1. health and fitness
2. addiction

BY CHRISTOPHER STOMBERG, PH.D. & ARUN SHARMA
FEBRUARY 2012
MAKING COLD MEDICINE RX ONLY
DID NOT REDUCE METH USE
ANALYZING THE IMPACT OF OREGON’S PRESCRIPTION-ONLY PSEUDOEPHEDRINE REQUIREMENT
Cascade Policy
Institute
t: 503.242.0900
f: 503.242.3822
www.cascadepolicy.org
[email protected]
OREGON
CASCADE POLICY INSTITUTE: MAKING COLD
MEDICINE RX-ONLY
4850
DID NOT
SW
REDUCE
Scholls
METH USE
Ferry
Road Suite 103, Portland, OR 97225
AUTHORS
ACKNOWLEDGEMENTS
This report was authored by Chris Stomberg and
Arun Sharma.
Funding for this study was provided by a grant from the
Consumer Healthcare Products Association (CHPA),
a member-based association representing the leading
manufacturers and distributors of nonprescription,
over-the-counter (OTC) medicines.
Chris Stomberg is a Partner and Arun Sharma is
a Principal in the Antitrust and Competition, and
Healthcare practices at Bates White, LLC, 1300 Eye
Street NW, Suite 600, Washington, DC 20005
| 202.408.6110 | www.bateswhite.com.
CASCADE POLICY INSTITUTE
Founded in 1991, Cascade Policy Institute is Oregon’s
premier policy research center. Cascade’s mission is
to explore and promote public policy alternatives that
foster individual liberty, personal responsibility and economic opportunity. To that end, the Institute publishes
policy studies, provides public speakers, organizes community forums and sponsors educational programs.
Cascade Policy Institute is a tax-exempt educational
organization as defined under IRS code 501(c)(3). Cascade neither solicits nor accepts government funding
and is supported by individual, foundation and business
contributions. Nothing appearing in this document is
to be construed as necessarily representing the views of
Cascade or its donors. The views expressed herein are
the authors’ own.
Copyright 2012 by Cascade Policy Institute. All rights reserved.
CASCADE POLICY INSTITUTE: MAKING COLD MEDICINE RX-ONLY DID NOT REDUCE METH USE
CONTENTS
PREFACE....................................................................................................................................... ii
EXECUTIVE SUMMARY..................................................................................................................... 1
I. BACKGROUND.............................................................................................................................. 3
II. METHAMPHETAMINE AVAILABILITY IN OREGON FOLLOWS A REGIONAL PATTERN....................................... 3
II.A. Decline in Regional Manufacture of Methamphetamine............................................................ 4
II.B. Methamphetamine Continues to be Highly Available Regionally.................................................. 7
III. METHAMPHETAMINE USE IN OREGON SHOWS A DECLINE THAT IS CONSISTENT WITH REGIONAL AND
NATIONAL TRENDS.......................................................................................................................... 7
III.A. Methamphetamine Treatment Episodes Have Declined in Oregon and Regionally......................... 8
III.B. Methamphetamine-Related Deaths in Oregon Are Not Declining............................................. 10
IV. COST TO CONSUMERS............................................................................................................... 10
V. CONCLUSION............................................................................................................................ 12
LIST OF FIGURES
FIGURE
FIGURE
FIGURE
FIGURE
FIGURE
1: METHAMPHETAMINE LAB INCIDENTS.................................................................................... 4
2: METHAMPHETAMINE LAB INCIDENTS (INDEX 2004=100).......................................................... 6
3: METHAMPHETAMINE TREATMENT EPISODES PER MILLION POPULATION....................................... 8
4: PERCENT CHANGE IN METHAMPHETAMINE TREATMENT EPISODES BETWEEN 2006 AND 2009.......... 9
5: METHAMPHETAMINE RELATED DEATHS IN OREGON................................................................ 10
LIST OF TABLES
TABLE 1: REGRESSION RESULTS-METHAMPHETAMINE LAB INCIDENTS....................................................... 5
CASCADE POLICY INSTITUTE: MAKING COLD MEDICINE RX-ONLY DID NOT REDUCE METH USE
i
PREFACE
In 2005 the Oregon legislature was wrestling with the
scourge of methamphetamine addiction and the dangers
of home meth labs. Cascade Policy Institute published
two papers that year warning against believing we
could solve those problems by becoming the first state
to require prescriptions for over-the-counter cold
medications whose ingredients could be used to produce
meth.* We worried that, although legislative motives
were no doubt good, a move to take effective cold
medicines off pharmacy shelves and require doctors’
prescriptions for their use likely would backfire.
We predicted that inconveniencing consumers with
head colds wouldn’t do much, if anything, to reduce
meth use or the crimes associated with its distribution.
We concluded then that meth is dangerous enough
without misguided government policies either not
helping or making the problems worse.
Six years later we decided to test our earlier assumptions
by contracting with Bates White, a Washington, D.C.
based economic consulting firm, to study what the
actual results of Oregon’s Rx-only law have been.
We are glad now to release this study authored by Chris
Stomberg and Arun Sharma. We hope it will inform
further public policy debates both here in Oregon and
around the country so that good intentions are less
likely to lead to negligible or harmful outcomes in the
future.
