Drug Control: State Approaches Taken to Control Access to Key Methamphetamine Ingredient Show Varied Impact on Domestic Drug Labs
Published: 2013-01-31T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Meth can be made by anyone using easily obtainable household goods and consumer products in labs, posing significant public safety and health risks and financial burdens to local communities and states where the labs are found. Meth cooks have discovered new, easier ways to make more potent meth that require the use of precursor chemicals such as PSE. Some states have implemented electronic tracking systems that can be used to track PSE sales and determine if individuals comply with legal PSE purchase limits. Two states, along with select localities in another state, have made products containing PSE available to consumers by prescription only. GAO was asked to review issues related to meth. Thus, GAO examined, among other things, (1) the trends in domestic meth lab incidents over the last decade; (2) the impact of electronic tracking systems on meth lab incidents and limitations of this approach, if any; and (3) the impact of prescription-only laws on meth lab incidents and any implications of adopting this approach for consumers and the health care system. GAO analyzed data such as data on meth lab incidents and PSE product sales and prescriptions. GAO also reviewed studies and drug threat assessments and interviewed state and local officials from six states that had implemented these approaches. These states were selected on the basis of the type of approach chosen, length of time the approach had been in use, and the number of meth lab incidents. The observations from these states are not generalizable, but provided insights on how the approaches worked in practice.
section_title: What GAO Found
paragraphs: Methamphetamine (meth) lab incidents--seizures of labs, dumpsites, chemicals, and glassware--declined following state and federal sales restrictions on pseudoephedrine (PSE), an ingredient commonly found in over-the-counter cold and allergy medications, but they rose again after changes to methods in acquiring PSE and in the methods to produce meth. According to Drug Enforcement Administration (DEA) data, the number of lab incidents nationwide declined through 2007 after the implementation of state and federal regulations on PSE product sales, which started in 2004. The number of meth lab incidents reported nationally increased after 2007, a trend primarily attributed to (1) the emergence of a new technique for smaller-scale production and (2) a new method called smurfing--a technique used to obtain large quantities of PSE by recruiting groups of individuals to purchase the legally allowable amount of PSE products at multiple stores that are then aggregated for meth production.
Electronic tracking systems help enforce PSE sales limits, but they have not reduced meth lab incidents and have limitations related to smurfing. By electronically automating and linking log-book information on PSE sales, these systems can block individuals from purchasing more than allowed by law. In addition, electronic tracking systems can help law enforcement investigate potential PSE diversion, find meth labs, and prosecute individuals. However, meth cooks have been able to limit the effectiveness of such systems as a means to reduce diversion through the practice of smurfing.
The prescription-only approach for PSE appears to have contributed to reductions in lab incidents with unclear impacts on consumers and limited impacts on the health care system. The implementation of prescription-only laws by Oregon and Mississippi was followed by declines in lab incidents. Law enforcement officials in Oregon and Mississippi attribute this reduction in large part to the prescription-only approach. Prescription-only status appears to have reduced overall demand for PSE products, but overall welfare impacts on consumers are unclear because of the lack of data, such as the cost of obtaining prescriptions. On the basis of the limited information available from health care providers in Oregon and Mississippi, there has not been a substantial increase in workload demands to provide and dispense prescriptions for PSE products.

section_title: Letter
paragraphs: Methamphetamine (meth) is a powerful, highly addictive stimulant drug  that has limited medical uses. Today, meth can be made by anyone  using easily obtainable household goods and consumer products.  According to the Drug Enforcement Administration (DEA) and the Office  of National Drug Control Policy (ONDCP), illicit meth used in the United  States today is manufactured by Mexican drug-trafficking organizations in  “super labs” located in Mexico and California, as well as by cooks in  “small toxic labs” predominately located in the central United States, from  the Gulf of Mexico to the Great Lakes and from the plains to the  Appalachian Mountains. These labs pose significant public safety and  health risks and financial burdens to local communities and states where  they are found. The toxic chemicals and solvents involved in meth  manufacturing can result in fiery explosions and expose property and  people, including children, to contaminates that are dangerous and costly  to remove.
