Sharp reductions in costs of producing cannabis, fentanyl likely to spur widespread changes in use, dependence

The legalization of cannabis and the arrival of nonmedical fentanyl are fundamentally changing drug markets in North America. A large part of these changes relates to the ability to produce large quantities of the drugs at low costs, which has slashed wholesale prices for both drugs and retail prices for cannabis. A new analysis explores the effects of these changes on use. The analysis concludes that sharp declines in production costs for cannabis and opioids could dramatically reduce the price per dose for consumers in ways that alter patterns of use and dependence.

The analysis, by a researcher at Carnegie Mellon University (CMU), is published in the International Journal of Drug Policy.

“Historical analogies suggest that very large declines in price can have effects on use that go beyond just expanding traditional patterns of consumption,” explains Jonathan Caulkins, professor of operations research and public policy at CMU’s Heinz College, who wrote the analysis. “The overall situation with cannabis and fentanyl may look more different in 2040 compared to today — just as today looks different compared to 2000.”

Caulkins focused on the motivations for use of these drugs, factors that appear ready to change. He also considered market factors, noting that basic relationships among production costs, prices, and consumption have held up in markets over centuries. And he looked at wild cards — cultural, sociological, and political changes that could be equally influential.

Caulkins started with two key economic ideas: First, prices in competitive markets fall to match the marginal cost of production. For example, North American cannabis production costs have decreased as much as 95 percent. Second, when prices fall, consumption rises. This has occurred with cannabis, although as yet, there is no indication that fentanyl production has reduced retail opioid prices — but monitoring retail opioid prices is difficult.

Therefore, falling prices affect consumption, but the effects of precipitous declines may not be simply a larger version of the effects of modest price declines. Among other factors to consider is elasticity of demand, including how the degree of responsiveness to price changes varies from one setting to the next and from one outcome to the next. In short, for many products used widely by society (e.g., lighting and electricity, computers, cigarettes), Caulkins explains, their meaning changed when production costs fell radically.

“Liberalization of cannabis policy and reduced production costs may fundamentally change the place of cannabis in society,” Caulkins notes. Consider, for example, that cannabis operations are listed on the NASDAQ and Toronto stock exchanges, legalization has led to a wide range of products such as edibles and vaping, and advertising for the product has soared. More changes are likely, he suggests.

Significant declines in wholesale opioid prices could also have far-reaching and unexpected effects, Caulkins predicts. Among them: reducing the value of criminal organizations’ cross-border smuggling, making distribution less violent.

“We don’t know what the future holds,” he adds, “but I predict that if someone in 2040 lists the major changes in drug markets, use, and dependence that occurred since 2020, there will be items on that list that pertain to the declines in production costs brought about by cannabis legalization and the spread of synthetic opioids.”

Based on this prediction, Caulkins concludes: “It’s not too soon to invest more in monitoring markets to stay abreast of the diverse ramifications that may flow from these radical reductions in production costs.”

 

No More ICU Beds at the Main Public Hospital in the Nation’s Largest County as COVID Surges

She lay behind a glass barrier, heavily sedated, kept alive by a machine that blew oxygen into her lungs through a tube taped to her mouth and lodged at the back of her throat. She had deteriorated rapidly since arriving a short time earlier.

“Her respiratory system is failing, and her cardiovascular system is failing,” said Dr. Luis Huerta, a critical care expert in the intensive care unit. The odds of survival for the patient, who could not be identified for privacy reasons, were poor, Huerta said.

The woman, in her 60s, was among 50 patients so ill with COVID-19 that they required constant medical attention this week in ICUs at Los Angeles County+USC Medical Center, a 600-bed public hospital on L.A.’s Eastside. A large majority of them had diabetes, obesity or hypertension.

An additional 100 COVID patients, less ill at least for the moment, were in other parts of the hospital, and the numbers were growing. In the five days that ended Wednesday, eight COVID patients at the hospital died — double the number from the preceding five days.

As COVID patients have flooded into LAC+USC in recent weeks, they’ve put an immense strain on its ICU capacity and staff — especially since non-COVID patients, with gunshot wounds, drug overdoses, heart attacks and strokes, also need intensive care.

No more ICU beds were available, said Dr. Brad Spellberg, the hospital’s chief medical officer.

Similar scenes — packed wards, overworked medical staffers, harried administrators and grieving families — are playing out in hospitals across the state and the nation.

In California, only 3% of ICU beds were available as of Thursday. In the 11-county Southern California region, no ICU beds were open, and in the San Joaquin Valley, just 0.7% were.

