The Fentanyl Threat – USA Gov Policy

One of the lesser reported stories has been the extraordinary push by the White House to respond to the opioid crisis.

When President Trump took office in 2016, opioid overdoses accounted for over 42,000 deaths, out of a total of 64,000 who died from all forms of drug overdoses. In that year, two million Americans had an addiction to prescription and illegal opioids. Deaths from synthetic opioids increased by 72% from 2014 to 2016, caused a daily death total of 175 per day. It has been estimated that over two million Americans suffered from related addiction. Over 300,000 overdose deaths have occurred since 2000.

In 2015, the Drug Enforcement Administration and CDC issued nationwide alerts identifying illicitly manufactured fentanyl (IMF) as a threat. Beginning in 2013, the distribution of IMF increased to unprecedented levels. Individual states have reported increases in fentanyl-involved overdose deaths (fentanyl deaths). During 2013–2014, the number of drug products obtained by law enforcement that tested positive for fentanyl (fentanyl submissions) increased by 426%, and synthetic opioid–involved overdose deaths (excluding methadone) increased by 79% in the United States. Changes in synthetic opioid–involved overdose deaths among 27 states were highly correlated with fentanyl submissions but not correlated with fentanyl prescribing. Eight high-burden states were identified, and complementary data indicate increases in these states are primarily attributable to fentanyl, supporting the argument that IMF is driving increases in fentanyl deaths.

A Heritage Foundation study describes the allure and danger of fentanyl:

“The amount of fentanyl necessary to produce its painkilling effect is so small that manufacturers can ship it in ordinary packages such as envelopes used for ordinary letters. Cheap production isn’t the only economic benefit suppliers have on their side. Fentanyl is said to produce a better high and be more addictive and potent than heroin (50 to 100 times more powerful). This poison isn’t affecting only addicts. In some cases, first responders have inhaled airborne fentanyl, resulting in a contact overdose.”

The Washington Post called this dilemma the “Obama Fentanyl Failure. “The fentanyl crisis represents an extraordinary public health challenge — and requires an extraordinary public health response… experts wrote to six [Obama] administration officials, including the nation’s ‘drug czar’ and the chief of the Centers for Disease Control and Prevention. The administration considered the request but did not act on it. The decision was one in a series of missed opportunities, oversights and half-measures by federal officials who failed to grasp how quickly fentanyl was creating another — and far more fatal — wave of the opioid epidemic. In the span of a few short years, fentanyl, a synthetic painkiller 50 times more powerful than heroin, became the drug scourge of our time. Fentanyl has played a key role in reducing the overall life expectancy for Americans.”

Who, or what, caused this troubling situation, which seems to have expanded so rapidly?

Testifying before the United States Senate Caucus on International Narcotics Control Caucus last year, U.S. Customs and Immigration Enforcement (ICE) Assistant Director Mathew C. Allen stated:

“Illicit Fentanyl, Fentanyl analogies, and their chemical precursors are most often produced in China. From China, these substances are shipped primarily through mail carriers directly to the U.S., or through TCOs in Mexico, Canada, and the Caribbean. Once in the Western Hemisphere, fentanyl or its analogues are prepared and then mixed into heroin supply, pr pressed into pill form, then moved to the illicit U.S. market where dependency on prescription opioids ad heroin remains at epidemic proportions. In some cases, traffickers have shipped industrial pill pressed from China to the United States to operate fentanyl pill press mills domestically. Mexican TCOs also receive shipments of fentanyl, fentanyl analogues and their precursors directly from China. There is strong evidence that large shipments of fentanyl move from China to Mexico and the shipments are not opened until they are within the United States. Mexican cartels have seized upon this business opportunity because the profit potential of synthetic opiods and have invested in growing their share of the market. Because of its low dosage range and potency, one kilogram of fentanyl purchased in China for $3,000-$5,000 can generate upwards of $1.5 million in revenue on the illicit market…”

In October of 2017, the new White House declared the opioid crisis a “public health emergency.” The declaration was designed to expand access to telemedicine services; appoint specialists; and shift some resources from HIV/AIDS programs to those dealing with substance abuse

In 2018, President Trump unveiled an “Initiative to Stop Opioid Abuse.” The measure involved:

As of October 2018, securing $6 billion in new funding over a two-year window to fight opioid abuse.
To curb over-prescription, implementing a Safer Prescribing Plan designed to cut opioid prescription fills by one-third within three years.
Increasing security at land borders, ports of entry, and waterways.
Passing the SUPPORT Act, the largest legislative package addressing a single drug crisis in history.

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The White House notes that the number of first-time heroin users ages 12 and older fell by more than 50 percent in July 2017. Between President Trump’s Inauguration and October 2018, high-dose opioid prescriptions fell by 16 percent. In July 2017, the Department of Justice shut down the country’s biggest Darknet distributor of drugs. That same Fiscal Year, U.S. Immigration and Customs Enforcement took more than 2,300 pounds of fentanyl off the streets. In terms of helping those struggling with addiction, there has been a 20 percent increase in young adults receiving outpatient treatment. And in 2017, America had an increase in the number of patients age 12 and older with illicit drug-use disorders being treated at specialty facilities and private provider offices.

On January 10, 2018, President Trump signed into law the “Interdict Bill,”

The measure authorizes $9 million to purchase enhanced tools and hire more personnel to deal with the crisis; provides additional chemical screening devices available to detect opioid traffic; and requires analysis and data interpretation of relevant data.