In the wake of an increased law enforcement focus on illicit meth labs in  the 1980s, meth manufacturing methods changed. Meth cooks  discovered new, easier ways to make more potent meth that required the  use of precursor chemicals such as pseudoephedrine (PSE), a nasal  decongestant commonly found in over-the-counter (OTC) cold and allergy  medications. PSE is the primary essential ingredient used to make meth  in the United States today. Initial federal efforts to address a growing  meth problem primarily focused on increased meth-trafficking penalties  and regulating the bulk importation, exportation, and distribution of meth  precursor chemicals such as PSE. However, by 2004, the annual number  of meth lab incidents reported by law enforcement had reached an all- time high of over 24,000. In response, many states began taking steps to  further regulate PSE at the point of sale, such as requiring customers to  present photo identification (ID) when purchasing PSE products and  pharmacists to keep PSE products behind the counter and maintain a log  of all sales. In 2006, the Combat Methamphetamine Epidemic Act of 2005  (CMEA) was passed to, among other things, regulate the retail sale of  OTC PSE products by setting daily and monthly sales limits for customer  purchases and requiring sellers to keep these products behind the  counter and maintain a written or electronic sales logbook.
Recognizing the serious public safety and health risks and financial  burdens of these labs, state and local governments and Congress have  since taken or considered taking further action to help prevent PSE  diversion to make illicit meth. For example, some states have  implemented electronic tracking systems that can be used to track PSE  sales and determine if individuals comply with legal PSE purchase limits.  Two states, along with select localities in another state, have made  products containing PSE available to consumers by prescription only. In addition, since 2010, at least 69 bills have been introduced in 18 states  that would require consumers to obtain a prescription to purchase PSE  products. In this context, you requested that we provide information on  domestic meth lab incident trends and the impacts these two approaches  have had on the domestic meth lab problem. Accordingly, this report  addresses  the trends in domestic meth lab incidents over the last decade and the  impact of domestic meth labs on the communities affected by them; the impact of electronic tracking systems on domestic meth lab  incidents and the limitations, if any, of using these systems; and  the impact of prescription-only laws on domestic meth lab incidents  and any implications of this approach for consumers and the health  care system.
To identify trends in domestic meth lab incidents over the last decade, we  analyzed data for all states from DEA’s National Seizure System on lab  seizure incidents that occurred during the last 10 complete calendar  years, 2002 through 2011. Using these data, we analyzed the number of  incidents nationally, by region, and by type of lab and lab capacity. To  assess the reliability of these data, we discussed the data with agency  officials and compared them with other data and documentation, where  available, from states we selected as case studies for this review. We  selected this non-probability sample of states to reflect a mix of  characteristics, such as the type of approach chosen for controlling the  sale of PSE products (electronic tracking or prescription-only), length of  time the approach has been in use, and the number of meth labs seized  relative to the state’s population size. We worked with DEA to resolve  any data discrepancies and determined that the data were sufficiently  reliable for the purposes of this report. We also interviewed federal  officials, as well as state and local officials in the 6 case study states  about meth lab trends. While we cannot generalize any findings or results  to the national level from this sample, this information provided  perspectives on the factors affecting meth lab trends. We also reviewed  drug threat assessments and reports by the National Drug Intelligence  Center (NDIC) and information from DEA and ONDCP officials. We  reviewed the methodology of the assessments and reports and found  them sufficiently reliable for our purposes. To determine the impact of  domestic meth lab incidents on the communities affected by them, we  reviewed documentation from the Department of Justice (DOJ), data and  documentation from DEA, a report from the DOJ Inspector General on  DEA’s meth lab cleanup program, reports from the RAND Corporation,  and information from various state and local officials from our case study  states.
To determine the impact of electronic tracking systems on domestic meth  lab incidents, we analyzed DEA data from 2002 through 2011 on the  number of meth lab incidents that were reported in the 3 states that have  implemented electronic tracking the longest—Kentucky, Oklahoma, and  Tennessee. We also reviewed PSE purchase activity data for 2011 and  2012 from Appriss, the firm that developed and manages the software  program MethCheck, which is used as the operational platform for the  National Precursor Log Exchange (NPLEx), the interstate electronic  tracking system paid for by manufacturers of PSE products. We chose  this time period because 2011 and 2012 were the most recent years for  which data from multiple states were available. In addition, we obtained  information from officials with Appriss as well as officials with state and  local law enforcement in the 4 electronic tracking case study states.  Although the perspectives of these state and local officials cannot be  generalized across the broader population of state and local law  enforcement agencies in electronic tracking states, their perspectives  provided insights into and information on the use and impact of the  approach in practice and its limitations.
