Do Crackdowns on Rogue Doctors Reduce Prescription Opioid Use and Overdose Deaths?

This study examines whether DEA crackdowns on rogue opioid-prescribing doctors reduce prescription opioid use and affect overdose mortality. Using administrative data on over 100 billion opioid pills dispensed from 2006 to 2014, combined with DEA enforcement records and mortality data from the CDC, the author finds that cracking down on a single doctor reduces county-level opioid dispensing by 9.8%—about 4 pills per person annually. Black-market prices rise by 38%, indicating demand suppression. Heroin overdose deaths increase by 0.37 per 100,000, but overall overdose mortality declines. The findings suggest targeted enforcement reduces new opioid initiation despite substitution risks.

Full Citation and Link to Article

Soliman, A. (2025). Disrupting drug markets: The effects of crackdowns on rogue opioid suppliers. American Economic Journal: Applied Economics (forthcoming). https://doi.org/10.1257/app.20220298

Extended Summary

Central Research Question

The central question addressed in this article is whether targeted enforcement actions—specifically, DEA crackdowns on doctors who unlawfully prescribe opioids—reduce the legal supply of prescription opioids and improve public health outcomes. The author examines whether these interventions reduce opioid dispensing, whether they cause users to substitute across markets or to more dangerous drugs like heroin, and whether they ultimately decrease or exacerbate overdose mortality. This research provides crucial insights into the efficacy and trade-offs of enforcement-based supply-side policies during the opioid epidemic.

Previous Literature

Prior studies on drug policy enforcement have shown mixed results. Many analyses of supply-side interventions, particularly in illicit drug markets, find that crackdowns lead to displacement effects—shifting illegal activity geographically or across substances—without reducing overall drug abuse. Key works include Caulkins and Reuter (2010), Dobkin and Nicosia (2009), and Castillo et al. (2020), which explore the dynamics of supply restriction and substitution in illegal drug markets.

Within the context of the opioid crisis, research has largely focused on state-level policies like Prescription Drug Monitoring Programs (PDMPs), OxyContin reformulation, and broader federal enforcement initiatives (e.g., Meinhofer, 2016; Alpert et al., 2018). While these studies document reduced opioid supply and some increases in heroin use, they often examine aggregate effects and lack granular enforcement data.

This paper contributes to the literature by studying individual-level DEA actions against doctors and pharmacies, allowing for more precise identification of cause-and-effect relationships. It also improves upon prior research by directly measuring both the immediate legal supply effects and the longer-term consequences on mortality and black-market activity.

Data

The author constructs a novel dataset combining four key sources:

1. DEA Administrative Actions: Orders to Show Cause (OTSCs) proposing the revocation of DEA licenses from doctors or pharmacies suspected of unlawful prescribing, drawn from the Federal Register (2006–2014).

2. ARCOS Database: Detailed records of over 180 million controlled substance transactions (particularly hydrocodone and oxycodone), including quantities, dates, and locations.

3. CDC Mortality Data: Restricted-use Multiple Cause of Death files identifying overdose deaths by substance, age, gender, and race.

4. StreetRx Black-Market Price Data: Crowdsourced reports of illicit opioid pill prices, used to infer changes in demand and supply dynamics.

By merging these datasets at the county and pharmacy levels, the study analyzes the effects of crackdowns on legal dispensing patterns, substitution to heroin, overdose mortality, and black-market pricing. Additional robustness checks draw on suspicious ordering patterns and DEA audit records to improve causal inference.

Methods

The primary analytical framework is a difference-in-differences (DiD) design, comparing counties that experience a DEA crackdown to similar counties that do not, both before and after the enforcement action. The main treatment variable is the issuance of an OTSC, which marks the formal beginning of a DEA administrative crackdown on a medical provider. The author uses county- and pharmacy-level event studies, fixed effects, and synthetic control methods to estimate dynamic and average treatment effects over time.

Three main channels of response are analyzed:

1. Quantity demanded: How prescription opioid dispensing changes after a crackdown.

2. Across-market substitution: Whether users shift to neighboring markets or other providers.

3. Across-product substitution: Whether users switch to heroin or other non-prescription opioids.

The study also examines heterogeneous effects by race, gender, and age, as well as displacement effects in pharmacy crackdowns versus doctor crackdowns.

Findings/Size Effects

The study finds that doctor crackdowns significantly reduce opioid supply, with persistent declines in dispensing and minimal evidence of market displacement.

1. Reduction in Prescription Opioid Dispensing

   
   

   • Cracking down on a single doctor leads to a 9.8% reduction in county-level opioid dispensing (about 4 pills per person annually).

   • The effect grows over time, reaching a 12% decline after three years.

   • At the pharmacy level, dispensing decreases by 17% within 10 miles of a crackdown.

   
   

2. Price Effects in Illicit Markets

   
   

   • Black-market prices for opioid pills increase by 38%, suggesting constrained supply and an elasticity of demand of approximately -0.26.

   • This supports the claim that crackdowns significantly disrupt supply and increase scarcity.

   
   

3. Across-Market Substitution

   
   

   • No significant increase in opioid dispensing is found in nearby areas, indicating limited geographic displacement following doctor crackdowns.

   • However, pharmacy crackdowns do lead to displacement, with smaller independent pharmacies increasing dispensing in surrounding areas, possibly as part of criminal networks.

   
   

4. Across-Product Substitution (Heroin Use)

   
   

   • Heroin overdose deaths increase by 0.37 per 100,000 residents (a 50% rise), indicating some substitution from prescription opioids to heroin.

   • This substitution is concentrated among white males, particularly in younger age groups.

   
   

5. Net Mortality Effects

   
   

   • Despite the rise in heroin deaths, overall overdose mortality declines.

   • For each additional heroin death, there are two fewer non-heroin opioid overdose deaths.

   • Total drug overdose deaths fall by 0.83 per 100,000, and non-opioid drug deaths decline by 46%.

   
   

6. Demographic Effects

   
   

   • Mortality declines by 13–17% for young and prime-aged males.

   • Effects are smaller and less significant for women.

   • All racial groups see mortality declines, though these are not statistically significant.

   
   

7. Suicide Effects

   
   

   • A small increase in suicides (8.3%) is observed, suggesting that enforcement may negatively affect some individuals with limited treatment access.

   • This result is not robust across all specifications and should be interpreted with caution.

   
   

8. Pharmacy Crackdowns

   
   

   • While pharmacy crackdowns also reduce local opioid dispensing, they lead to significant geographic displacement and increases in suspicious pharmacy activity in surrounding areas.

   • Several small pharmacies begin ordering large quantities of opioids shortly after a crackdown on another in the same market.

Conclusion

This study provides strong evidence that targeted crackdowns on rogue doctors significantly reduce the supply of prescription opioids and net overdose mortality, despite some substitution to heroin. The results show that focusing enforcement efforts on high-volume, noncompliant prescribers can disrupt both legal and illicit drug markets and potentially prevent the initiation of new users. Unlike broad supply restrictions, which can harm legitimate patients, this approach appears more targeted and effective.

However, there are trade-offs. Some individuals switch to heroin, and suicides may increase in contexts where treatment access is lacking. The study suggests the importance of combining enforcement with harm-reduction strategies and treatment options to mitigate these side effects.

Additionally, enforcement against pharmacies is less effective due to displacement effects, indicating that crackdowns may need to be more coordinated or followed by monitoring of surrounding actors.

Overall, the findings support supply-side interventions when they are narrowly focused, data-driven, and accompanied by complementary demand-side strategies. They offer a nuanced view of how individual enforcement actions reverberate through legal, black-market, and health systems during an ongoing drug epidemic.