Who funded America’s opiate epidemic? You did.

Dreamland by Sam Quinones talks a little about the economics of America’s opiate epidemic. On one side was the evil Purdue Pharma, which collected tens of billions of dollars in revenue for OxyContin. But who was on the other side? Most drug addicts don’t have a lot of money. The answer turns out to be that you the taxpayer were on the other side:

And so the Medicaid card entered our story. The card provides health insurance through Medicaid, and part of that insurance pays for medicine—whatever pills a doctor deems that the insured patient needs. Among those who receive Medicaid cards are people on state welfare or on a federal disability program known as SSI (Supplemental Security Income). In Scioto County, annual SSI applicants almost doubled in the decade ending 2008—from 870 to 1,600. An untrained observer of Portsmouth’s bleak economic landscape might have understood; jobs, after all, were scarce. People needed money and that check helped. That was true, but by then pills and pain clinics had altered the classic welfare calculus: It wasn’t the monthly SSI check people cared so much about; rather, they wanted the Medicaid card that came with it. If you could get a prescription from a willing doctor—and Portsmouth had plenty of those—the Medicaid health insurance cards paid for that prescription every month. For a three-dollar Medicaid co-pay, therefore, an addict got pills priced at a thousand dollars, with the difference paid for by U.S. and state taxpayers. A user could turn around and sell those pills, obtained for that three-dollar co-pay, for as much as ten thousand dollars on the street.

Combined with pill mills, the Medicaid card scam allowed prolific quantities of prescription medication to hit the streets. The more pills that sloshed around the region, the more people grew addicted, and the bigger the business grew, and the more people died. The Oxy black market might never have spread and deepened so quickly had addicts been forced to pay for all those pills with cash at market prices.

“Twenty years ago they were drawing SSDI and full workers’ comp—say, eighteen hundred dollars a month,” said Brent Turner, the commonwealth prosecutor for that part of eastern Kentucky, whose career began in 2000, just as OxyContin became a business for impoverished families across Appalachia. “The checks were higher because they’d go work in the mines and pay into their [SSDI] disability. Now we’ve got people who aren’t working, who are drawing SSI, maybe five hundred dollars a month. We’ve got people who have kids and wives and the whole family trying to survive on five hundred dollars. I’m not making excuses for them. Many haven’t had a job. But it is what it is. When you don’t work, and never have had a job, or paid into the system, you don’t qualify for much. We have boatloads of people who qualify only for SSI. You wouldn’t believe the number of people we see, twenty or thirty years old, have never had a job and are drawing checks since they were teenagers. “That was one of the driving factors when pills exploded. We can talk morality all day long, but if you’re drawing five hundred dollars a month and you have a Medicaid card that allows you to get a monthly supply of pills worth several thousand dollars, you’re going to sell your pills.”

Other families, though, had been unemployed for generations and on government assistance. Up to then, they had resorted to small-time criminal activities, but remained minor irritants in holler life. When Oxy came along, however, the sorriest families were transformed into dominant and unruly forces.

Back home, [the pill dealer] made a killing on the first of the month when the SSI checks arrived in Floyd County.

He watched capable young people get themselves declared “simple” to get SSI and the Medicaid card, and thus access to pills.

The author elsewhere praises liberal Democrats and condemns conservative Republicans, so I don’t think the above passages were driven by a bias against government welfare programs. And in fact the author directly praises anyone working for the government as implicitly altruistic:

As I tried to chart the spread of the opiate epidemic, one thing dawned on me: Other than addicts and traffickers, most of the people I was speaking to were government workers. They were the only ones I saw fighting this scourge. We’ve seen a demonization of government and the exaltation of the free market in America over the previous thirty years. But here was a story where the battle against the free market’s worst effects was taken on mostly by anonymous public employees. These were local cops like Dennis Chavez and Jes Sandoval, prosecutors like Kathleen Bickers, federal agents like Jim Kuykendall and Rock Stone, coroners like Terry Johnson, public nurses like Lisa Roberts, scientists at the Centers for Disease Control, judges like Seth Norman, state pharmacists like Jaymie Mai, and epidemiologists like Jennifer Sabel and Ed Socie

The author lives in California so he is presumably aware that government workers do get paid (examples). He doesn’t explain why a police officer, DEA agent, prosecutor, judge, or prison guard would be upset to have a job, steady paycheck, and pension due to the existence of opiate addicts.

