Policy-Induced Substitution to Illicit Drugs and Implications for Law Enforcement Activity

Abstract

US states have implemented many policies to lessen the severity of the opioid crisis. This study investigates two classes of policies--Prescription Drug Monitoring Programs (PDMPs) and their usage mandates and ``Pill Mill Bills"--and their effects on illicit drug markets. PDMPs and their prescriber-usage mandates (Mandates) target opioid-abusing individuals and Pill Mill Bills target over-prescribing practitioners. The paper is novel in its focus on illicit opioid markets and use of crime data. I perform difference-in-differences analyses to study policy-induced substitution to heroin and illicit opioids as measured through rates of heroin and diverted opioid possession and dealers. There is evidence that PDMPs and Mandates increase heroin possession within counties that are opioid-dense prior to the policies, and Pill Mill Bills decrease heroin sellers in highly opioid-dense counties. I do not find evidence that the PDMP, Mandate or Pill Mill Bill influences heroin and opioid crime in counties that are less opioid-dense prior to the policies taking effect.

Keywords: opioid, opioid crisis, opioid epidemic, heroin, fentanyl, illicit drugs, PDMP, must-access PDMP, pill mill, prescription, prescription drug monitoring program, drug policy, prescription monitoring, OxyContin, oxycodone, crime, drug crime, heroin overdose, overdose, drug overdose, opioid overdose

JEL Classification: I12, I18, K42