Opioids: Government intervention and black markets

Gilbert G. Berdine MD


The U.S. is in the midst of an opioid crisis. This crisis is partially responsible for declining life expectancy. The rising mortality in young people 25-44 is partially responsible and is being attributed to opioids. In this article, the formation of black markets in response to government regulation will be examined. We will also examine how the black market changes in character with subsidies. The subsidies available for Medicaid patients can be close to 100%. The subsidy makes it profitable for Medicaid patients to be recruited as a source of supply of opioids. The economics of opioids and their black markets will be explained on the basis of supply and demand. The conclusion is that the type of illicit behavior occurring in the U.S. was both rational and predictable based on the regulation of narcotics, monopoly pricing of certain opioids, and the availability of government subsidies to obtain these opioids.

Keywords: opioid crisis, black market, free market, Medicaid subsidy

Article citation: Berdine G. Opioids: government intervention and black markets. The Southwest Respiratory and Critical Care Chronicles 2018;6(23):28–32
From: Texas Tech University Health Sciences Center, Lubbock, Texas; Free Market Institute, Lubbock, Texas
Submitted: 3/6/2018
Accepted: 4/3/2018
Reviewer: Robert P Murphy PhD
Conflicts of interest: none
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.