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6 Comments

  1. Andy

    December 21, 2016 @ 4:29 pm

    1

    Freemarket is apparently solving the issue. The price of heroin has never been lower, the availability never greater, and the potency never stronger. Once Trump installs El Chapo as the head of the DEA (as long experience in litigating against the agency one is to head seems to be a requisite for the job), we should expect further drop in price due to reduced regulatory burden. DEA will now be able to claim 100% illicit drug interdiction success rate as it is able to track the product from poppy field to vein via UPS logistics. The Mexican drug mules will no longer be able to compete and thus self deport.

  2. anonymous

    December 21, 2016 @ 4:54 pm

    2

    A dollar a milligram. OxyContin 40 mg two tablets three times daily and oxycodone 5 mg 2 tablets 4 times daily for 30 days = $8400. Add a few enhancers to the high that are prescription drugs such as Ritalin, Adderall, Valium and Xanax and you are earning serious money.

  3. carbon5

    December 21, 2016 @ 8:59 pm

    3

    People should read up on opiate addiction before passing judgement on opiates, addicts and addiction:

    The Consumers Union Report – Licit and Illicit Drugs
    http://www.druglibrary.org/schaffer/Library/studies/cu/cumenu.htm

    Maybe opiates aren’t as harmful as commonly thought:

    Chapter 4. Effects of opium, morphine, and heroin on addicts
    http://www.druglibrary.org/schaffer/Library/studies/cu/cu4.html

    “We finally wrote to some of the most eminent research workers in the field of drug addiction, explaining our problem and requesting scientific data on the deleterious effects of narcotic drugs. They indicated, in their reply, that there was no real evidence of brain damage or other serious organic disease resulting from the continued use of narcotics (morphine and related substances), but that there was undoubted psychological and social damage. However, they made no differentiation between such damage as might be caused by narcotics and that which might have been present before addiction, or might have been caused, at least in part, by other factors. Moreover, they were unable to direct us to any actual studies on the alleged harmful effects of narcotic drugs.

    “At a later date we also consulted officials of the United Nations Commission on Narcotic Drugs, and they, too, were unable to direct us to any scientific studies on the actual damaging effects of morphine or heroin addiction.

    The Narcotic Control Division of the Canadian Government’s Department of Health and Welfare was likewise unable to direct us to scientific studies on this subject.”

    Some people can live fulfilling lives as opiate addicts:

    Chapter 5. Some eminent narcotics addicts
    http://www.druglibrary.org/schaffer/Library/studies/cu/cu5.html

    “Halsted’s skill and ingenuity as a surgeon during his years of addiction to morphine earned him national and international renown. For Lister’s concept of antisepsis— measures to kill germs in operation wounds Halsted substituted asepsis: measures to keep germs out of the wound in the first place. In this and other ways, he pioneered techniques for minimizing the damage done to delicate tissues during an operation. Precision became his surgical trademark. A British surgeon, Lord Moynihan, admiringly described the Halsted technique at the operating table as one of “frequently light, swift, sparing movements with the sharpest of knives, instead of free, heavy-handed deep cutting; of no hemorrhage or the minimum of hemorrhage instead of the severance of many vessels, each bleeding freely until clipped .” For pioneering improvements such as these, Halsted became widely known as “the father of modern surgery.””

  4. the other Donald

    December 22, 2016 @ 9:24 am

    4

    It’s always helpful to follow the money, whatever the source.

  5. Jack D

    December 22, 2016 @ 10:40 am

    5

    Having the government fund opiate addiction and also fund government employees to fight opiate addiction is a wonderfully complementary and self-contained cycle, like a self-drinking cup of tea. You just feed the machine with endless taxpayer dollars and it runs nicely.

  6. Smartest Woman on the Internet

    December 22, 2016 @ 6:18 pm

    6

    Government-subsidized pain pills have been a very successful jobs program – chemists, pharmacists, police, prosecutors, jailers, counselors, EMS, and undertakers. This government jobs program probably lowered the unemployment rate a full percentage point or more.

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