 Okay ladies and gentlemen let's get started. I want to thank everybody for coming here this afternoon. It's a nice size group here for Condon and but it's a really dismal topic the opioid crisis in the United States in particular but it's a somewhat of a worldwide phenomenon as well. I did my dissertation here at Auburn University on the economics of prohibition and I wrote several articles in academic journals and popular publications with the Mises Institute and other places for many many years and as we got into the 2000s I was hired to be a macroeconomist and I saw that we were winning the war on drugs at least the preliminary steps and I kind of lost touch in terms of my academic work with the war on drugs and then a few years later after that I realized that this opioid epidemic or crisis as it's been called was spreading very very rapidly and it was killing more people than in the war on drugs on its own. Okay so the war on drugs on its own was killing in the general range of 10,000 people per year. The opioid crisis quickly eclipsed those awful tragic statistics and so for the last six or seven years I've been lecturing about the opioid crisis for the last three years here at Mises University but literally everywhere I go so if I go out to eat with some friends I talk about it. If I go to the Qantas Club I talk about it. If I go to the Lee County Builders Association luncheon I talk about it even though my up my real talk might be on something completely different because this epidemic that's got a hold of us collectively here in the United States is really ruining in addition to killing people it's ruining so many people's lives it's hurting the economy it's actually undermining some several different government budgets so it's having pervasive effects on us as Americans even if you are directly affected so far from this awful problem and basically the big problem will you know I'll tell you where this is all coming from but the biggest problem now is actually in the area of legal drugs legally prescribed drugs in the economy we're going to see who is responsible for all that so this is the chart I used last year in this class and you'll notice that the total number of deaths overdose deaths from 2000 to 2015 it tops out at about 10 people per 100 thousand and then there are prescription drugs heroin and other synthetics most notably fentanyl which has killed several celebrities these are spiking whereas the prescription drugs have leveled off but the total is still rising here now for this year looking at 2016 data notice that total opiate overdose deaths has risen to above 13 so it's a massive increase of overdose deaths involving opioids in just one year so we've gone from about 10 last year in 2015 data to over 13 and there's been some changes down here they've broken out methadone from prescription drugs but as you can see heroin and other synthetic drugs has increased in number significantly so a lot of people are being fooled by these synthetic opiates and it's causing a lot of deaths okay so what we're talking about here is things like oxy cotton and Vicodin and there's about a half a dozen of them all together and basically the big pharmaceutical companies have encouraged these developments there's something called the pain prescribing guidelines set by a panel that meets in Washington DC occasionally to suggest guidelines so that all doctors share the same guidelines as to what to prescribe under certain circumstances this group of doctors scientists researchers in my mind were basically bought off by the pharmaceutical companies in the form of grants in the form of travel in the form of speaking fees in excess in many cases of over a hundred thousand dollars per year and this panel changed the guidelines in the early in the two thousands so that now opioid prescription drugs can be prescribed for just about everything okay so in the old days typically speaking these drugs were used in hospital settings for cancer patient terminal patients things of that like over the last several years if you're a high school football player and you wreck your shoulder you get oxy cotton if you're a minor or a fisherman and you get hit with a piece of equipment and you're injured you now get one of these opioid drugs if you fall down the stairs and break your leg or whatever it happens to be the guidelines now suggest that you the doctor should be giving you these opioid painkiller drugs okay and most of the time the patients don't even know what they're taking and so they went through a big campaign not just with the committee but they also touted various research for example this one letter to the editor for the journal of the American Medical Association which was written by a graduate student is quoted in many of these research papers and she was involved with a study while a graduate student that monitored 40,000 people in hospitals where patients were given oxy cotton, Vicodin etc and only four of those patients subsequently became addicted so point zero one of one percent became addictive and this letter to the editor was widely quoted in this campaign to get doctors to prescribe these powerful painkillers of course if you're using the hospital just a few days you're usually only given these painkillers in the hospital for a few days and you're being given them by nurses and so forth so you're under direct supervision for short-term use that usually does not lead to addiction it's longer-term heavier use where people very often