To determine the impact of prescription-only laws on domestic meth lab  incidents and any implications of adopting this approach for consumers  and the health care system, we analyzed DEA data on meth lab incidents  from Mississippi and Oregon and their border states from 2002 through   We also conducted a statistical modeling analysis of Oregon lab  2011.incident data but could not conduct a similar analysis for Mississippi  because sufficient data were not yet available. We interviewed state and  local officials in prescription-only states about the impact of these laws on  lab incidents, and although their perspectives cannot be generalized  across states, they provided insight for this report. We also reviewed PSE  purchase data from neighboring states. For Mississippi specifically, we  obtained data from IMS Health Inc. through DEA on the volume of PSE  and phenylephrine sales for the period when the prescription-only  approach was in effect for part of the year to the 2009 period, when it was  not. We also obtained and reviewed data provided by the Mississippi  Board of Pharmacy’s Prescription Drug Monitoring Program (PDMP) to  assess the impact on consumers. We also reviewed a report prepared for  the Consumer Healthcare Products Association (CHPA) and interviewed  the state boards of pharmacy and state associations representing  pharmacists in Mississippi and Oregon and the National Consumers  League and the Asthma and Allergy Foundation of America. We  selected these organizations because they have previously surveyed  consumers about access to PSE products. In addition, we interviewed  state associations representing physicians practicing in Oregon and  Mississippi and Medicaid program officials in Mississippi and Oregon.  While their perspectives cannot be generalized to the larger population of  physicians in these states, they provided insights into the impact of the  approach on their members’ practices. We assessed the reliability of data  received from the NPLEx system, IMSHealth Inc., and the Mississippi  PDMP by interviewing knowledgeable officials and reviewing relevant  documentation, and we determined that these data were sufficiently  reliable for the purposes of this report.
We conducted this performance audit from February 2012 to January  2013 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
Additional details on our scope and methodology are contained in  appendix I.
subsections: section_title: Background
subsections: section_title: PSE—an Essential Ingredient for Making Meth
paragraphs: Meth is relatively easy and cheap to make today by individuals with little  knowledge of chemistry or laboratory skills or equipment. PSE, an  ingredient used in OTC and prescription cold and allergy medications, is  the key substance needed to make the dextrorotatory methamphetamine  (d-meth) illicitly produced in most domestic meth labs today. The  difference between a PSE molecule and a d-meth molecule is a single  oxygen atom. Meth cooks make d-meth by using common household  products to remove this oxygen atom to produce meth as shown in   figure 1.
Meth cooks have used two primary processes known as the Nazi/Birch   In recent years, meth cooks have  and Red P methods to make d-meth.developed a variation of the Nazi/Birch method known as the One Pot or  Shake and Bake method that produces meth in one step where  ingredients are mixed together in a container such as a 2-liter plastic  bottle. Another process for making meth is known as the P-2-P method,  which produces a less potent form of meth known as racemic or dl- meth.half as potent as the d-meth made with PSE.
section_title: Federal and State PSE Sales Restrictions
paragraphs: Initial federal efforts to address a growing meth lab and abuse problem  primarily focused on increasing meth-trafficking penalties and regulating  the bulk importation, exportation, and distribution of meth precursor  chemicals such as PSE. In 2004, Oklahoma was the first state to pass a  law to control the retail sale of PSE products by requiring customers to  present photo IDs and pharmacists to keep the product behind the  counter and log all sales. By November 2005, over 30 other states had  passed laws related to the control of the retail sale of PSE products. In  2006, the CMEA was enacted, which included measures designed to  control the availability of meth precursor chemicals such as PSE by  regulating the retail sale of OTC products containing these chemicals.  The CMEA placed restrictions on the sale of these products, including (1)  requiring these products to be kept behind the counter or in a locked  cabinet where customers do not have direct access; (2) setting a daily  sales limit of 3.6 grams and a monthly purchase limit of 9 grams per  customer regardless of the number of transactions; and (3) requiring  sellers to maintain a logbook, written or electronic, to record sales of  these products and verify the identity of purchasers. The CMEA does  not prohibit states from taking actions to establish stricter sales limits or  further regulate the sale of PSE products.
