Disrupting Drug Markets: The Effects of Crackdowns on Rogue Opioid Suppliers

Abstract

This paper estimates the impacts of doctor crackdowns on the quantity demanded of prescription opioids, across-market substitution, and across-product substitution. Exploiting plausibly exogenous variation in the timing and location of administrative actions, I find that cracking down on a single doctor decreases county-level opioid dispensing by 10%. This decline persists across space and grows over time. Additionally, significant heroin substitution occurs, yet overall overdose mortality decreases. These results highlight a critical tradeoff policymakers should consider with targeted crackdowns: reductions in the flow of new users must be balanced against the harm that arises when existing users substitute to more dangerous drugs.

Note:
Funding Information: None to declare.

Declaration of Interests: None to declare.

Keywords: drug epidemic, opioids, enforcement

JEL Classification: H12, I10, K42