Research Highlights Podcast
December 3, 2025
Targeted supply-side enforcement in the controlled substance market
Adam Soliman discusses the effects of crackdowns on prescription opioids.
Source: WoodysPhotos
Between 1997 and 2011, opioid dispensing in the United States more than tripled, fueling what would become the deadliest drug epidemic in American history. This surge in the supply of opioids was concentrated among a small subset of doctors: roughly 1 percent of the doctors who prescribed opioids accounted for almost 50 percent of all domestic opioid doses prescribed.
In a paper in the American Economic Journal: Economic Policy, author Adam Soliman examined what happened when federal authorities cracked down on "rogue" doctors who overprescribed opioids.
He found that removing a single doctor from the opioid supply chain reduced county-level dispensing by 10 percent, with no negating increases in neighboring areas. Yet these interventions came with a trade-off—while overall drug mortality declined, heroin overdoses increased by 50 percent, likely as a result of existing users seeking alternatives.
Soliman recently spoke with Tyler Smith about how he untangled these complex enforcement effects and what his findings mean for combating drug epidemics that begin in the legal pharmaceutical market.
The edited highlights of that conversation are below, and the full interview can be heard using the podcast player.
Tyler Smith: Can you lay out some of the history of the opioid epidemic and what part of it you were interested in studying?
Adam Soliman: Unfortunately, the opioid epidemic has been raging since essentially 1996, when Purdue Pharma introduced OxyContin, which was a blockbuster pain medication. Since that point, we've seen a few different waves of the epidemic. One is the prescription opioid wave, from the late 1990s until 2010. And thereafter there was a transition to heroin. Then, starting around 2013 or 2014, there was a synthetic opioid wave—fentanyl is the one that most people know about. I focused on the prescription opioid market, the first wave of the opioid epidemic. It’s important because prescription opioids are a controlled substance, and the Drug Enforcement Administration (DEA) tries to reduce diversion in this space. What I mean by diversion is the movement of drugs from the legal medical system into the black market. This is important because there's a legitimate medical need for prescription opioids. But at the same time they are highly addictive, so there is concern that they’re going to enter into the black market. The DEA is trying to do this very difficult dance of enforcement in this space. Now, why is the prescription opioid market specifically interesting? It's actually really highly concentrated. About 1 percent of the doctors who prescribe prescription opioids account for nearly 50 percent of all prescription doses that are circulating at any given moment.
Smith: Then the hope is that crackdowns on these doctors who are oversupplying opioids might really be an effective supply-side intervention given how concentrated the market is?
Soliman: Potentially. In the United States, we have traditionally focused most of our efforts on trying to reduce drug abuse with supply-side interventions. But there are two things that can undo these approaches. One is something called across-market substitution, which is the possibility that when you reduce supply in one area, people might move to another supplier in another market. And the other thing that you might be concerned about, especially in controlled substance markets, is something called a cross-product substitution. Basically, if you reduce the supply of one substance, people might switch to a more harmful one. I think the main contribution of the paper is trying to understand these targeted enforcement actions in a space that we don't traditionally think of in that way.
Smith: What happened to the opioid market when the DEA cracked down on rogue doctors?
Soliman: The first thing I wanted to understand was what happens to the legal supply at the local level. What I found was that cracking down on a single doctor reduces county-level prescription opioids by about 10 percent. But what's interesting is that this decline persists across space and grows over time. Remember, we believe that the market is relatively concentrated, so there's going to be a mechanical decrease. But then the fact that it continues to grow over time suggests that cracking down on rogue doctors doesn’t just shift drug supply to another area or users to another area, but in fact might be disrupting these supply networks.
Smith: You also took a look at the behavior of pharmacies after these crackdowns. Why were you interested in the pharmacies?
Soliman: The DEA is really concerned about doctors and pharmacies because they're the source of about 80 percent of all diversion within the controlled substance market. One thing that I didn't mention earlier is that these interventions, especially during this time period, are relatively rare. There are about 200 interventions against doctors from 2006 to 2014 and about 45 for pharmacies. Just think of how many pharmacies and doctors there are in the United States. But given that the source of diversion involves both doctors and pharmacies, I wanted to understand whether they were parallel. Do the impacts look similar or different and why?