section_title: Electronic Meth Precursor Tracking Systems and Prescription-Only Laws and Ordinances
paragraphs: Since the passage of the CMEA, some states have implemented  electronic systems to track sales of products containing PSE. Through  these systems, retailers report sales of PSE products to a centralized  database that can be used to determine whether individuals are  exceeding the purchase limitations of the CMEA or state laws. Reported  information typically includes the date and grams purchased, as well as  the name, address, and other identifying information of the purchaser.  Most tracking systems are stop sale systems that would query the  database, notify the retailer whether the pending sale would violate  federal or state purchase limitations, and deny sales where limits have  already been reached. As of December 2012, 19 states were using stop  sale tracking systems. Seventeen of these states were using a system  called the NPLEx that is endorsed and funded by PSE manufacturers  through CHPA.by another vendor.
Two states were using systems developed in-house or  Some states and localities have taken additional steps to regulate PSE  sales. Oregon, Mississippi, and 63 Missouri cities or counties have  passed laws or ordinances requiring individuals to obtain a prescription  from a health care provider in order to purchase PSE products. While a  prescription is required, an in-person encounter with a health care  provider may not be necessary to obtain the prescription. There is no set  limit to how much PSE can be prescribed. Both Oregon and Mississippi  require that prescriptions for PSE products be entered into the states’  prescription drug monitoring program, a program that allows for  pharmacists and prescribers to electronically look up how much PSE  product has been prescribed to a patient. Figure 2 shows the states with  prescription-only laws and ordinances and electronic tracking systems,  including the dates these systems were implemented.
section_title: Meth Lab Incidents Rose after a Sharp Decline and Have Wide-Ranging Impacts on Communities
subsections: section_title: Meth Lab Incidents Declined Sharply Following Implementation of State and Federal PSE Sales Restrictions
paragraphs: According to DEA data on meth lab incidents, after peaking in 2004, the  number of lab incidents nationwide declined through 2007 after the  implementation of state and federal regulations on PSE product sales. As  shown in figure 3, the number of lab incidents peaked in 2004, with states  reporting over 24,000 lab incidents nationally. However, beginning in  2005, the number of incidents began to decline sharply and reached a  low of about 7,000 incidents in 2007. While there may be multiple factors  at work that resulted in this decline such as region-specific factors,  federal, state, and local law enforcement officials attribute the primary  cause of the decline to the restrictions on purchases of PSE products  imposed at both the federal and state levels from 2004 through 2006. The  impact of these restrictions was to reduce the accessibility of PSE for use  in illicit meth labs, which in turn resulted in fewer labs during this period.
After reaching a low in 2007, the number of meth lab incidents reported  nationally increased over the next few years. National trends show that  meth lab incidents have increased since 2007, reaching more than  15,000 at the end of 2010 –more than double the number of reported  incidents for 2007. Federal, state, and local law enforcement officials  attribute this rising trend primarily to two factors:
The emergence of a new technique for smaller-scale production.
A production method popularly called the One Pot method, which  simplified the entire meth production process down to a single 2 liter  plastic bottle and enhanced the ability of individuals to make their own  meth, began to emerge in 2007. With this method, meth addicts are  capable of manufacturing their own meth quicker and with less PSE,  chemicals, and equipment than required by traditional meth- manufacturing methods, although this method also produces less  meth than the traditional manufacturing methods. According to DEA  data, more than 87 percent (43,726) of the labs seized with a capacity  reported from 2008 through 2011 have been smaller capacity (less  than 2 ounce) labs and about 74 percent (39,049) used the Nazi/Birch  manufacturing process, of which the One Pot method is a variation.  Less than 0.5 percent (219) of the labs seized during this period were  super labs (labs producing 10 pounds or more of meth per batch),  less than 13 percent (6,473) used the Red P method, and only 0.05  percent (26) of the labs seized during this period used the P-2-P  method, which does not require PSE as a precursor chemical.