Sincerely,
John A. Charles, Jr.
President & CEO
* Cascade Policy Institute’s 2005 related publications:
Meth laws need a good dose of sanity
by Angela Eckhardt
How Not to Fight Meth
by Steve Buckstein
CASCADE POLICY INSTITUTE: MAKING COLD MEDICINE RX-ONLY DID NOT REDUCE METH USE
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EXECUTIVE SUMMARY
The manufacture and abuse of the illegal and addictive
drug methamphetamine is a scourge that has been
tearing at countless families and communities across the
United States for more than a decade. Oregon has been
particularly hard hit by this epidemic. In 2004, Oregon
became only the second state to pull pseudoephedrine
from retail shelves and put it behind the counter. This
law was specifically intended to curtail the manufacture
of methamphetamine, for which pseudoephedrine
is used as a chemical precursor. Then in 2005, the
State of Oregon passed a law (HB 2485, effective
September 2006) further restricting access to medicines
containing pseudoephedrine by making them available
via prescription only (hereinafter “Rx-only”).1 Oregon
was the first state to pass such a law, and so far only
Mississippi has passed a similar Rx-only law.
In this paper we review the observable patterns in
methamphetamine manufacturing and abuse in Oregon
in comparison with other regions that did not adopt
similar Rx-only laws. Our review and analysis show
that Oregon’s experience with methamphetamine
manufacture and abuse since 2006 does not stand out
from its neighbors or other parts of the United States.
This potentially calls into question whether Oregon’s
Rx-only law had any independent effect on these key
measures. Moreover, this law does come at some cost
to consumers and government and private payers. In
particular we find:
• The number of methamphetamine
lab incidents (a commonly used indicator of
methamphetamine manufacturing) in Oregon declined
significantly from 467 in 2004 to 12 in 2010 – a
decline of more than 90%. Examined in isolation,
therefore, it might appear that the Rx-only law may
have had its intended effect on methamphetamine
manufacture. However, most of this decline occurred
before the Rx-only law became effective in 2006, by
which time the number of incidents already had fallen
to 50, which strongly suggests that other factors are
driving this trend.
• However, a similar regional trend is also
evident in neighboring states that do not require a
prescription for pseudoephedrine. For example, the
number of methamphetamine lab incidents in the state
of Washington declined by more than 90% between
2004 and 2010, as well. In fact, by 2010 the number of
methamphetamine incidents per million of population
was comparable in Oregon, Washington, and California.
Statistical analysis confirms that, after accounting for
regional trends in methamphetamine lab incidents, little
distinguishes Oregon from neighboring states that did
not adopt Rx-only laws for pseudoephedrine. The exact
mechanism behind this shared decline is not known but
would appear to reflect technological or market changes
unrelated to the Oregon law.
• While incidents related to the manufacture of
methamphetamine in Oregon and regionally appear to
have declined, both state and federal law enforcement
personnel report that methamphetamine continues
to be widely available in Oregon. Law enforcement
agencies believe that local manufacture has been
replaced by trafficking of finished product from other
states and Mexico. Law enforcement agencies also note
that methamphetamine continues to contribute the
most towards drug related crime.
• A review of the data indicates that
methamphetamine usage in Oregon has declined since
the 2006 law was put into effect. For example, the
number of methamphetamine admissions to substance
abuse centers in Oregon declined about 23% between
2006 and 2009. A similar decline is also observable
in the federal government’s Arrestee Drug Abuse
Monitoring Program (ADAM) statistics for Portland,
Oregon between 2006 and 2009.2
• However, Oregon’s decline in
methamphetamine usage is consistent with a very
similar decline in other states in the region and also
more generally in the U.S. In fact, the decline in
methamphetamine treatment episodes across the United
States between 2006 and 2009 was also about 23%. The
decline in methamphetamine usage was slightly higher
in California at 29% and slightly lower in Washington
at 20%. In short, there is little to distinguish the trend
of methamphetamine usage in Oregon from states that
CASCADE POLICY INSTITUTE: MAKING COLD MEDICINE RX-ONLY DID NOT REDUCE METH USE
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have not adopted Rx-only laws.
• State law enforcement personnel indicate that
methamphetamine use in Oregon continues to be the
area’s greatest drug threat.
• Whatever the relative merits of Oregon’s
Rx-only law in combating methamphetamine abuse,
legitimate users of pseudoephedrine in Oregon incur
additional costs as a result of this law. Among the
direct costs of this law are the added time and expense
involved in visiting a doctor to obtain a prescription for
pseudoephedrine as well as the generally higher systemic
cost of the prescription drug itself.3 These costs are
borne not only by individuals, but also by government
and private payers that cover prescription medications.
Studies have estimated that such costs spread out over
a large number of legitimate uses of pseudoephedrine
could add up to be a significant sum.
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I. BACKGROUND
Methamphetamine is a stimulant that affects the central
nervous system and is a highly addictive recreational
drug.4 Since 1971, methamphetamine has been classified
as a schedule II controlled substance that is only
available through a prescription.5 To manufacture
methamphetamine illegally generally requires a key
chemical ingredient (or precursor) that can be derived
from pseudoephedrine. This pharmaceutical ingredient
is commonly found in over-the-counter (OTC) cold,
cough, and allergy medications such as Advil Cold and
Sinus, Allegra D, Claritin D, Mucinex D, and Sudafed.
