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.
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.