get physically addicted and then dependent upon these drugs okay so the prescribing guidelines encouraged their use by doctors and patients, physicians were otherwise encouraged to follow the guidelines if you don't follow the guidelines you could be sued for one thing you could be possibly arrested and also insurance companies and Medicare do patient surveys of their clients to determine whether you the doctor adequately treated them and so if you're expecting to get a prescription if you're expecting to get a powerful painkiller and you don't get it you can answer the survey and undermine the payments that doctors receive and hospitals receive so it's not just the guidelines that change but also the economic incentives are also changed okay so now it's it's very typical for painful injuries to be treated with opiate prescription drugs and you're typically given a 30-day or 60-day or a 90-day prescription you might take one two three a day in more severe cases maybe four a day and it's this level of use in terms of length and in terms of the the quantity aspect that leads to the likelihood or the increased likelihood of physical addiction so moving away from that point zero one of one percent to something much higher so as a result many people have become addicted and as of 2015 there was approximately 15,000 overdose deaths from prescription painkillers I saw a report recently that suggests that the research responsible for getting these statistics does underestimate the actual number of deaths because people in a situation they don't want the cause of death you know of your minister or your math teacher or your grandmother to be listed as opioids so why the epidemic so we're going to separate the problems of the war on drugs from the epidemic so the pain prescription guidelines start to change after the year 2000 by 2012 250 million prescriptions were written in the year 2012 for opioid prescriptions so even if everyone was given 12 monthly prescriptions during that year that's still 10 million people getting these drugs in large amounts for extended periods of time researchers estimate that 25% of the people who are prescribed misuse the drug and misuse can mean a variety of things not following the prescription guidelines taking too much at one time giving pills away selling pills all sorts of things of those who misuse 10% get an opioid use disorder and this is more directly linked with addiction and of that number 5% transition to heroin so we've got literally millions of people in the United States alone who get caught in this trap so you got say 60 days three tablets a day you finish your prescription you feel a little something's wrong so you go back to your doctor you say I really need another 60 days please but the doctor is not allowed to to prescribe more you can prescribe this stuff for a broken shoulder broken knee so on and so forth but you can't prescribe it for someone who's addicted that'll end the doctor in jail so what do you do at that point I'm gonna jump the gun here in the slides what do you do at that point well you can go cold turkey and just not take anything that's very very difficult to do the what withdrawal symptoms from opioids is rather severe and is known to even cause death so that's not a great option another option is you could go into drug rehab 30 days out of work very expensive tens of thousands of dollars for 30 days of drug rehab treatment and very often it doesn't work or only works for a very short period of time so that's not a great option either and the third option is to go on the streets in the underground economy and buy oxy cotton and Vicodin in the black market they're readily available in the black market the problem is is that they're very expensive you can easily see a price of $25 a pill for oxy cotton or Vicodin so that's economically speaking not very viable certainly over the long run a typical person is going to exhaust their savings and their income within a matter of weeks doing that option so this is why people transition to heroin because heroin is almost always much cheaper than the oxy cotton in the Vicodin so that oxy cotton and Vicodin you might find it for $10 a dose you might find it for $25 $30 a dose if you buy a sufficiently large amount of heroin you get the doses for as little as $3.50 so you find in modern America in places like Maine and West Virginia and Ohio all around the United States with normal people who have normal professions but are injury prone and would never ever ever consider the idea of taking heroin taking heroin and then so 80 percent of heroin users in modern America start with prescriptions so these are relatively normal Americans who had no idea what was happening to them that's changed somewhat in more recent years but a lot of this was people were completely oblivious to it both the doctors and the patients okay and the number of overdoses has increased dramatically after those numbers that you saw and the first couple of slides in so in 2017 they think that the number is going to be as much as 50 percent higher than the 2016 statistics and there's a reason for that I mean it's almost something that you can anticipate and now it's estimated that we have two and a half million opioid addicts in the United States I just want to mention the pain epidemic because in my research on this I was quite startled that we have this epidemic of pain in the United States in Europe 2003 study looking at 13 different studies found that chronic pain afflicted