Methamphetamine is one of the most abused
recreational drugs in the United States. In fact, one
government survey has estimated that more than
10 million individuals have used methamphetamine
in the United States. That is equivalent to the
entire population of Los Angeles County.6 A 2006
study that examined treatment data suggests that
methamphetamine abuse in the United States more
than doubled between 1992 and 2004.7 This study
also found that methamphetamine abuse has been
particularly high in the western part of the United
States since the early 1990s.8
Methamphetamine abuse has many negative effects
for individuals taking it including addiction, psychosis,
change in brain structure and function, and premature
death.9 Its use is also associated with most drug related
crime.10 One study has estimated the total economic
cost of methamphetamine abuse in the United States to
be $23.4 billion.11
In Oregon, methamphetamine abuse has been a major
public concern since the early 2000s. As a result,
the state legislature in Oregon has taken a series of
measures to combat methamphetamine manufacture
and abuse by controlling the availability of the precursor
pseudoephedrine. In 2004, Oregon, along with
Oklahoma, became one of the first states to put the
medications containing pseudoephedrine “behind the
counter.”12 This Oregon law also limited the amount of
pseudoephedrine that could be purchased at one time
by customers. Two years later (in 2006), the United
States Congress passed a similar law at the federal level,
the Combat Methamphetamine Epidemic Act (CMEA).
The CMEA also put pseudoephedrine behind the
counter and limited the amount sold to any particular
customer, but it did so at all pharmacies in the U.S.13
At roughly the same time that the CMEA was adopted
nationwide, Oregon went even further to control the
availability of pseudoephedrine by making medications
containing it available as “prescription only”
(hereinafter “Rx-only”) drugs. Oregon House Bill
2485, the Rx-only law, became effective in September
2006.14 Oregon was the first state to adopt such a
law; and to date, only one other state in the United
States has followed suit: Mississippi, which passed a
law to make pseudoephedrine Rx-only that became
effective in 2010.15 Meanwhile, in 2009, Mexico, which
is considered by law enforcement to be a significant
source of illegally imported methamphetamine,
completely banned the sale of pseudoephedrine.
In this study, we examine the trends following Oregon’s
Rx-only law for pseudoephedrine-containing drugs.
We begin by studying whether the manufacture
and availability of methamphetamine in Oregon is
substantially different from other comparable parts of the
country. In Section II, we examine trends in indicators
that track methamphetamine production, such as lab
incidents, in Oregon compared to other states. In Section
III, we examine trends in indicators of methamphetamine
use, such as substance abuse-related admissions, in
Oregon compared to other geographies. And finally we
explore the costs to consumers in Section IV.
II. METHAMPHETAMINE AVAILABILITY IN OREGON
FOLLOWS A REGIONAL PATTERN
Several sources of information indicate that there has
been a significant decline in local manufacturing of
methamphetamine in Oregon since the introduction
of its laws limiting access to pseudoephedrine. This
trend is mirrored in neighboring states such as
CASCADE POLICY INSTITUTE: MAKING COLD MEDICINE RX-ONLY DID NOT REDUCE METH USE
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California and Washington. However, at the same
time methamphetamine continues to be highly
available due to importation from Mexico and
alternate sources of production.
The United States Drug Enforcement Administration’s
(DEA) El Paso Intelligence Center (EPIC) provides
information that tracks this statistic for each state on an
annual basis since 2004.17
II.A. Decline in regional manufacture of
methamphetamine
Examination of the EPIC data for Oregon indeed
shows a significant drop of meth lab incidents
from 467 in 2004 to 12 in 2010 – a decline of
more than 90% – as shown in Figure 1.18 However,
close examination reveals that Oregon already had
experienced an 89% drop in meth lab incidents (from
467 to 50) by 2006, indicating that most of the drop
predates implementation of the Rx-only law. In fact,
local reporting and law enforcement have attributed
those declines to effective policing starting in 2004,
but it is important to note that the 89% drop from
2004 to 2006 also came after Oregon adopted its
earlier behind-the-counter law for pseudoephedrine.19
The enactment of Oregon’s Rx-only law in September
2006 has been connected by public officials and
newspaper articles with a substantial decline in the
number of methamphetamine incidents in Oregon.16
However, it is worth noting that Oregon experienced a
significant decline in meth labs prior to enactment of a
prescription requirement. Oregon’s earlier behind-thecounter law and other regional and national trends and
laws are certainly important factors that contributed to
the significant decline in Oregon and neighboring states
prior to enactment of the Rx-only law.
The statistic most commonly cited to reflect the
availability and manufacture of methamphetamine is
“meth lab incidents.” This statistic includes the number
of seizures of labs, dumpsites, chemicals, and equipments
that indicate local manufacture of methamphetamine.
Another important question to ask regarding these
statistics is whether the decline experienced in Oregon
is unique, or if it is part of a regional or national trend
not specifically related to Oregon’s Rx-only law. We
investigate this question by using the meth lab incident
data for other states compared with Oregon.
