect it. If synthetic opioids replaced cocaine consumption or a synthetic cocaine analogue were developed, the coca-producing countries of Bolivia, Colombia, and Peru could see similar effects.
It will be much harder to persuade larger and more powerful synthetic-drug-producing countries, such as China and India, to crack down on manufacturers. And because U.S. and Canadian relations with China and India cover far more issues than those with South American countries, drug control efforts would have to compete against other interests.
A bifurcation in international drug markets would exacerbate splits over global drug policy, heightening differences between the interests of hawkish countries in Asia and the Middle East and those of more liberal ones in Europe and Latin America. International drug control would likely climb up the agendas of countries whose populations still relied on plant-based drugs, especially China and Russia. Russia, which is suffering from an opioid epidemic revolving around Afghan heroin, might well continue pressuring the United States to eradicate poppy fields in Afghanistan and even take it upon itself to do so. Moscow would likely view controlling drug supplies as more important than limiting the political capital the Taliban can gain from fighting to protect poppy fields. Already, Russia is courting the Taliban, perceiving the group as a lesser danger in Afghanistan than the Islamic State (also known as ISIS). Washington would be wise to engage Beijing and Moscow to educate them on the mistakes the United States has made in its fight against drugs that they should avoid and the successes they should replicate.
Drug control is becoming an increasingly important aspect of the U.S.-Chinese relationship. In March 2017, China banned the production of four variants of fentanyl, largely in response to engagement from the Obama administration. But the Trump administration has failed to expand that dialogue. It needs to work with China to curb the illegal shipment of fentanyl to the United States and the common practice of producing new, slightly altered drugs to avoid legal restrictions.
Drug control discussions with India—an equally large producer of precursors of illegal drugs and, increasingly, of synthetic ones—are far less advanced. That’s because India remains in profound denial about its part in the global drug trade. It refuses even to acknowledge its role in the supply of illegal precursors, let alone of synthetics, and has failed to adequately crack down on the factories that illegally produce and distribute them. In any event, the production of synthetic drugs won’t remain confined to the developing world. Already, many are made in rich countries, especially in western Europe. If this trend continues, drug-consuming countries, which tend to be wealthy and powerful, may no longer need to pressure producing countries, which tend to be neither, because the problem will have moved closer to home.
From a foreign policy perspective, although the rise of synthetic opioids presents new dangers, it will give countries opportunities to improve important international relationships. But when it comes to public health, the picture is consistently grim: a burgeoning opioid supply—either of prescription pain medications or of black-market opioids—could create a global pandemic, subjecting millions of people to disabling and potentially lethal addiction. That outcome is still avoidable, but only if the world’s governments stop sleepwalking toward disaster.