The Price of Enforcement

If you want to get any medicine that contains pseudoephedrine you’re in for a lot of fun. Because pseudoephedrine is used to manufacture meth and meth has been declared verboten by the state pseudoephedrine has become a controlled substance. In order to pick up even basic cold or allergy medicine you must go to the counter, present ID, get the purchase recorded, and make sure you don’t accidentally buy more than you’re allowed. Bruce Schneier, being a security minded bloke, found an article that talks about the cost of enforcing these controls:

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.

$1.5 billion of additional costs just to enforce the government’s desire on prohibiting the possession and use of a specific substance. As with any government prohibition the cost is not merely financial but in the reduction of quality of life:

Of course, those wouldn’t be the real costs, because lots of people wouldn’t be able to take the time for a doctor’s visit. So they’d just be more miserable while their colds last. What’s the cost of that–in suffering, in lost productivity?

Many substances made illegal by the federal government have medicinal, or other, uses. Cannabis has been shown to help in the fight against cancer but has been declared illegal so billions of dollars have to be spent in order to research alternative methods of providing the same affects. Between the costs in enforcing the prohibition, finding alternatives, and the cost to consumers tacked on to recover the costs of researching alternatives the government has pissed away money that could have been used for far more productive uses. Instead people are forced to pay additional taxes to fund the war on drugs, which means each person has less money to use in improving their quality of life.

In the case of pseudoephedrine controls people could be forced to simply suffer symptoms that we’ve been able to mitigate for a reasonable price because the additional costs required to enforce these government controls are simply too much for most people to bear (compared to dealing with their cold symptoms). Doctors will also have less time to treat the truly sick as they’ll have their time taken up by those suffering minor ailments that need prescriptions to get medicine that was previously easy to obtain (and thus cheaper).

Let’s stop this constant attack on our quality of life by getting the government out.