Figure 1: Methamphetamine lab incidents
1,000
800
Oregon’s Rx-only law
becomes effective
600
400
200
0
2004
2005
Calif ornia
2006
2007
Oregon
2008
2009
2010
Washington
Source: El Paso Information Center
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The EPIC data show that the number of meth lab
incidents has declined significantly, not only in
Oregon but also in the neighboring West Coast states
of Washington and California, as shown in Figure 1.
For example, Washington experienced a 95% drop in
incidents from 2004 to 2010 (64% from 2004 to 2006),
and California experienced a 76% drop during the
same period (and 47% from 2004 to 2006).20 Neither of
these neighboring states passed Rx-only laws. Oregon’s
experience with meth lab incidents turns out to be
mirrored throughout the entire western United States
(AZ, CA, CO, ID, MT, NM, NV, OR, UT, and WA)
where there was an 88% drop in incidents from 2004
to 2010, with 64% of that drop occurring from 2004
to 2006. Nevertheless, it is important to recognize that
Oregon’s 97% drop in meth lab incidents is near the top
(although nearly matched by neighboring Washington).
Statistical analysis confirms that, after accounting for
regional trends in methamphetamine lab incidents,
little distinguishes Oregon from neighboring
states which did not adopt Rx-only laws for
pseudoephedrine. Our statistical results derive from
difference-in-difference models estimated by using
the EPIC data.21 These models use an index of
methamphetamine lab incidents (2004=100) for each
state as a dependent variable and compare Oregon
after adoption of the 2006 law with neighboring states.
Each model accounts for individual state-level effects,
regional time trends, and regional changes in trend
after 2006.22 In the models, Oregon’s experience is
compared against three regional definitions: 1) Western
states (AZ, CA, CO, ID, MT, NM, NV, OR, UT, and
WA), 2) Neighboring states (CA, ID, NV, OR, and
WA), and 3) Pacific Northwest (OR, WA). See Table
1 for results. What we find in general is a significant
region-wide decline in methamphetamine lab incidents
prior to adoption of the 2006 law, followed by
continued, but significantly less steep, decline post2006. For example, the regression comparing Oregon
with Western states shows that the overall regional
trend is negative (-32.8) and has a p-value of less than
0.000, meaning it is highly statistically significant. The
regional post-2006 variables both signal a statistically
significant flattening of this declining trend: a lowered
intercept (-67.9 added to it) and a less negative slope
(30.2 added to the overall trend). On the other hand,
the incremental change in Oregon after adoption of
the 2006 law is small and negative (-1.3) but has a
p-value of 0.880, which is statistically insignificant.
Looking across the three models (p=0.880, p=0.972,
p=0.618), none suggests a statistically significant drop
in Oregon methamphetamine lab incidents relative
to the regional comparison groups. This corroborates
what is apparent in Figure 1: After accounting for
regional trends, we find that the Oregon law is not
associated with a statistically significant change in
methamphetamine lab incidents.
Table 1: Regression results – EPIC Methamphetamine lab incident data23
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The nationwide experience with meth lab incidents
from 2004 to 2006 was similar to the experience
in the Western states, falling substantially (55%)
over this period. Importantly, this drop occurred
in advance of the adoption of the CMEA in 2006,
so it is probably associated with other factors such
as increased law enforcement or a transition of
production of methamphetamine to locations outside
the United States. However, since 2007, there actually
has been an increase in the number of meth lab
incidents nationally, rising 84% over this time. This
change has been led primarily by a significant rise in
incidents outside the West. For example, while meth
lab incidents continued to fall in the western states
identified above (falling 49% from 2007 to 2010), the
number of incidents in the rest of the United States
more than doubled over the same period, as shown in
Figure 2. The cause of this doubling is not known, but
its timing and the divergence of experience compared
to Western states suggests it is probably not specifically
associated with national policy changes such as
adoption of the CMEA.
Figure 2: Methamphetamine lab incidents (index 2004=100)
100
Oregon’s Rx-only law
becomes effective
80
60
40
20
0
2004
2005
2006
2007
West
2008
2009
2010
Other states
Source: El Paso Information Center
Focusing on Mississippi, the only other state which has
adopted an Rx-only law, there is so far only one data
point on meth lab incidents since the adoption of its law
in 2009. The data indicate a very slight uptick in meth
lab incidents, rising between 2009 and 2010 from 691
to 698.24 At this point there is really not enough data to
evaluate the effectiveness of this law.
In summary, most of the drop in Oregon’s meth lab
incidents occurred prior to the adoption of its Rx-only
law. In fact, the overall pattern in meth lab incidents
in states across the entire western United States closely
mirrors the Oregon experience over the same period.
As a result, relatively little suggests that Oregon’s Rxonly law distinguishes it from other states in the West
on this basis. There is also too little data to suggest if
the Mississippi Rx-only has had any effect on meth lab
incidents there. Finally, the strong divergence between
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the Western states and elsewhere in the United States
in terms of meth lab incidents since 2007 suggests that
other factors that are apparently disconnected with the
timing and geography of pseudoephedrine access laws
are driving these statistics.
II.B. Methamphetamine continues to be highly
available regionally
According to recent government reports and news media,
it is clear that methamphetamine continues to be highly
available in Oregon and surrounding states in the West.
The Office of National Drug Control Policy in the
White House runs the Congressionally mandated High
Intensity Drug Trafficking Area (HIDTA) program.25
This program provides assistance to law enforcement
agencies to reduce drug trafficking and manufacture.
