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Painkiller Black Market Will Likely Attract Mexico Criminal Groups

MEXICO / 8 AUG 2012 BY JAMES BOSWORTH EN

Examining the question of whether Mexico's criminal organizations could find a market within US prescription drug abuse, analyst James Bosworth argues that the groups have plenty of good reasons to do so.

A few background points.

  • Estimates suggest the black market in legal pharmaceuticals is worth around two billion US dollars just within Mexico, about 10-15% of the total pharma market there. The potential market in the US is much larger.
  • Most of these illegal-legal drugs in Mexico are not pain killers, but other needed medicines to lower cholesterol, control blood pressure and other common ailments seen on an endless string of commercials in the US.
  • While these drugs are available in the black market around Mexico, the most common location is on the border where US buyers cross to obtain their medicines for cheap. Unfortunately, "black market" isn't as obvious to buyers as they may think. Some border pharmacies obtain their drugs from the black market and then sell them to unsuspecting buyers as white market goods.

The drugs take various forms, but we can put them into three categories:

  • 1) Real. The drugs are obtained legally from pharmacies and users or are stolen from factories, trucks and pharmacies.
  • 2) Repackaged. The drugs are real but repackaged for different sale. They are perhaps expired or were samples given out that are collected into new bottles. Repackaging can sometimes change the brand name or the language on the bottle.
  • 3) Counterfeit. Whether they contain active ingredients (sometimes diluted) or are just sugar pills, these drugs are manufactured to fool the buyer.

The painkiller market in the US is pretty heavily based around the "real." This article on pill mills in Florida does a good job describing how shady gray market providers of pain killers manage to obtain and sell their drugs legally.

Now, with the DEA and others cracking down on that sort of scam, the market is opening for criminal organizations to step in and provide that same service. While Mexico's criminals don't have the same opportunities to get pain pills from legitimate producers, they certainly have the connections to rob pharmacies and factories on both sides of the border, to repackage expired pills that should be destroyed, or to counterfeit (or import counterfeits from China) pain pills with some active ingredient. Like the pattern with meth over the past decade, as the US cracks down on the legalized drug crime within its borders, it becomes more profitable for Mexican criminal groups to produce or procure the drugs down south and traffic it to the northern markets.

The move into the US market will mean the Mexican criminal groups will shift towards pain killers and away from other medicines. Watching for signs of increased pain pill thefts or counterfeits in Mexico will be one key indicator that this trend is increasing. One of the secondary effects to measure will likely be increased pain killer addiction in Mexico and Central America, the same way cocaine use is on the rise in those countries. More supply in the black market will likely lead to increased abuse.

The new challenge for Mexican organizations in the US market will be getting product to consumers through new distribution channels. People addicted to pain pills tend not to buy off the same sstreet corners as addicts to cocaine and heroin. This means the criminals will likely work with doctors and distributors such as the remaining pill mills in various states to get their drugs to market. They will also likely work with shady online dispensaries or illegal black market sites like Silk Road, which one recent study suggests did $22 million in sales last year.

Reprinted with permission from James Bosworth of Bloggings by Boz. See original article here.

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