Smith: How did pharmacies behave after these crackdowns?
Soliman: Remember that with doctors there is a local decrease with no spatial displacement. I find no evidence of across-market substitution. With pharmacies, I find a local decrease in dispensing of prescription opioids, but I also find evidence that displacement in nearby counties or nearby areas actually counteracts the decrease. There's an increase in supply a little further away. This resembles a little bit more the effects of traditional drug enforcement.
Smith: What explains this difference between what happens to doctor supply versus pharmacy supply after a crackdown?
Soliman: This is where I got some great insight from former DEA officials. I think doctors and pharmacies are fundamentally different in some way. The doctor writes the prescription, has extensive medical training, and might just have generally different incentives than a pharmacy. Overprescribing doctors are considered to be lone wolves, at least according to a former DEA official I spoke to. But pharmacists appear to be part of a larger criminal network. Pharmacies might be operating more like an illicit market although I was unable to test this specifically.
What I found was that cracking down on a single doctor reduces county-level prescription opioids by about 10 percent. But what's interesting is that this decline persists across space and grows over time.
Adam Soliman
Smith: Were you able to look into what happened to opioids on black markets?
Soliman: I find that the areas in which these crackdowns led to a decline in legal supply see a relatively large increase in the price for diverted pills. I think a 30 to 40 percent increase. If you're successfully decreasing supply, you'd imagine that there would be some sort of price response. That is in the purely illicit market. All my other outcomes involve health outcomes. We don't really have great information on illicit drug use for the entire United States. So the best proxy that I have is the mortality records; it is the best measure we have for nationwide drug use. We do see heroin overdose deaths increase, unfortunately. It's suggestive that there's an across-product substitution. As you limit legal prescription opioids, you see an increase in heroin deaths.
Smith: While you find that heroin overdoses increased, you also find that overall opioid overdoses decreased. How should we interpret this finding?
Soliman: There's a large literature that looks at OxyContin and state-level policies that changed over time. Findings indicate that, on aggregate, when you reduce legal opioid supply, there's an unintended consequence that some users move over to heroin. Heroin seems to be the main outcome here, especially with what I was telling you before about the transitions of the opioid epidemic more broadly—from prescription opioids to heroin to fentanyl. At a first order, you would be concerned about heroin substitution, given that there are similar qualities between prescription opioids and heroin. But that is oftentimes focusing on existing users that are substituting from prescription opioids to heroin. But there’s another margin that you might be interested in—the flow of new users. If you're stopping the flow of prescription opioids, your hope would be that this would also stop new users entering into prescription opioid abuse. Basically the headline result is yes, unfortunately, there is heroin substitution. But for each additional heroin overdose death, I find two fewer prescription opioid overdose deaths.
Smith: What do you think is the optimal mix of the supply-side and demand-side interventions in the midst of a drug epidemic?
Soliman: These targeted crackdowns appear to be effective at both reducing diversion, which is the DEA’s main concern, and reducing net mortality. But there is a trade-off, exactly as you're saying, that reducing access for some can push existing users into the illicit market, namely heroin. But the crackdowns do seem to be limiting the number of new user entering the pipeline. The reality is, in the United States, we rely on a supply-side heavy approach, especially during the period I studied. I think your question is spot on, and I think I would want future research to focus on determining the optimal mix of enforcement and treatment. The reality is we haven't really invested a ton in treatment. But that is changing as this epidemic has continued to rage over time. I think there is a lot of space to think through the best long-term strategy. That could involve integrating targeted crackdowns with expanded treatment access. The average net benefit per crackdown for a given county is really large, almost $30 million. So even though there's this unintended consequence, it does appear, on net, that these interventions are quite effective.
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“Disrupting Drug Markets: The Effects of Crackdowns on Rogue Opioid Suppliers” appears in the November 2025 issue of the American Economic Journal: Economic Policy. Music in the audio is by Podington Bear.