The Sudafed Security Trade-Off
This writer wrestles with the costs and benefits of tighter controls on pseudoephedrine, a key chemical used to make methamphetamine:
Now, personally, I sincerely doubt that the pharmaceutical industry has reliable estimates of how many of their purchasers actually have colds—or that they would share data indicating that half of their revenues came from meth cooks. But let’s say this is accurate: half of all pseudoephedrine is sold to meth labs. That still wouldn’t mean that manufacturers of cold medicines are making “hundreds of millions of dollars a year” off of the stuff—not in the sense that they end up hundreds of millions of dollars richer. The margins on off-patent medicines are not high, and in retail, 50% or more of the cost of the product is retailer and distributor markup*. Then there’s the costs of manufacturing.
But this is sort of a side issue. What really bothers me is the way that Humphreys—and others who show up in the comments—regard the rather extraordinary cost of making PSE prescription-only as too trivial to mention.
Let’s return to those 15 million cold sufferers. Assume that on average, they want one box a year. That’s going to require a visit to the doctor. At an average copay of $20, their costs alone would be $300 million a year, but of course, the health care system is also paying a substantial amount for the doctor’s visit. The average reimbursement from private insurance is $130; for Medicare, it’s about $60. Medicaid pays less, but that’s why people on Medicaid have such a hard time finding a doctor. So average those two together, and add the copays, and you’ve got at least $1.5 billion in direct costs to obtain a simple decongestant. But that doesn’t include the hassle and possibly lost wages for the doctor’s visits. Nor the possible secondary effects of putting more demands on an already none-too-plentiful supply of primary care physicians.
I like seeing the debate framed as a security trade-off.
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Winter • February 15, 2012 7:28 AM
The number of synthetic and natural substances that affect psychological state is for all purposes infinite. Trying to ban the the trade in chemical supplies is an arms race that kills all parts of the economy, except the illicit drug trade.
On the other hand, the effort now spend on controlling these substances could be spend on controlling their (limited) bad effects on their users. In countries where they do that they have less users, much less problems, and even much less spending.
As a security trade off, abating the risks of methamphetamine after use by information and health care is way cheaper and more effective than any policy that includes a ban.