The county of Los Angeles, the nation’s largest, was perilously close to zero capacity.

County health officials reported Wednesday that the number of daily new COVID cases, deaths and hospitalizations had all soared beyond their previous highs for the entire pandemic.

LAC+USC has had a heavy COVID burden since the beginning of the pandemic, largely because the low-income, predominantly Latino community it serves has been hit so hard. Latinos represent about 39% of California’s population but have accounted for nearly 57% of the state’s COVID cases and 48% of its COVID deaths, according to data updated this week.

Many people who live near the hospital have essential jobs and “are not able to work from home. They are going out there and exposing themselves because they have to make a living,” Spellberg said. And, he said, “they don’t live in giant houses where they can isolate themselves in a room.”

The worst cases end up lying amid a tangle of tubes and bags, in ICU rooms designed to prevent air and viral particles from flowing out into the hall. The sickest among them, like the woman described above, need machines to breathe for them. They are fed through nose tubes, their bladders draining into catheter bags, while intravenous lines deliver fluids and medications to relieve pain, keep them sedated and raise their blood pressure to a level necessary for life.

To take some pressure off the ICUs, the hospital this week opened a new “step-down” unit, for patients who are still very sick but can be managed with a slightly lower level of care. Spellberg said he hopes the unit will accommodate up to 10 patients.

Hospital staff members have also been scouring the insurance plans of patients to see if they can be transferred to other hospitals. “But at this point, it’s become almost impossible, because they’re all filling up,” Spellberg said.

Two weeks ago, a smaller percentage of COVID patients in the ER were showing signs of severe disease, which meant fewer needed to be admitted to the hospital or the ICU than during the July surge. That was helping, as Spellberg put it, to keep the water below the top of the levee.

But not anymore.

“Over the last 10 days, it is my distinct impression that the severity has worsened again, and that’s why our ICU has filled up quickly,” Spellberg said Monday.

The total number of COVID patients in the hospital, and the number in its ICUs, are now well above the peak of July — and both are nearly six times as high as in late October. “This is the worst it’s been,” Spellberg said. And it will only get worse over the coming weeks, he added, if people travel and gather with their extended families over Christmas and New Year’s as they did for Thanksgiving.

“Think New York in April. Think Italy in March,” Spellberg said. “That’s how bad things could get.”

They are already bad enough. Nurses and other medical staffers are exhausted from long months of extremely laborious patient care that is only getting more intense, said Lea Salinas, a nurse manager in one of the hospital’s ICU units. To avoid being short-staffed, she’s been asking her nurses to work overtime.

Normally, ICU nurses are assigned to two patients each shift. But one really sick COVID patient can take up virtually the entire shift — even with help from other nurses. Jonathan Magdaleno, a registered nurse in the ICU, said he might have to spend 10 hours during a 12-hour shift at the bedside of an extremely ill patient.

Even in the best case, he said, he typically has to enter a patient’s room every 30 minutes, because the bags delivering medications and fluids empty at different rates. Every time nurses or other care providers enter a patient’s room, they must put on cumbersome protective gear — then take it off when they leave.

One of the most delicate and difficult tasks is a maneuver known as “proning,” in which a patient in acute respiratory distress is flipped onto his or her stomach to improve lung function. Salinas said it can take a half-hour and require up to six nurses and a respiratory therapist, because tubes and wires have to be disconnected, then reconnected — not to mention the risks involved in moving an extremely fragile person. And they must do it twice, because every proned patient needs to be flipped back later in the day.

For some nurses, working on the COVID ward at LAC+USC feels very personal. That’s the case for Magdaleno, a native Spanish speaker who was born in Mexico City. “I grew up in this community,” he said. “Even if you don’t want to, you see your parents, you see your grandparents, you see your mom in these patients, because they speak the language.”

He planned to spend Christmas only with members of his own household and urged everyone else to do the same. “If you lose any member of your family, then what’s the purpose of Christmas?” he asked. “Is it worth it going to the mall right now? Is it worth even getting a gift for somebody who’s probably going to die?”

That the darkest hour of the pandemic should come precisely at the moment when COVID vaccines are beginning to arrive is especially poignant, said Dr. Paul Holtom, chief epidemiologist at LAC+USC.

“The tragic irony of this is that the light is at the end of the tunnel,” he said. “The vaccine is rolling out as we speak, and people just need to keep themselves alive until they can get the vaccine.”

 

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