When do supply-side drug control policies save lives? Evidence from pharmacy methadone restrictions.

The literature commonly finds that supply-side drug control policies are an ineffective response to drug epidemics because they cause substitution to more dangerous illicit drugs. We document a policy that was implemented in response to the intertwined methadone and prescription opioid epidemics in the U.S. in the early 2000s and that sharply contradicts this. In 2008, the U.S. Drug Enforcement Administration and drug manufacturers halted shipments of highly potent methadone formulations to all pharmacies nationwide due to concerns over their involvement in rising overdose death rates. However, rather than causing substitution to illicit drugs, we show this response caused substitution to safer methadone products and prevented roughly 1,600 overdose deaths over a two-year period. Findings underscore that supply-side drug control policies can be effective responses to drug epidemics in contexts where they are appropriately targeted to push consumers towards safer rather than more harmful substances.