Use of a method for meth producers to circumvent PSE sales  restrictions. Another key factor federal, state, and local officials  attribute to the increase in meth labs in recent years is the use of a  method known as smurfing to work around PSE sales restrictions.  Smurfing—which is discussed in greater detail later in this report— essentially involves the coordinated effort by individuals or groups of  individuals to purchase the maximum per person legal allowable  amount of PSE products and then aggregate their purchases for the  use in meth production or for sale to a meth producer. Federal, state,  and local officials stated that consequently, using this technique, meth  producers have been able to obtain the PSE product they need to  make meth despite the federal and state sales restrictions. This, in  turn, has led to the proliferation of more labs.
section_title: South and Midwest Regions Have Significantly Increased Meth Lab Incidents Overall as Compared with Other Regions
paragraphs: Further examination of data trends at the regional level reveals that the  number of meth lab incidents varies greatly among regions of the country.  Specifically, while the number of meth lab incidents continues to be low in  the Northeast and declines in the number of meth labs incidents have  been maintained in the West since PSE sales restrictions went into place,  the South and Midwest regions have experienced significant increases  overall in the number of incidents since 2007. Further, the South and  Midwest have also had more lab incidents than the West and Northeast  since 2003 (see fig.4). In general, these trends are consistent across all  categories of lab types and capacities, except for incidents involving the  P-2-P labs and labs of larger capacities (10 pounds or greater), for which  the West tended to report higher numbers of incidents overall.
Figure 5 shows lab incidents by state for the last decade (see app. II for  this information by state).
Move mouse over state names for meth lab incidents.
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section_title: Domestic Meth Labs Impact Communities in Matters Related to Health Care, Child Welfare, Law Enforcement Resources, and the Environment
subsections: section_title: Impacts on Health Care
paragraphs: Meth labs can have a significant impact on a community’s health care  system when labs catch on fire or explode, causing serious injuries and  burns to meth cooks and other individuals that require costly medical  treatment. Mixing chemicals in meth labs creates substantial risks of  explosions, fires, chemical burns, and toxic fume inhalation. These burns  and related injuries resulting from these events can be more serious than  burns and injuries sustained through non-meth-lab-related causes. For  example, a 2008 study conducted of meth and non-meth burn patients  that received treatment in one hospital burn unit in Kalamazoo, Michigan,  from 2001 through 2005, found that meth lab patients tended to have  more frequent inhalation injuries, needed greater initial fluid resuscitation  volume, required intubation more frequently, and were more likely to have   The small size of the relatively  complications than non-meth patients.new One Pot or Shake and Bake method can be even more dangerous  than larger meth labs, as drugmakers typically hold the One Pot container  up close, increasing the risk for severe burns from the waist to the face.  According to the director of the Vanderbilt University Regional Burn  Center in Tennessee, meth lab injuries can also be more severe than  burns resulting from just fires alone because patients often suffer thermal  burns from the explosion, as well as chemical burns from exposure to  caustic chemicals. He also noted that meth lab burn patients tend to be  more difficult to treat because their addiction and overall poor physical  health make it difficult for them to facilitate their own recovery as well as  the fact that most attempt to hide the cause of their injury, which can  hinder the administration of proper care.
The treatment for meth lab-related burns and injuries can be very  expensive. According to one provider, treatment costs for two meth lab  burn patients exceeded $2 million per patient. Although accurate  estimates of the proportion of burn victims that received their burns from a  meth lab are difficult, one estimate placed the percentage of meth lab  burn patients at 25 to 35 percent of total burn patients. Of those patients  that are identified as receiving their injuries from meth labs, many are  found either not to have health insurance or have publicly funded  insurance such as Medicaid. For example, the 2008 Kalamazoo study  also found that significantly fewer meth burn patients had private  insurance, while more were on Medicaid or had no insurance as  compared with non-meth burn patients.
As part of reporting a lab seizure to the DEA’s NSS, law enforcement is required to  report on the number of children affected by the lab, such as those living at the site as well  as those that might have visited the site. damage the brain, liver, kidney, spleen, and immunologic system; and  result in birth defects.
In addition to the physical dangers, children in environments where meth  is being made are also reported to be at risk to suffer abuse or neglect by  their parents or other adults. Parents and caregivers who are meth  dependent can become careless and often lose their capacity to take care  of their children such as ensuring their children’s safety and providing  essential food, dental and medical care, and appropriate sleeping  conditions. Children living in households where meth labs are operated  are also at increased risk for being physically and sexually abused by  members of their own family or other individuals at the site.