Illustration: Pixabay

Quick Analysis

Federal Reserve Report on the Economy

The Beige Book is a Federal Reserve System publication about current economic conditions across the 12 Federal Reserve Districts. It characterizes regional economic conditions and prospects based on a variety of mostly qualitative information, gathered directly from each District’s sources. The latest edition has just been released. We present key portions of the summary here. Overall Economic Activity Overall economic activity expanded slightly, on balance, since late February. Ten out of twelve Districts experienced either slight or modest economic growth—up from eight in the previous report, while the other two reported no changes in activity. Consumer spending barely increased overall, but reports were quite mixed across Districts and spending categories. Several reports mentioned weakness in discretionary spending, as consumers’ price sensitivity remained elevated. Auto spending was buoyed notably in some Districts by improved inventories and dealer incentives, but sales remained sluggish in other Districts. Tourism activity increased modestly, on average, but reports varied widely. Manufacturing activity declined slightly, as only three Districts reported growth in that sector. Contacts reported slight increases in nonfinancial services activity, on average, and bank lending was roughly flat overall. Residential construction increased a little, on average, and home sales strengthened in most Districts. In contrast, nonresidential construction was flat, and commercial real estate leasing fell slightly. The economic outlook among contacts was cautiously optimistic, on balance. Labor Markets Employment rose at a slight pace overall, with nine Districts reporting very slow to modest increases, and the remaining three Districts reporting no changes in employment. Most Districts noted increases in labor supply and in the quality of job applicants. Several Districts reported improved retention of employees, and others pointed to staff reductions at some firms. Despite the improvements in labor supply, many Districts described persistent shortages of qualified applicants for certain positions, including machinists, trades workers, and hospitality workers. Wages grew at a moderate pace in eight Districts, with the remaining four noting only slight to modest wage increases. Multiple Districts said that annual wage growth rates had recently returned to their historical averages. On balance, contacts expected that labor demand and supply would remain relatively stable, with modest further job gains and continued moderation of wage growth back to pre-pandemic levels. Prices Price increases were modest, on average, running at about the same pace as in the last report. Disruptions in the Red Sea and the collapse of Baltimore’s Key Bridge caused some shipping delays but so far did not lead to widespread price increases. Movements in raw materials prices were mixed, but six Districts noted moderate increases in energy prices. Contacts in several Districts reported sharp increases in insurance rates, for both businesses and homeowners. Another frequent comment was that firms’ ability to pass cost increases on to consumers had weakened considerably in recent months, resulting in smaller profit margins. Inflation also caused strain at nonprofit entities, resulting in service reductions in some cases. On balance, contacts expected that inflation would hold steady at a slow pace moving forward. At the same time, contacts in a few Districts—mostly manufacturers—perceived upside risks to near-term inflation in both input prices and output prices. Highlights by Federal Reserve District Boston Business activity expanded at a modest pace in recent weeks, and prices rose slightly. Employment was flat overall, but one retailer reported significant layoffs. Convention and tourism activity grew at a robust pace. Home sales increased on a year-over-year basis, marking a turnaround. The outlook ranged from cautiously optimistic to bullish. New York On balance, regional economic activity remained flat. Labor market conditions were solid and continued to normalize as labor supply and labor demand came into better balance. Consumer spending was unchanged after a weak first quarter. Housing markets strengthened, with the spring selling season picking up beyond the seasonal norm. The pace of selling price increases remained modest. Philadelphia On balance, business activity was flat in the current Beige Book period—after declining slightly last period. Employment edged up, despite staffing and recruitment efforts slowing to a crawl. Wage and price inflation continue to moderate; however, housing affordability continues to be a concern. Overall, the outlook is positive, as firms remained optimistic about expectations for future growth. Cleveland District business activity increased modestly, as did employment. Firms anticipated greater ease filling open positions, including those that have been particularly challenging, because of increased labor availability. Wage pressures continued to normalize, and some contacts reduced starting wages for new roles. Cost and price pressures changed little. Richmond The regional economy grew at slight pace since our previous report. Consumer spending on retail goods was mixed but spending on travel and tourism was up slightly. Fifth District port activity slowed and was impacted by the collapse of the Francis Scott Key Bridge. Employment growth slowed from a moderate to a modest rate in recent weeks, but wages continued to grow moderately. Price growth also remained moderate. Atlanta The Sixth District economy grew modestly. Labor markets continued to stabilize; wage pressures eased. Many nonlabor costs moderated. Retail sales were steady, but consumers remained price conscious. Tourism remained robust. Commercial real estate conditions slowed. Transportation activity was mixed. Manufacturing grew slightly. Loan demand was flat. Energy activity improved. Chicago Economic activity increased slightly. Employment increased modestly; business and consumer spending rose slightly; nonbusiness contacts saw no change in activity; and manufacturing and construction and real estate activity were flat. Prices and wages rose moderately, while financial conditions were stable. Prospects for 2024 farm income were unchanged. St. Louis Economic activity has continued to increase slightly since our previous report. Prices have increased modestly, as contacts are broadly feeling the pressures of increases in both labor and non-labor costs. The outlook was neutral to slightly optimistic, which is generally unchanged from our previous report, but better than one year ago. Minneapolis District economic activity grew slightly. Employment grew some, but labor demand was softer. Wage pressures were present but continued to ease, while price pressures ticked up. Consumer spending was mostly flat, and manufacturing slowed modestly. Commercial and residential construction improved […]