Economics of Drug Policy and the Drug War

81. Drug Control Models

"In the most common English usage decriminalisation is the elimination of a conduct or activity from the sphere of criminal law, while depenalisation is simply the relaxation of the penal sanction provided for by law. The term decriminalisation is most commonly used in reference to offences related to drug consumption and usually manifested by the imposition of sanctions of a different kind (administrative) or the abolition of all sanctions; other (non-criminal) laws can then regulate the conduct or activity that has been decriminalised. Depenalisation can refer to consumption-related offences (which may be dealt with through referral schemes or alternative sanctions for drug users) but also to small-scale trading, generally indicating elimination or reduction of custodial penalties, although the conduct or activity remains a criminal offence. Confusingly, in Spanish, depenalisation often refers to what in English is most often called decriminalisation. Legalisation is the removal from the sphere of criminal law of all drug-related offences: use, possession, cultivation, production, trading, and so on. Regulation refers to a strictly controlled legal market, in which administrative rather than criminal law regulates production, distribution and price (by taxation); and limits availability and access, using models developed for pharmaceutical drugs, alcohol and tobacco."

Jelsma, Martin, "The Development of International Drug Control: Lessons Learned and Strategic Challenges for the Future," Global Commission on Drug Policies (Rio de Janeiro, Brazil: January 2011), p. 9.

82. Drug Supply Models

"The prescription model is the most tightly controlled and enforced drug supply model currently in operation. Under this model, drugs are prescribed to a named user by a qualified and licensed medical practitioner. They are dispensed by a licensed practitioner or pharmacist from a licensed pharmacy or other designated outlet."
Pharmacy model
"The pharmacy model, whilst still working within a clearly defined medical framework, is less restrictive and controlling than the prescription model. Pharmacists are trained and licensed to dispense prescriptions, although they cannot write them. They can also sell certain generally lower risk medical drugs from behind the counter."
Licensed sales
"Current best practice in licensed sales of alcohol and tobacco offers a less restrictive, more flexible infrastructure for the licensed sales of certain lower risk non-medical drugs (see: 5.1 Alcohol, page 100, and 5.2 Tobacco, page 105). Such a system would put various combinations of regulatory controls in place to manage the vendor, the supply outlet, the product and the purchaser, as appropriate."
Licensed premises
"Public houses and bars serving alcohol offer the most common example of premises licensed for sale and consumption. Under this long established system, various controls exist over the venue and (in particular) the licensee."
Unlicensed sales
"Certain psychoactive substances deemed sufficiently low risk, such as coffee, traditional use of coca tea and some low strength painkillers, are subject to little or no licensing. Here, regulation focuses on standard product descriptions and labelling."

Transform Drug Policy Foundation, "After the War on Drugs: Blueprint for Regulation," (Bristol, United Kingdom: September 2009) pp. 20, 23, 24-27.

83. Effect of Prohibition on Drug Use

"Prohibition has two effects: on one hand it raises supplier costs, disrupts market functioning and prevents open promotion of the product; on the other, it sacrifices the authorities’ ability to tax transactions and regulate operation of the market, product characteristics and promotional activity of suppliers. The cannabis prevalence rates presented in Figure 1 show clearly that prohibition has failed to prevent widespread use of the drug and leaves open the possibility that it might be easier to control the harmful use of cannabis by regulation of a legal market than to control illicit consumption under prohibition. The contrast between the general welcome for tobacco regulation (including bans on smoking in public places) and the deep suspicion of prohibition policy on cannabis is striking and suggests that a middle course of legalised but limited consumption may find a public consensus."

"Pudney, Stephen, "Drugs Policy – What Should We Do About Cannabis?" Centre for Economic Policy Research (London, United Kingdom: April 2009), p. 23.

84. Cost/Benefit of Adult Offender Drug Treatment

"The legislature directed the Washington State Institute for Public Policy (Institute) to evaluate the costs and benefits of certain juvenile and adult criminal justice policies, violence prevention programs, and other efforts to decrease particular 'at-risk' behaviors of youth."
With regard to adult offender drug treatment programs, it found, "Generally, drug treatment for adult offenders works to lower criminal recidivism rates. The degree to which recidivism is reduced is not large—single digit, not double digit, percentage reductions in recidivism rates should be expected. Nonetheless, with treatment typically costing about $2,500 per participant, the net economics of drug treatment appear positive, on average. The programs roughly break even from a taxpayer-only perspective and, including the benefits crime victims receive when recidivism rates are reduced, the programs typically produce about three dollars in benefits per dollar of cost."

Click here for complete datatable of Benefit to Cost Ratios of Adult Drug Treatment Programs.

Aos, Steve; Phipps, Polly; Barnoski, Robert; Lieb, Roxanne, "The Comparative Costs and Benefits of Programs to Reduce Crime," Washington State Institute for Public Policy (Olympia, WA: May 2001), pp. 1, 23-26.