Home » Side event: The Economics of NPS Markets

Side event: The Economics of NPS Markets

Organised by the Government of Switzerland and the London School of Economics.

The recent emergence of New Psychoactive Substances (NPS) at a global scale have raised a number of challenges in the fields of drug policy, public health, and development studies. Despite an increasing amount of attention to the emergence of these substances and their impact on society, the scientific literature on NPS remains scarce and anecdotal in nature. The emergence of NPS highlights the importance of multi-disciplinary contribution to enhance knowledge, improve the quality of information sharing and implement and develop good practices for regulation and harm reduction at a global level. The panel aims to present timely analysis of the social and economic impact of the NPS phenomenon, and policy and regulatory answers to these substances. It presents comprehensive perspectives on cross country regulation, policy and market structures of the NPS phenomenon in order

Chair: Dr Christian Schneider (Swiss Federal Office of Police)

Is it an advantage or disadvantage that NPS aren’t under direct control, on level of harm?

There will be an international conference on NPS, for which applications for abstract are open until April 10.

Dr John Collins (LSE Ideas)

Thank you, and thank you to Christian and the Swiss delegation. Thank you to my fellow panelists. My job is to provide some overview – what role do institutions play in this, if any role?

Quick global context –

  • Conventions evolved
  • Era of Uniformity – ‘war on drugs’ – push for more restrictive policies to produce better outcomes
  • Today: we’re heading towards an era of ‘policy pluralism’ – shift from uniformity. We’re increasingly seeing this around cannabis, parts of the commodity chain, and NPS

Different policy needs – stages of market.

We talk in absolutes about drug policy; certain things have failed absolutely. Caulkins et al 2001 – optimal dynamic policy modelling. e.g. remove licit supply, remove key actors – but – displacement to other substances. Established markets – e.g. cannabis, cocaine, heroin, meth – what effect has prohibition had – virtually nothing, marginal increases in enforcement, at best, displacement between substances. NPS emerges as unregulated alternative to prohibitive substances – NPS is a product of prohibition.

Reuter & Pardo, 2017 – proliferation is a product of prohibition – costs of prohibition must be considered – illicit markets not a natural accompaniment to drugs and impose social costs. Trends in use are socially regulated; not government regulated.

Weaknesses re NPS – scheduling process relatively slow – lack of evidence – overburdening WHO and CND capacity – New Zealand model (theoretical), UK model (seen as weak, blanket ban) – opposite extremes. Therefore – international governance unlikely key to movement – move to more national responses – will be of benefit to broader field. Shift from principle of ‘harm’ to ‘reciprocity’.

Dr Andres Roman-Urrestarazu (University of Cambridge)

Public Health and NPS Policy – Scope of the Problem. Burden of disease and how that has changed overtime. Perception of danger of NPS.

Global Burden of Disease and Substance Abuse. If you look at different countries specifically. There is a certain distribution that comes quite clear.

Differences between 1990s and now – opiate use most burdensome, there has been a massive increase in other substances – medication and NPS. Looking at individual countries – some countries have suffered variations. Large raise in DALYs in US, Baltic Countries (Estonia). Is this a phenomenon that’s relatively new? Is this a rich country problem? When you look at other data/countries, eg Kenya and Angola, Ukraine, you can see that there’s a very big distribution with medications, but other drugs as well. It has diversified a lot. Australia was leading in the 1990s – for other drugs than the big 4. Level of disability produced from NPS still high in Australia in 2015, but has rapidly increased in US.

Challenge – Policy options?

  1. Does concern for NPS match the scope of the problem?
  2. Have policy responses been matched to specific characteristics of the problem they face
  3. Is the public health aspect the missing link of NPS policy?
  4. Only NZ has considered an alternative approach of permitting the restricted sale of regulated substances. Example or failed innovation
  5. Is the impact of the economic dimension of NPS taken into account – is this a rich country problem?

Mr Alexander Soderholm (LSE Ideas)

Thank you everyone. Following Johns presentation – I want to give you a brief overview of NPS in the Middle East.

  1. Drugs are not new to Middle East
  2. NPS are emerging across the region
  3. States have an important opportunity to experiment with policies

Few key points

  • Regulatory systems were in place until mid 20th Century – e.g. Iran, mid 1950s
  • NPS – rapidly developing synthetic drug market – Turkey – synthetic cannabinoids
  • Sale of NPS on open web in Middle East
  • Regulatory responses – left to traditional regulation – unlike Western Europe, people in Middle East will be arrested for NPS
  • Impossible to assess regulatory regulation
  • Turkey stands out as swift regulator – 2014 – 246 NPS placed under control
  • Emergency scheduling powers – Israel, Bahrain and Saudi Arabia – immediate ban for 12 months, then automatically put on permanent list

Reuter & Pardo 2016 – overview of types of users NPS may cater for. Great context of uncertainty. Criminalising use of NPS will most likely only have a small effect on use. Governments should use scheduling to find dangers of substances.

Future direction – will be contingent on several factors – whether or not those substances find a significant consumer base, whether the trafficking production of NPS is conflated with the supply chains of other illicit enterprises. Captagon use in Syria – worrying – how can supply chain undermine governance. Future evidence based policy will requite toxicological and socioeconomic studies of NPS.

Dr Ornella Corazza (University of Hartfordshire)

‘UK approach to regulation’

More than 644 NPS identified recently. My presentation is on the UK and ‘blanket ban’ of prohibition.

UK Psychoactive Substances Act – May 2016. Ban implemented to all psychoactive substances not already controlled. Strong sense of moral panic, and government felt need to respond. Psychoactive Substances Act (PSA) is based on a very weak notion of ‘psychoactivity’ as any substance capable of affecting a person’s mental state. PSA failed to link the definition of ‘psychoactivity’ to harm – leaving this to moral discretion and focusing on the outcome of drug use rather than public health. PSA has been heavily criticised. For the last 10 years, we’ve been monitoring the dark web. I’m not able to share any data. Demand has not matched drug availability. Alternative models – Medicine Act (herbal regulation 2012) – regulates herbal medicine – still need to be studied.

New Drugs vs New Users – NPS availability on the Internet makes them more accessible to a new category of users. A ‘functional approach’ could help us to accomodate rapidly changing lifestyles and eliminate misleading claims, and contribute towards a more practicable implementation and enforcement of NPS law, while not automatically criminalising NPS use, supply and sale. We need to bring innovation into the field.

5th International Conference on Novel Psychoactive Substances 23-24 October in Vienna.

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