The Bad Economics of Pseudoephedrine Interdiction

We’ve been watching Breaking Bad (you know … the show about the high school teacher who makes meth).

I’ve also used a lot of sinus tablets over the last 30 years — a dozen or two a week until I moved out of the northeast over twenty years ago.

Being selfish, I view contemporary restrictions on sales of pseudoephedrine products as a big imposition.

But watching Breaking Bad got me to go and look up some numbers.

• Current law is that you can’t buy more than 3.6 grams of pseudoephedrine per day.
• Illicit lab conversion rates are 50-75%, so this yields 1.8-2.7 grams of meth.
• The street value of meth is $80 per gram, so 3.6 grams of pseudoephedrine yields a street value of $144 to $216.

But, at 30 mg per tablet, this is 120 tablets.

I don’t know about you, but my retailer won’t let me buy that much anyway. I think I can get 48 tablets in a package each day, with a street value of $60-90.

Duh … gee Davey … do you think we’ll have a problem if we retail something with a $60-90 value for $6-9?

Now that I’ve run the numbers, I have a better understanding of what the problem is.

And, you know what? When I have a sinus problem, I’d willingly pay $2 per tablet to make it go away (I already pay more than that, out-of-pocket, for a migraine medication that is covered by insurance).

Supposedly, there is marketing from big pharma behind the low retail price of pseudoephedrine products.

Of course, the response of a retailer like Wal-Mart is to increase the price of pseudoephedrine with non-monetary pressure: the OTC wait, the quantity limit, the ID showing, the separate purchase you have to make, and so on.

I’d prefer less command-and-control, and more market action.

So, as an economist, what I’d like to see is a big retailer like Wal-Mart jack up the price of to $2 per tablet. I think Wal-Mart is big enough to make that happen.

Technorati Tags: meth,pseudoephedrine,sudafed

Comments

[August]

Keep track of how much you buy in a year. I think I've heard of someone getting arrested for buying more than is legal despite the rigamarole. He wasn't making meth, just buying it like a docile little citizen when he needed it for his sinuses, but went over because he never kept track and went to different stores.

[Dave Tufte]

Thanks for the advice.

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dear we need thorough informaion about this product (Pseudo-Ephedrine) like price per kg, and your discount when we demand in huge amount, made by which country?

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