anywhere from 10 to 55 percent of adults in European countries 2006 study 15 European countries in Israel the average amount of chronic pain amongst adult almost 20 percent 2011 chronic pain in estimated to be 116 million Americans had chronic pain at some time during I think it was 2010 suggesting chronic pain at some point in the year to be 50 percent of adults and I looked on Google in 2016 for chronic pain there were 46 million hits last year there was 163 million hits and so far this year there's 52 million hits in 2017 the number goes up significantly because of the President's Commission on the opioid epidemic resulted in a lot of media coverage of this story so what's causing all this pain I'm not sure but it's out there the face of heroin addicts is obviously changed as well in the 60s and 70s it was the young inner-city person mostly minorities as well as a large number of Vietnam vets and so this was a group that most of American society didn't really care about they didn't care if they died they didn't care if they overdosed they didn't care if they went to jail they were on the fringes of society later the demographics change but the numbers are still really low for heroin addiction in the United States but it it turns out that there are older African-American men start to dominate the picture but it's mostly it remains minority males today the fastest growing proportion of opioid addicts and heroin addicts the population is more much more female much more older and middle-income middle-class and white and this is where the epidemic comes in the numbers are much larger and it's much more mainstream in today's America so if you read about this issue in the media you'll find people saying that it's the supply side it's the drug cartels that the smugglers and the dealers it's their fault other people will say no it's just bad people drug addicts weak people and so forth and also you'll see the appearance sometimes of the gateway theory of drugs where if you smoke a marijuana joint you'll very quickly end up overdosing on heroin and I actually I was invited to the Oxford Union debate and at Oxford University and the topic was should we end the war on drugs and we you know both sides have teams of players and the other side the second person in charge of drug policy in over there said exactly that he said if we if we allow people to smoke marijuana very quickly the entire population will be addicted to heroin that's almost verbatim from what he said and some people actually believed what he said but most people in the audience laughed of course a lot of people blame the free market here I never really could make any headway understanding that and then another one is China and fentanyl there there's a large amounts of industrially produced synthetic opioids in the form of fentanyl which is anywhere from a hundred to five hundred times more potent than base heroin itself and most people agree to all these things that yes it's got to be dealers have got to be involved and it's got to be weak people in the free market and China China China's to blame for everything these are all the reasons that are seen Bastiat's Frederick Bastiat's the scene and the unseen these are all the things that Bastiat would say those are the things that are easily seen those are direct causes but what's really going on here most of these people in various print formats argue for more prohibition more government intervention some argue for more treatment but basically use a stronger arm of government intervention to solve the issue the real reason here is that of course heroin and these drugs are addictive they really we've known that for over a hundred and about 120 years government intervention the economy this is also a problem government intervention hurts people it destroys them economically and so forth that's certainly part of the original problem the law of prohibition over the gateway theory of drugs basically the law of prohibition is what I did in my dissertation and it shows that the more they try to stop drugs the more potent and dangerous drugs become and therefore the drugs become more addictive more dangerous and more deadly so this is also part of the problem of the war on drugs but the real problem the real reason for the epidemic is that drug companies and the medical establishment changed prescription writing guidelines for opiates okay so heroin is addictive we've known that for a long time bear pharmaceuticals took it off the market and it was made illegal in 1914 government intervention again this is part of the traditional problem not the epidemic so much but war is a big cause of addiction the waves of addiction coincide directly after war such as the civil war the vietnam war the current situations in afghanistan and in iraq so that's a problem in government intervention in the form of monopoly privilege also has a hand in the traditional problem it takes away opportunities from people and suppresses their income and then the government gives them welfare so they become dependents of the state they can't work or they'll lose their welfare and if they did find a job it would be very poorly paying and i'll explain that briefly so but the result is dysfunctional people in need of relief and escape monopoly privileges which are pervasive throughout our economy restricts supply at increased price so it restricts the number of lawyers the number of doctors the number of producers the number of nurses so the professions are all monopolized to