Don't Eat the Brown Acid: Induced ‘Malnovation’ in Drug Markets

Abstract

Title II, the Controlled Substances Act (CSA), of the Comprehensive Drug Abuse Prevention and Control Act of 1970 created the system of drug scheduling and regulation used to this day. This paper illustrates how the CSA created the incentives for induced ‘malnovation’ (innovation intended to circumvent legislation, and thus foil policymakers’ intended ends) into drug markets, namely “designer drugs.” As a result of this induced malnovation, drug markets have not only increased in variance of products available that are often sold under similar street names, but there is a tendency towards creating more dangerous drugs in an attempt to stay outside of the regulation.

Keywords: induced malnovation, Comprehensive Drug Abuse Prevention and Control Act of 1970, Controlled Substances Act, designer drugs

JEL Classification: K42, L51, O31