To protect the children discovered at meth lab sites from further harm and  neglect, social service agencies remove the children from their homes  and place them in foster care. Foster care is a social welfare service that  serves the needs of abused and neglected children. Child welfare  workers can remove a child if it is determined that remaining with the  parents will jeopardize a child’s welfare. Children are placed either with a  surrogate foster family or in a residential treatment facility called a group  home with the intent to provide temporary housing in a safe and stable  environment until reunification with the child’s birth parents or legal  guardians is possible. Reunification happens once the state is convinced  that the harmful factors that triggered removal no longer exist. Several  states and jurisdictions have created special protocols and programs to  address the needs of children exposed to clandestine meth labs. These  protocols and programs typically involve medical screening of the children  for toxicity and malnourishment, emergency and long-term foster care,  and psychological treatment. Social service agencies may also seek to  enroll meth-involved parents and their children in a family-based  treatment program, where both the parents and children receive services.  Family-based treatment programs offer treatment for adults with  substance use disorders and support services for their dependent  children in a supervised, safe environment that allows the family to  remain together and prevents exposure to further harm. The costs to  state department of human service agencies to provide services to these  children can be significant depending on the number, age, and specific  needs of the child. For example, from January 2006, through December  2011, the Missouri Department of Social Services substantiated 702  reports of children exposed to meth labs, involving a total of 1,279  children. Of those 1,279 children, 653 required placement in departmental  custody. The total cost of providing custodial care to children exposed to  meth labs in Missouri since August 2005, was approximately $3.4 million  according to the department. In one Missouri county, so many children  were being removed from meth lab homes and placed in state custody  that there are now no longer any foster families available to care for  them. Similarly, according to the Tennessee Department of Children’s  Services, 1,625 children were removed from meth lab homes from  January 2007 through December 2011 and placed in foster care at a cost  of approximately $70.1 million.
The raw materials and waste of the meth labs pose environmental  dangers because they are often disposed of indiscriminately by lab  operators to avoid detection, and can also cause residual contamination  of exposed surfaces of buildings and vehicles where the meth was being  made. According to DEA, for every pound of meth produced, 5 to 6  pounds of toxic waste are produced. Common practices by meth lab  operators include dumping this waste into bathtubs, sinks, or toilets, or  outside on surrounding grounds or along roads and creeks. Some may  place the waste in household or commercial trash or store it on the  property. In addition to dumped waste, toxic vapors from the chemicals  used and the meth-making process can permeate walls and ceilings of a  home or building or the interior of a vehicle, potentially exposing  unsuspecting occupants. As a result, the labs potentially end up  contaminating the interiors of dwellings and vehicles as well as water  sources and soil around the lab site for years if not treated.
Because of the dangerous chemicals used in making meth, cleaning up  clandestine methamphetamine labs is a complex and costly undertaking.  According to regulations promulgated for the Resource Conservation and  Recovery Act by the Environmental Protection Agency, the generator of  hazardous waste is the person who produced or first caused the waste to  be subject to regulation. The act of seizing a meth lab causes any  chemicals to be subject to regulation and thus makes law enforcement  the “generator” of the waste when seizing a lab. Accordingly, seizing a lab  makes a law enforcement agency responsible for cleaning up the  hazardous materials and the costs associated with the cleanup. The  materials seized at a clandestine drug laboratory site become waste  when law enforcement officials make the determination of what to keep  as evidence. Those items not required as evidence are considered  hazardous waste and must be disposed of safely and appropriately. The  task of removal and disposal of the hazardous waste is usually left to  contractors who have specialized training and equipment to remove the  waste from the lab site and transport it to an EPA-regulated disposal  facility. Depending on the size of the lab, the cost for such a service to  respond to an average lab incident can range from $2,500 to $10,000, or  up to as much as $150,000 to clean up super labs, according to DOJ.
To help state and local agencies with the expense of lab cleanup, DEA  established a lab cleanup program where DEA contracts with vendors  and pays them to conduct the cleanup on behalf of the law enforcement  agency seizing the lab. In fiscal year 1998, DEA began funding  cleanups of clandestine drug labs that were seized by state and local law  enforcement agencies, focusing on the removal and disposal of the  chemicals, contaminated apparatus, and other equipment. State and  local law enforcement agencies seeking to utilize this service contact the  DEA to coordinate the cleanup effort. According to DEA program officials,  DEA has spent over $142 million on these cleanups nationwide since  calendar year 2002. See figure 6.