one extent or another uh restricting supply increasing prices but reducing job opportunities and therefore labor has to move into jobs without monopoly privileges so you're trying to squeeze yourself you wanted to be a doctor and help people but you couldn't pass the test so you end up in some other profession that is loaded with labor and so the wages are suppressed in the competitive sector of the economy so if you're a waiter a waitress or something like that you've got no monopoly privileges it's a cutthroat job and incomes in some of those areas are suppressed uh greatly so um so not not only do these unfortunate people have lower wages but they have to pay the monopoly prices to the people who have the monopolies so your wages are suppressed and your prices are waged you're being exploited by the state you're being impoverished and it of course depresses people um so labor at the margin is a pretty bad situation the iron law of prohibition you can read this in in my book about the economics of prohibition it's pretty inexpensive and it's it's small too so what i found was based on this iron law of prohibition um alcohol and drugs that are prohibited in black markets they're produced in much more concentrated form so when i started the research on my dissertation i wrote to the government and asked for a report where they monitor marijuana potency over in Mississippi and so i got the report 1972 the potency of marijuana is 0.4 of one percent in 1984 the last year in that report um it was 4.4 or roughly 10 times more potent it's now much more potent than that and then of course most of the drug market is transitioned into much more dangerous drugs cocaine heroin methamphetamines fentanyl and all sorts of other stuff have crept into the marketplace i in revising my dissertation to get ready to submit it i wrote back to those people in in mississippi and i said could you please send me an updated report they said where did you get that report i said you guys send it to me and and the lady on the other end of the line said well you're not supposed to have it i said well i'll send it back to you which i didn't so it as in its enforcement efforts intensify suppliers will switch to more powerful and concentrated substitutes uh so we see the example from marijuana to cocaine in the 1980s when they crack down on marijuana all of a sudden cocaine started flowing in and then of course later on the return of heroin methamphetamines and so forth this also explains the so-called gateway theory remember the idea that if you try marijuana you're going to end up on heroin well in a sense america was smoking marijuana several million people were smoking marijuana and now we're ended up with what the gateway theory predicts but was only explained really by the iron law of prohibition so this is what i've already explained basically why people get to the state of consuming heroin non-legal opiates you start out with a lot of pills that you get cut off and what do you do well this is the part where i skipped ahead cold turkey bad choice drug treatment program expensive it doesn't work very often and also even if it does work say you went in 30 days and you come out clean you stay clean for a long time if for whatever reason you go back and you go back to your old dose that's where a lot of the deaths occur because you've lost your tolerance to the drug and so if you go back at that same level chances are you're going to fall asleep and never wake up again like david gordon right there oh he did wake up go back to sleep so again the black market seems to be the only easy choice uh you here's where you get the high prices the uncertain supply and that of course is if you're a heroin addict that uncertainty is driving your life you're basically um you know you wake up and you figure out where can i get some money and where can i get some drugs and things like where can i get a job and and more normal things when can i uh apologize to my girlfriend or something like that those are not issues that drug addicts um are thinking about so we end up with a lot of people dying of non legal opiates okay and the reason we're seeing so many people die from the black market heroin actually some of the stuff is is actually pretty clean the stuff that's coming in from mexico black tar heroin it's fairly uniform uh you're not going to be injecting it you're going to be smoking it and it's of a relatively constant purity not pure and potency but most of it of course is not commercially or pharmaceutically made uh it has impurities and the powdered heroin is always unknown and highly variable in terms of its potency it could be just a few percent heroin it could be um almost pure heroin uh one of the biggest problems is that they're using fentanyl um to spike up the high you get from low potency powdered heroin and then a lot of this stuff is the fentanyl being added it's coming in in vast quantities from china um and it's you know a hundred times more potent than powdered heroin so it's it's a real killer so we're getting as of last year uh 21 000 overdose deaths per year so the um the total number of people dying from overdoses is now about 60 000 Americans per year um the vast majority of that is prescription and non-prescription opioids um but Americans are also dying from just regular prescription drugs anti anxiety medications psychoactive medications um Americans are taking so much prescription drugs um that it's not surprising giving the complications and the interactions