There are currently 28 regional HIDTA programs
across the United States, including a HIDTA region that
covers nine counties in Oregon. Each HIDTA region
publishes an annual report titled “Threat Assessment
and Counter-Drug Strategy.” According to the 2011
Oregon HIDTA report, there was a “sustained high
level of methamphetamine availability” in Oregon.26
This report also identifies the rise of Mexican drug
trafficking organizations and their role in importing
methamphetamine to Oregon. This report summarized
the decline of local manufacturing and yet a high level
of availability as follows:
Local manufacturing of methamphetamine will
remain at low levels while crystal meth will continue
to be imported across U.S. borders from largescale laboratories in Mexico. Precursor controls
at the local, national, and international level will
continue to cause pressure on the manufacture
of methamphetamine, forcing producers to find
alternative routes and sources to sustain production
levels. Expanded methamphetamine production
in Mexico, despite strict Government of Mexico
chemical control laws, will likely lead to increased
availability of crystal meth in the United States,
including Oregon.27
Various newspaper reporting and local law
enforcement agencies confirm that methamphetamine
remains widely available in Oregon with evolving
methods of production and supply. For example, the
Office of National Drug Control Policy notes the
increase in “super labs” in recent years. 28 A 2006 news
report stated that:
Oregon’s law restricting drugstore access to
pseudoephedrine only affects small time meth
cooks. The vast majority of methamphetamine
comes from so-called super-labs in Mexico and
Southern California.29
Another news article also reports the increased
involvement of Mexican drug cartels boosting
mass production of methamphetamine despite the
ban on pseudoephedrine availability in Mexico.30
For example, methamphetamine seizures at the
U.S.-Mexico border almost tripled between 2007
and 2010.31 The same article further reports the
alternate methods of methamphetamine production
employed by the Mexican drug cartels. Another
study also reports adjustments on the supply side,
such as increased trafficking from Mexico and use of
alternate precursors following measures to control
methamphetamine.32 These evolving sources of supply
were also encapsulated in a 2011 news article titled
“Oregon Finds Fighting Meth Is A Changing Battle.”33
The bottom line is that, while meth lab incidents
have indeed dropped in Oregon and throughout the
West, it is not entirely clear that this actually has had
an effect on the overall supply of methamphetamine
in these areas.
III. METHAMPHETAMINE USE IN OREGON SHOWS
A DECLINE THAT IS CONSISTENT WITH REGIONAL
AND NATIONAL TRENDS
Several sources of data and information are available
to examine the use of methamphetamine in Oregon
and across the United States. These information
sources suggest that there has been a decline in use of
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methamphetamine in Oregon, neighboring states, and
the United States more generally.
III.A. Methamphetamine treatment episodes have
declined in Oregon and regionally
Methamphetamine-related treatment episodes in
Oregon have declined by 23% since 2006 but remain
considerably higher than in neighboring states and the
United States more generally.
The United States Department of Health and Human
Services tracks drug-related admissions to substance abuse
treatment centers on a state-by-state basis in a database
called the Treatment Episodes Data Set (TEDS).34 TEDS
identifies admissions by various drug types including
methamphetamine. As seen on a population-adjusted
basis in Figure 3, the frequency of treatment episodes for
methamphetamine abuse has been declining in Oregon
since 2006. This decline appears to track similar declines
in neighboring states and the United States overall. In
fact, over the 2006 to 2009 period, methamphetamine
treatment episodes per million declined by 26.1% in
Oregon, which is essentially the same percentage decline in
the United States overall of 25.6%. The percentage decline
in California was somewhat higher, while the decline in
Washington was somewhat lower.
Figure 3: Methamphetamine treatment episodes per million population
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
2004
2005
Calif ornia
2006
Oregon
2007
Washington
2008
2009
US
Source: US Department of Health and Human Services TEDS data, US Census Bureau
The decline in methamphetamine treatment episodes
between 2006 and 2009 in Oregon is not only comparable
to other states in the region, but it is also in the middle of
the range compared to all other states. As shown in Figure
4, the drop in Oregon’s methamphetamine treatment
episode rate is just about at the median with about as many
states having a greater drop in treatment episodes than
Oregon over this period as have a smaller drop. Notably,
the states experiencing increases in treatment episodes over
this period are geographically diverse.
The main observation one might draw from these
data is that, although methamphetamine-related
treatment episodes have been falling in Oregon
since 2006, this drop essentially reflects the median
experience across states.
