(Bloomberg) -- Almost everyone, from President Donald Trump on down, agrees that Americans are getting gouged when they buy the kinds of drugs you can find at CVS or Walgreens.
They pay a high price for other drugs too. That’s one finding of the latest Bloomberg Global Vice Index, an annual tracker of the cost of drugs that may be illegal.
Americans would need to shell out $846 for a “basket of vice’’ made up of four generic groups of drugs: opioids, cocaine, cannabis and amphetamine-type stimulants. It’s the third-highest price in the world, behind only New Zealand and Australia – and up more than 40 percent from a year earlier.
For the complete vice index and details of its components, click HERE.
The vice gauge is purely an economic indicator, not a judgment about morality or legality. Marijuana, cocaine and heroin are permitted for recreational or medical use in various formats and jurisdictions, while inside the U.S. the debate on drugs is shifting. Several states have been easing curbs on cannabis, while there’s a mobilization at all levels against the abuse of legal prescription opioids, which have killed tens of thousands of Americans.
The gauge also measures the share of average incomes (based on International Monetary Fund data) that’s needed to maintain a weekly habit. In the U.S., for example, the figure is 70 percent, almost double the level of neighboring Canada, where the basket costs a bit more than $300, about the same as halfway around the world in Hong Kong.
Luxembourg repeated as the most affordable nation to get high, while the Netherlands jumped a few places to rank No. 2. In the former case, that’s because Luxembourgers are rich – with annual earnings above $100,000 -- and in the latter, because drugs are cheap. The Dutch basket costs just $93, well below the going rate in most developed economies.
The Netherlands is a key exporter too. “With the amount of illicit drug trafficking on the dark net increasing, a considerable number of vendors reportedly operate from the Netherlands,’’ the European Monitoring Center for Drugs and Drug Addiction said in its 2018 report.
Bloomberg’s 2019 Index has been streamlined from previous editions, which included cigarettes and alcohol. A look-back measure for the same products was made for comparison. Because so much of the trade in the remaining items happens in the dark, data collection is difficult and surveys tend to suffer from a time lag. Some price changes also have more to do with fluctuations in currencies than in the street price of illicit drugs.
One place where that price is indisputably high is in the Antipodes. Australia’s world-beating price tag was $1,263, or 116 percent of the weekly pay, up from 91 percent a year ago, mostly reflecting a hike in opioids. In New Zealand, the cost of a habit also exceeds a week’s income.
Australians spent $13.5 billion ($9.7 billion) on illicit drugs in the year through August 2017, the central bank estimates, with methamphetamine and cannabis accounting for more than 70 percent of purchases. The figure comes from a study of how the country’s banknotes circulate: it estimated that almost 2 percent of them are used in illegal drug deals.
At the other end of the price scale are countries like Laos, the Dominican Republic and Costa Rica, that are close to key production centers or smuggling routes. The Costa Rica Star newspaper reported in December that a kilogram of cocaine sells for about $8,000, compared with $35,000 in the U.S. and $60,000 in parts of Europe.
A gram of cocaine, stripped of the salts or paste it’s often mixed with, is one of the four components of Bloomberg’s basket. The others are a gram of amphetamine-type stimulants, such as methamphetamine or ecstasy; a gram of cannabis products such as marijuana herb or hashish resin; and a gram of opioids such as heroin or opium.
The basket’s price rose year-on-year in slightly more than half of the countries in the index. The U.S. recorded one of the biggest jumps, with the bulk of the increase coming from cocaine and opioids -- classes of drugs that accounted for almost 70 percent of the more than 70,000 fatal overdoses recorded in the country in 2017.
The role of painkillers such as OxyContin in the epidemic has come under close scrutiny. Its street price per pill is about 10 times the prescription price, according to a report sponsored by the Delphi Behavioral Health Group, a Florida-based company that manages addiction treatment centers. The markup on Percocet is about two-to-one.
"It’s too much use of opioids which is driving this incredible crisis," David Ricks, chairman of Eli Lilly & Co. and president of the Geneva-based International Federation of Pharmaceutical Manufacturers & Associations, told the J.P. Morgan Health Care Conference in 2018.
The problem is a global one. “There has been an increase in the non-medical use of prescription drugs (either diverted from licit channels or illicitly manufactured),’’ the United Nations said in its 2018 World Drug Report, one of Bloomberg’s main data sources for the index.
For the complete vice index and details of its components, click HERE.Here are the 50 markets that ranked most affordable:
--With assistance from Alex Tanzi.
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