of drugs and, thereby, to reduce consumption. Existing price information is collected by the Drug Enforcement Administration and other law enforcement agencies for operational purposes and does not provide reliable indicators of retail price movements in actual drug markets. Nor does it provide an adequate foundation for analysis of the causes and consequences of price changes.
For example, there is a broad consensus that current enforcement policy has increased drug prices relative to what they would be otherwise. However, the country does not know the magnitude of this increase, which aspects of current policy have had this effect, the amount by which it has decreased consumption, or which consumers have been most affected. Similarly, the nation is poorly informed about trends in the prices of illegal drugs, short-run fluctuations in prices, and the effects on prices of law enforcement operations and other policy interventions. All of these questions must be answered if the United States is to judge the effectiveness of its drug control policies or develop policies of greater effectiveness.
The committee recommends that work be started to develop methods for improving existing data and acquiring more reliable drug price data. Until accurate price data are constructed, the nation will be poorly informed about long-term trends and short-term fluctuations in prices of illegal drugs, about the magnitude of expenditures on illegal drugs, and about the efficacy of interventions. In the committee’s view, planning activities for better data and research on drug consumption and drug prices could be begun immediately and implemented as soon as a suitable infrastructure and level of funding is in place.
Improved consumption and price data alone will not suffice to strengthen the country’s understanding of drug enforcement policy. New empirical research will also be required. Inquiry into supply reduction aspects of enforcement policy has used two methodologies: impulse-response analysis, which strings together events to connect a hypothesized cause (the impulse) to the suspected effect (the response), and systems research, which develops a formal model of a complex system and then applies the model to predict outcomes.
The committee concludes that the complex dynamics connecting enforcement to domestic drug prices, compounded by the severe limitations of existing data, creates difficult obstacles for the successful use of impulse-response analysis to measure the effects of supply-reduction policies. Even if, as the committee hopes, adequate data should be obtained, the multiplicity of events that affect drug prices, coupled with other forces that affect the time path from a given enforcement action to a response in drug price, makes this type of analysis untenable except in very tightly controlled circumstances.