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Figure 4: Percent change in methamphetamine treatment episodes between 2006 and 2009
NORTH CAROLINA
WYOMING
ARKANSAS
KANSAS
MISSOURI
MARYLAND
FLORIDA
RHODE ISLAND
NEW JERSEY
CONNECTICUT
LOUISIANA
NEW YORK
HAWAII
VERMONT
COLORADO
ALABAMA
OHIO
OKLAHOMA
VIRGINIA
SOUTH CAROLINA
WASHINGTON
MICHIGAN
OREGON
MAINE
ARIZONA
IOWA
TEXAS
MISSISSIPPI
MINNESOTA
CALIFORNIA
IDAHO
WISCONSIN
UTAH
KENTUCKY
NEVADA
NEBRASKA
NEW MEXICO
SOUTH DAKOTA
NEW HAMPSHIRE
MONTANA
PENNSYLVANIA
NORTH DAKOTA
MASSACHUSETTS
ILLINOIS
INDIANA
DELAWARE
WEST VIRGINIA
-100%
23%
-50%
0%
50%
100%
150%
Source: TEDS data
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III.B. Methamphetamine-related deaths in Oregon
are not declining
Law enforcement officials indicate that
methamphetamine abuse contributes significantly to
other violent and property crimes in Oregon (though
these statistics are hard to link authoritatively to
methamphetamine abuse). An alternative measure of
the rate of methamphetamine abuse that may track the
associated crime is the number of methamphetamine-
related deaths tracked by the state police in Oregon.
As shown in Figure 5, the number of deaths
associated with methamphetamine abuse fluctuates
from year to year but is not in apparent decline.35 In
fact, between 2006 and 2010, the number of annual
methamphetamine-related deaths increased from 90
to 106. This statistic also raises interesting questions
about how to interpret the drop in methamphetaminerelated treatment episodes noted previously.
Figure 5: Methamphetamine related deaths in Oregon
120
100
80
60
Oregon’s Rx-only law
becomes effective
40
20
0
2004
2005
2006
2007
2008
2009
2010
Source: Oregon State Medical Examiner, Department of State Police, Drug Related Deaths 2010
IV. COST TO CONSUMERS
Whatever the relative merits of Oregon’s law
making pseudoephedrine Rx-only for the purpose
of combating methamphetamine abuse, legitimate
users of pseudoephedrine in Oregon are incurring
additional costs as a result of this law. Among the
direct costs of this law are the added time and expense
involved in visiting a doctor to obtain a prescription
for pseudoephedrine, as well as the generally higher
systemic cost of the prescription drug itself.36 These
costs are borne not only by individuals, but also by
government and private payers that cover prescription
medications. We will discuss the various direct and
indirect costs that a prescription requirement is likely
to add to the health care system in this section. Studies
have estimated that such costs spread out over a large
number of legitimate users of pseudoephedrine could
add up to be significant.
Pseudoephedrine has been available as an OTC
medication for almost four decades.37 It is typically
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used as an ingredient in medicines that treat sinus and
nasal congestion associated with colds, allergies, and
other upper respiratory illnesses. Pseudoephedrine
is an ingredient in some of the most widely used and
well known cold, cough, and allergy medicines such as
Sudafed and Claritin D. Total sales of drugs containing
pseudoephedrine in the United States are estimated to
be more than $500 million per year.38
The most direct effect of making pseudoephedrine Rxonly would be to force many patients to see a doctor
to obtain a prescription for common cold, cough,
and allergy remedies which could add a significant
number of doctor visits to the health care system.
The potential effects could be large. For example,
it has been estimated that viral upper respiratory
infection, more generally known as common cold,
costs the U.S. economy $17 billion in direct health
care costs and $22.5 billion in indirect costs through
productivity losses, for a total cost of $40 billion per
year.39 This economic cost is incurred by the U.S.
health care system and economy despite the significant
savings due to the availability of OTC medications
for common cold. For example, one academic study
from 1992 estimated that there were 1.65 million fewer
doctor visits per year for common cold due to the
increasing availability of effective non-prescription
OTC medications.40 Although not all of these avoided
doctor visits for cold symptoms could be attributed to
the availability of OTC pseudoephedrine, a significant
portion could be pseudoephedrine-related, as this
remains one of the most common ingredients in
non-prescription cold, cough, and allergy medicines.
Since an average doctor visit to a family practitioner
or a primary care internist is estimated to cost $64,
the total cost of the doctor visits alone could be
significant.41 The patient not only would incur the
direct cost of seeing the doctor and the increased cost
of the drug itself but also would incur travel expenses
associated with doctor visits. Moreover, the indirect
costs from time and productivity losses due to doctor
visits are not insubstantial.
Given the prescription coverage policies of most
payers, the cost to the patient (and the payer) of taking
a drug like pseudoephedrine off OTC status could
well be significant. Patients also may face reduced
choice, which is also a cost. For example, the typical
payer encourages the use of generic prescription drugs
through a standard copay amount of about $10, which
is often more expensive than the amount for which
an OTC generic can be obtained. Should the patient
decide to select a branded version, the standard copay
amount paid by the patient could be as much as $30$50, which also exceeds the amounts typically paid
for OTC medications. As a result, the patient may feel
compelled to use generic prescription drugs and pay
more for them.42
Making pseudoephedrine Rx-only is also likely to
result in some fraction of patients relying on less
effective treatments or avoiding treatment altogether
due to additional cost and hassle. Patients who avoid
treatment because of a prescription requirement will
experience a lower quality of life due to untreated
symptoms. Thus, a great concern is the impact that
a prescription requirement has on the working poor
who are uninsured or under-uninsured and thus bear
the full cost of a visit to the doctor. A silent impact
of these added costs and hurdles is that people simply
decide that the hurdles to access are too great and
elect not to treat otherwise treatable symptoms, with
resulting increases in lost work time, lost productivity,
and other adverse effects.
