Supply-Side Drug Policy in the Presence of Substitutes: Evidence from the Introduction of Abuse-Deterrent Opioids
*Names in bold indicate Presenter
In this paper, we study the effects of a major supply-side intervention—the introduction of an abuse-deterrent version of OxyContin—on the misuse of and deaths from both OxyContin and its substitute drugs. The August 2010 reformulation of OxyContin represented a significant reduction in the supply of abusable opioids. Coinciding with OxyContin’s reformulation, the rise in opioid-related mortality slowed in 2011 and, for the first time since 1990, dropped in 2012. This recent decline also coincided with a sudden three-fold increase in heroin overdoses between 2010 and 2013. Our main analysis exploits state-level variation in pre-reformulation rates of OxyContin misuse using data from the National Survey on Drug Use and Health (NSDUH). States with lower pre-2010 rates of OxyContin misuse are less affected by the reformulation of OxyContin relative to states with higher rates of OxyContin misuse. We find substantial differential reductions in OxyContin misuse across states after 2010, but only a small differential reduction in overall opioid abuse and mortality, potentially due to substitution towards more harmful opioids. We also find that states with higher rates of OxyContin misuse prior to the reformulation experienced significantly larger increases in both heroin substance abuse treatment admissions and heroin-related mortality. There is little evidence that these results can be explained by differential pre-existing trends across states as both the trends and levels of heroin-related mortality were similar before 2010 across states with high and low rates of OxyContin misuse. Overall, we find that the increase in heroin deaths offset any reductions in opioid-related mortality due to the reformulation of OxyContin. Our estimates imply that a 10% reduction in OxyContin misuse due to supply-side interventions leads to a 36% increase in heroin deaths and an 8% increase in heroin substance abuse treatment admissions.
The results suggest that supply-side interventions must account for substitutability to more harmful drugs and that the benefits of such policies are limited when drugs are highly substitutable. Given that many drugs have harmful substitutes, the results imply that supply-side policies should target classes of drugs more broadly. In addition, the limits of supply-side policies may recommend demand-side interventions such as increased access to substance abuse treatment.