uh of drugs and the fact that we're seeing a regular doctor a doctor on vacation a specialist and so forth uh that people are being over prescribed uh two years ago there were enough prescriptions written in general so that every man woman and child in america received on average 13 prescriptions yeah that's a real tummy tosser um so what are the available solutions the right says lock them up the left says lock them up of course neither of those work they've been trying that for decades um and it doesn't work and treatment again has a high cost and a low success rate um my solution is to legalize drugs uh including opiates and cannabis uh cannabis legalization is happening all around the united states uh it's one of the ways that addicts themselves say helps them deal with addiction and get off and reduce their pain medication and so i would definitely throw that in there it doesn't seem like it fits here but very much is um a part of the solution in terms of legalizing heroin that sounds a little dramatic as well but when you look into the addiction process and the addiction industry they know they're up against a lot of issues getting somebody off of heroin um is just one aspect of the issue these people by the time they reach some kind of professional treatment are not just addicted they're probably um at odds with their family their wife their girlfriend their boyfriend etc they probably lost their job and are marginally employable um and so they've got many more problems than just addiction and if you the experts in this area say if you can't solve the social problems that go along with the medical problem uh then it's not going to work so my suggestion is to allow doctors to prescribe maintenance heroin doses um of a pill variety and um so that the addict has as much time as necessary to get their economic and family and friend life back together again and and to do so in a way that the addict knows they're gonna they have a supply of this they know that it's not going to cost them much money so they're not worried about that the number one worry about of addicts is their addiction if they don't have to worry about this in terms of the continuity of supply and the price then they can start to work on those other problems and anecdotal evidence says that things like as people get older and into middle age they very typically drop their addiction to heroin the same is true for wealthy people people who can get pharmaceutical grade heroin on a regular basis just because they've got so much money that they can buy their way into that they also typically beat their addiction in a very rather normal fashion so legalization turns the turns the whole situation around so that the drug addicts are not worried about their addiction they can concentrate on these other problems so that's basically my approach to it where doctors can prescribe maintenance doses can meet with the patient on a regular basis test them if necessary to make sure they're not taking anything else and addicts can solve their own problems on their own in the long run at least some of them can right now we're we're just losing way too many people on a daily basis I think it's 137 Americans every day and that's 137 American families that are just about dying every day okay so the conclusions are that is that this epidemic is numerically very real and deadly and it goes much beyond those numbers because it's typically young people that are dying in large numbers or mothers and fathers with little kids that are dying so it the the death actually permeates into a number of different other people the cause here is big pharma and prohibition and I think that legalization would certainly reduce the problem of the opioid epidemic we can look at things like the decriminalization of all drugs in Portugal in 2001 and they did not have a complete social meltdown and actually most of the social indicators associated with hard drug use have actually improved in the country of Portugal since that time thank you very much we have a few minutes for questions so I'm from Appalachia hundreds of months have been specifically for the last year we had like 26 overdoses at six hours or something on one day it's a pretty close topic at home I was wondering if you looked at any like region specific factors especially like how Appalachia is still plagued by it yeah Appalachia is is definitely hard hit there's you know if you look at West Virginia and Ohio that whole area in there the number of prescriptions that have been written in those places there's a lot of pill mills and so the number of prescriptions that have been written in certain counties and the noteworthy ones are in Appalachia it's just it's just mind-boggling the numbers I gave you about 13 prescriptions per year per American well I mean it's way beyond that it's like in some counties there's like 25 prescriptions written for every man woman and child and a lot of cases these pills are diverted and resold for money so the poor people of Appalachia are not just being addicted and dying but they're trying to lift themselves up a little bit by reselling these prescription drugs which are slightly less dangerous but it's definitely you know it's like the southwest people are using this black tar heroin from Mexico it's less deadly but you know in places like New Hampshire uh the number of victims uh you know in just places that you just typically do not associate with heroin addiction at all um are a lot of big time anomalies how much