Although these costs may not appear to be significant
for any one patient or episode, they are distributed
over a large number of patients and treatment
episodes, so they may add up to a significant sum.
To put the potential losses in perspective, an
academic study from 1992 found that the total value
created by switching cold and cough medicine from
prescription to OTC was $770 million in 1989 alone.43
In 2010 dollars this represents more than $2 billion
in economic value per year.44 At least some of the
economic value created by making cold and cough
medicine non-prescription is likely to be reversed by
making pseudoephedrine Rx-only.
CASCADE POLICY INSTITUTE: MAKING COLD MEDICINE RX-ONLY DID NOT REDUCE METH USE
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More recent studies also have found significant
savings to the U.S. health care system that are due
to OTC medication. For example, one study finds
that every dollar spent on OTC medicine results in
between $6 and $7 in other health care savings.45
A Northwestern University study determined that
the use of certain OTCs to treat upper respiratory
infections saves the U.S. health care system and
economy $4.75 billion annually.46
V. CONCLUSION
In 2006, an Oregon law went into effect that made
pseudoephedrine available only with a prescription in
order to combat the illegal manufacture and abuse of
methamphetamine. As of today, Oregon remains only
one of two states which have enacted Rx-only laws
for pseudoephedrine-containing drugs, and Oregon
is the only state with significant experience with the
effects of such a law. In this paper we have examined
this experience. We find that, although meth lab
incidents have declined dramatically in Oregon, much
of this trend was established before Oregon’s Rx-only
law was put in place in 2006. Moreover, Oregon’s
decline in meth lab incidents is also closely mirrored
by neighboring states in the West (most particularly
Washington). Statistical analysis confirms that, after
accounting for these regional trends, Oregon’s Rx-only
law is not actually associated with a significant change
in methamphetamine lab incidents. We additionally
find that, although methamphetamine-related
treatment episodes have been declining in Oregon,
they also have been declining in neighboring states
and throughout the United States. Finally, we note that
methamphetamine-related deaths have not been falling
in Oregon since 2006.
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ENDNOTES
Prior to making pseudoephedrine Rx-only, Oregon
had laws restricting access to pseudoephedrinecontaining products by, for example, requiring
that they be sold “behind the counter,” placing
restrictions on the amounts purchased, and imposing
reporting requirements. Federal law, effective in 2006,
implemented similar restrictions nationwide.
1
Of note is that the ADAM statistics for Portland show
a sharp increase in 2010.
“Methamphetamine Trends In the United States,” July
2010.
10
2011 Oregon HIDTA, “Threat Assessment and
Counter Drug Strategy,” available at http://www.
co.umatilla.or.us/pdf/Sheriff_2011_OR_HIDTA.pdf.
11
Nancy Nicosia et al, “The Economic Cost of
Methamphetamine Use in the United States, 2005,
2009,” RAND Corporation monograph, 2009.
2
Other indirect costs may apply as well. For example,
for many uninsured and underinsured consumers, the
cost of obtaining a prescription for pseudoephedrine
may be prohibitive, with the consequence that they are
effectively forced to choose alternative and possibly less
effective treatments.
3
Office of National Drug Control Policy,
“Methamphetamine Trends In the United States,” July
2010, available at http://www.whitehouse.gov/sites/
default/files/ondcp/Fact_Sheets/pseudoephedrine_
fact_sheet_7-16-10_0.pdf; National Institute on Drug
Abuse, “Methamphetamine Abuse and Addiction,”
September 2006.
4
National Institute on Drug Abuse, “Methamphetamine
Abuse and Addiction,” September 2006.
Methamphetamine can be legally prescribed for the
treatment of some medical conditions. However, the
legal medical use of methamphetamine is limited.
5
U.S. Census Bureau: State and County QuickFacts.
Available at http://quickfacts.census.gov/qfd/
states/06/06037.html.
6
National Institute on Drug Abuse, “Methamphetamine
Abuse and Addiction,” September 2006.
8
Ibid.
7
9
Office of National Drug Control Policy,
“Methamphetamine Trends In the United States,” July
2010. Non-prescription medicines such as Tylenol and
Advil are generally available on the shelves directly
accessible to customers in retail stores and are referred
to as “over-the-counter” medicines. However, a small
set of non-prescription medicines are kept “behind the
counter” and only accessible to store employees.
13
Office of National Drug Control Policy,
“Methamphetamine Trends In the United States,” July
2010.
12
Ibid.
15
More than 20 states have considered the
pseudoephedrine Rx-only law, but Oregon and
Mississippi remain the only two states which have
enacted the law to date.
14
See Wayne Green, “Oregon a test case for
pseudoephedrine drug law,” Tulsa World, June 27, 2011;
Statement of Senator Ron Wyden, April 13, 2010; Rob
Bovett, “How to Kill the Meth Monster,” The New York
Times, November 15, 2010; Office of National Drug
Control Policy, “Methamphetamine Trends In the
United States,” July 2010.
17
http://www.justice.gov/dea/concern/map_lab_
seizures.html, accessed January 2012.
18
Ibid.
16
Office of National Drug Control Policy,
CASCADE POLICY INSTITUTE: MAKING COLD MEDICINE RX-ONLY DID NOT REDUCE METH USE
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Colin Fogerty, “Oregon Meth Law Requires
Prescription for Cold Meds,” National Public Radio, July 1,
2006; See also, footnote 17.
