NEWDRUG: New Data for the study of Drug Prices in a Global Context

Drug prices are theoretically interesting and a key indicator in the study of drug markets. Illicit drugs will often parallel the prices of precious metals despite minimal labor and production costs. They may do so, even when their chemical purity and the presence of adulterants are unknown variables. A large body of literature suggests that drug prices are largely a function of law enforcement intervention and drug enforcement: As enforcement increases market participants need to be compensated for the risks of interdiction, imprisonment and so forth, and consequently prices increase. Historically, higher drug prices have therefore been considered as a policy goal following the reasoning that higher prices reduce demand, and enforcement has therefore been a key policy.

Despite their centrality to research and policy, drug prices are methodologically challenging: As with almost any other illicit activity, data is not easily collected. Moreover, a high degree of variation both within and between countries means that samples may not be generalizable. Complicating the matter further, prices may vary between sources such as friends and drug dealers. Indeed, one’s embeddedness within drug markets as an infrequent or frequent user with different available social ties may imply better or worse access to illicit drugs at a favorable cost.

Recent years have seen significant changes in the social organization of drug markets wherein many transactions now utilize digital platforms to some extent: “Ring-and-bring” services may be found on social media; encrypted apps used to stay in touch with one’s dealer; and the dark web provides access to a cornucopia of illicit substances in competitive marketplaces. Because platforms on the dark web are typically international in scope, scholars have suggested they may constitute a hitherto unexploited source of data on drug prices in general. National studies have found that drug prices in online drug markets tend to be similar to those reported at the street level and vary between countries. This project develops this area of research further using unique data from two sources: The Global Drug Survey (GDS) and the DATACRYPTO project.

GDS has for a decade surveyed people who use drugs about their sourcing of illicit drugs, whereas the DATACRYPTO project has collected longitudinal data from illicit online drug markets for more than five years. Both projects therefore provide longitudinal data on drug prices across nations. The first question treated within the scope of the project concerns the association between these measures with the aim to examine whether illicit online markets can provide a novel and economic source of data on illicit drug prices across nations. Secondly, the project aims to use the GDS data exclusively took examine the pricing of drugs at the individual scale focusing namely urban-rural distinctions, gender, age, drug consumption, and purchase modes (street dealers, social supply, delivery services et cetera).

This research agenda transcends the limitations on traditional sources of data on drug prices by drawing on large international and longitudinal samples of prices. These findings will contribute to a more thorough understanding of drug prices both within and between countries, and provide much needed knowledge on new modes of collecting data on drug prices, as well as their limitations.

The project is funded by the AAU Talent Program.