of this do you think is just bad incentives by big farmer and how much is it dedicated and organized genocide by the government I think in in this case I like like the way you're thinking there and there's enough blame to go around but I would say it's it's the pharmaceutical companies that are driving this there's three main ones that are involved but I think all of them have an opioid pill in their roster but they're making billions I mean they're they're making just unbelievable amounts of money they're rigging the system just like a lot of the pharmacy industry is being rigged where one person buys a drug and then raises the price from five dollars to five thousand dollars there's all sorts of crazy nonsense going in on in the pharmaceutical industry um and a lot of that has to do with the fact that we give them monopolies for the pills we extend the monopolies longer than they should be and uh I'm trying to think there's there's one oh yeah and then the insurance companies Medicaid Medicare insurance companies are picking up the bill on this uh and so the people who get the prescription I got a ten dollar copay I go to the pharmacy pick it up they don't even look at it Medicaid Part D which provides cheap prescriptions for senior citizens is hemorrhaging money because of the number of seniors who are out there getting multiples prescriptions and dying if they take it the chances of dying increase or sometimes they're just getting the pills to resell to enhance their income yeah in portugal they they legal they decriminalized all drugs and uh the government didn't know what to do so they appointed a commission of doctors and just um upstanding citizens and they came to that conclusion so they were given the authority to do it and it provided cover for the politicians and uh you know everybody said the portugal is gonna crack off and go into the Atlantic Ocean um but basically if you get caught with hard drugs in portugal uh they'll might give you a citation they might require you to go to see a counselor or a social worker or an addiction counselor uh but there's no monetary penalty there's no jail time and as a result we've seen improvements in things like transmission of hiv through dirty needles you know just things like that overdose deaths um muggings you know that where addicts would mug people to get money for their for their drugs but it's still illegal and they still put dealers in jail there but it's been uh a nice result the un monitoring uh arm you know their bureaucracy to monitor the drug problem is in lisbon portugal and they want they want to do the same thing worldwide except i think they one point they realize that might put them out of a job um and um but it's been a marginal success yes sir um so perhaps not with Medicare and Medicaid but don't uh regular insurance companies have some incentive to can they issue their own guidelines like we're not going to pay for opioids less i mean our guidelines up like there can't be good for them i assume if all these people i think i think um some plans uh do that sort of thing i don't know if they do it in connection with this but i think like kaiser you know where they where they're managing your whole health uh and they're putting restrictions on what you can and cannot get um they definitely do things like uh requiring you to take one medication before they're willing to pay for the much more expensive version so i would assume that they're that they could and probably would be thinking along those lines i was gonna ask how would this undermine the like i guess the black market of the drugs coming in into the u.s or that there were not maybe any for like drug enforcement agencies and things of that nature yeah we're starting to see some changes already the legalization efforts in places like colorado and washington for marijuana um mexican farmers who used to grow marijuana now find it it's not profitable to do so so they're going back raising things like corn and you know other crops uh because marijuana is not as profitable and potentially could get them in trouble as well so this can have penetrating uh impacts across society we're already seeing things like in the cannabis legalization states uh fewer prescriptions for anti anxiety and psychoactive drugs and all sorts of things and fewer overdoses uh so we're making improvements marginally but this problem is still steam roaming along because we have so many addicts now that if we cut back on them and we don't properly treat them they're going to go and get these black market drugs inevitably they're going to get something with fentanyl in it and that creates the possibility of overdose last one i don't really know about them but the idea of providing free needles or at least allowing the sale of needles has done a large amount of good one study broke down countries that were absolutely prohibitive needles and then others that provided free needles and others that put restrictions and you had to pay for them and there's no question that the places where you can access clean needles or your given free clean needles has greatly reduced the amount of blood transmission type diseases like hiv there's six or seven of them that really are horrible for people and so the results have been worldwide they've been uniformly good in the countries where they simply do not allow anyone to sell clean needles those are also the places the highest rate of hiv transmission okay so that's great thank you very much i'll get you a question