19
http://www.justice.gov/dea/concern/map_lab_
seizures.html
24
http://www.whitehouse.gov/ondcp/high-intensitydrug-trafficking-areas-program
25
Comparing these three states in terms of incidents per
million of population suggests that California stands
out as having a much lower incident rate compared to
the other two states, but all three converge to a similarly
low level by 2010.
21
The difference-in-difference methodology we use is a
common technique for comparing the effects of a policy
that is adopted in one place and time to other places and
times where it was not adopted.
20
For robustness checking, a second set of models
were estimated using growth rates (frequently negative
in this case) in methamphetamine lab incidents from
year to year. Time trend variables are omitted from
these specifications because time trends are generally
removed by the computation of percentage changes.
These models corroborate the patterns identified by the
models based on indexes.
22
All models are based on a panel dataset derived from
the EPIC data. Each model employs indicator variables
identifying each state included in the regression with
Oregon omitted as the comparator. For clarity, the
coefficients on these “fixed effect” variables have been
suppressed. The column marked “Regional trend”
measures the coefficient on a time trend variable
common to all states included in the regression. The
column marked “Regional change post 2006” measures
the coefficient on an indicator variable that is one for
years after 2006 and zero otherwise (in all states). The
column marked “Regional change in trend post-2006”
measures the coefficient on the interaction of the time
trend and post-2006 indicator variables. The column
marked “Oregon post-2006 change” measures the
change in post-2006 Oregon lab incidents that is not
captured by regional trends (and trends in Oregon prior
to 2006). All standard errors are computed using White’s
robust techniques.
23
2011 Oregon HIDTA, “Threat Assessment and
Counter Drug Strategy,” available at http://www.
co.umatilla.or.us/pdf/Sheriff_2011_OR_HIDTA.pdf.
26
2011 Oregon HIDTA, “Threat Assessment and
Counter Drug Strategy.”
27
Office of National Drug Control Policy,
“Methamphetamine Trends In the United States,” July
2010.
28
Colin Fogerty, “Oregon Meth Law Requires
Prescription for Cold Meds,” National Public Radio, July
1, 2006.
29
Nicholas Casey, “Mexico Elbows Into U.S. Meth
Trade,” The Wall Street Journal, August 5, 2011.
30
31
Ibid.
Jane Maxwell and Mary-Lynn Brecht,
“Methamphetamine: Here we go again?”, Addictive
Behaviors 36 (2011) 1168–1173.
32
April Baer, “Oregon Finds Fighting Meth Is A
Changing Battle,” National Public Radio, July 4, 2011.
33
http://wwwdasis.samhsa.gov/webt/information.htm.
States differ in their reporting standards for substance
abuse centers and the availability of treatment centers.
As a result, the number of treatments across states
may not be directly comparable. However, one can still
compare the trends across states as long as there are
not any systematic changes over time in the reporting
standards for treatment centers and the availability of
treatment centers within states.
34
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http://www.oregon.gov/OSP/NEWSRL/
news/05_13_2011_state_ME_2010_drug_death_stats.
shtml
35
Other indirect costs may apply as well. For example,
for many uninsured and underinsured consumers, the
cost of obtaining a prescription for pseudoephedrine
may be prohibitive, with the consequence that they are
effectively forced to choose alternative and possibly less
effective treatments.
37
Pseudoephedrine was approved for over-the-counter
use by the Food and Drug Administration (FDA) in
1976. See Office of National Drug Control Policy,
“Methamphetamine Trends In the United States,” July
2010. It is worth noting that prescription-only drugs
receive particular scrutiny from the FDA before they
are approved for over-the-counter use, with significant
weight being given to the ability of patients to selfdiagnose and self-treat in a safe and effective manner.
Such determinations are made after extensive study
of the benefits and risks of making the drug nonprescription.
38
http://www.stateline.org/live/details/
story?contentId=468500
39
Mark Fendrick et al, “The Economic Burden of NonInfluenza-Related Viral Respiratory Tract Infection in
the United States,” Archives of Internal Medicine, vol. 163,
February 24, 2003. See also, http://www.medicineclinic.
org/AmbulatorySyllabus4/NEW%20URI.htm.
36
Respiratory Infection.”
Peter Temin, “Realized Benefits From Switching
Drugs,” Journal of Law and Economics, vol. XXXV, 1992.
44
Calculations based on Medical CPI, Bureau of Labor
Statistics.
45
The Value of OTC Medicine to the United States,
Booz & Co., January 2012.
46
Lipsky, Martin S., Teresa Waters, and Robert Golub,
“An Economic Analysis for Treating Viral Upper
Respiratory Tract Infection in the United States,” 2004.
43
Peter Temin, “Realized Benefits From Switching
Drugs,” Journal of Law and Economics, vol. XXXV, 1992.
41
http://www.aafp.org/online/en/home/media/chartsand-graphs.html
42
Given that doctors frequently prescribe counterindicated oral antibiotics to patients presenting with
viral upper respiratory infections, one can also count
the cost of these drugs and their potential side effects
as a cost. See e.g. Rabkin, Miriam, M.D., M.P.H., “Upper
40
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