Given that labs can be placed in a wide range of locations, such as  apartments, motel rooms, homes, or even cars, there is also the potential  need for further remediation of these areas beyond the initial cleanup of  hazardous waste if they are to be safely used or occupied again.  Whereas cleanup involves the removal of large-scale contaminants, such  as equipment and large quantities of chemicals for the purpose of  securing evidence for criminal investigations and reducing imminent  hazards such as explosions or fires, remediation involves removing  residual contaminants in carpeting or walls, for example, to eliminate the  long-term hazards posed by residual chemicals. Procedures for  remediation of a property or structure usually involve activities such as  the removal of contaminated items that cannot be cleaned, such as  carpeting, and wallboard; ventilation; chemical neutralization of residues;  washing with appropriate cleaning agents; and encapsulation or sealing  of contaminants, among other activities. Depending on the extent of the  contamination, the cost to remediate a property can be substantial.Extremely contaminated structures may require demolition. However,  unlike the funding that is available for initial lab cleanup from DEA, there  are no federal funds available for remediation, leaving the owner of a  contaminated property responsible for the costs of any remediation to be  done.
Because of their toxic nature, meth labs pose a serious physical danger  to law enforcement officers who come across or respond to them, and  therefore must be handled using special protective equipment and  training that are costly to law enforcement agencies. The process of  cooking meth, which can result in eye and respiratory irritations,  explosions and fires, toxic waste products, and contaminated  surroundings, can be dangerous not only to the meth cook but also to  persons who respond to or come across a lab, such as law enforcement  officers. Because of the physical dangers posed by the labs, the  Occupational Safety and Health Administration has established  requirements for persons, including law enforcement, entering a  clandestine lab. on hazardous waste operations, annual physical exams to monitor the  ongoing medical condition of individuals involved in handling meth lab  sites, and guidelines for protective equipment to be used when working in  a lab. Consequently, whether the lab is raided by investigators or  encountered by accident during the course of an investigation, first  responders and police agencies are required to provide their personnel  specialized training and equipment, such as hermetically sealed hazmat  suits, to safely process a lab. suited up outside the lab as a backup team in case something happens  with the lab and they need to respond, and at least one other officer on- site to provide security while the lab is being processed for evidence and  cleanup. According to one estimate provided by a law enforcement  agency in Indiana, the cost to the agency of the officers’ time as well as  the protective equipment and processing supplies required to respond to  a lab can exceed $2,000 per lab. Given these costs, law enforcement  officials from all case study states agreed that responding to meth labs  can be a significant financial burden on their agencies. For example, in  fiscal year 2010, the Tennessee Meth Task Force spent $3.1 million  providing equipment and training to law enforcement personnel and  responding to meth lab incidents. Further, unlike large multinational drug- trafficking organizations, meth lab operators are usually lower income and  producing meth for personal use; thus operators usually have little in the  way of valuable assets or cash that law enforcement agencies can seize  as a way of recouping the lab seizure response costs.
section_title: Electronic Tracking Systems Help Enforce PSE Sales Limits but Have Not Reduced Domestic Meth Lab Incidents
subsections: section_title: Tracking Systems Can Help Enforce Individual Sales Limits, Identify Potential Diversion, and Prosecute Meth Crimes
paragraphs: Electronic tracking systems can help prevent individuals from purchasing  more PSE product than allowed by law. By electronically automating and  linking logbook information on PSE sales and monitoring sales in real  time, stop sale electronic tracking systems can block individuals  attempting to purchase more than the daily or monthly PSE limits allowed  by federal or state laws. All sales in states using the NPLEx system are  linked; thus the system can also be used to block individuals who attempt  to purchase more than the allowable amount of PSE in any state using  the NPLEx system. According to data provided by the vendor that  provides the NPLEx software platform, in 2011, the system was used to  block the sale of more than 480,000 boxes and 1,142,000 grams of PSE  products in 11 states. Similarly, as of July 31, 2012, the system was used  to block the sale of more than 576,000 boxes and 1,412,000 grams of  PSE products in the 17 states using the system in 2012. See table 1.
By automating the logbook requirement set forth by the CMEA, electronic  tracking systems can make PSE sales information more accessible to law  enforcement to help it investigate potential PSE diversion, find meth labs,  and prosecute individuals for meth-related crimes.  Law enforcement  officials we spoke with in all four case study states that use electronic  tracking systems reported using the systems for one or more of these  purposes. For example, officers from a Tennessee narcotics task force  told us how they use the NPLEx system to help identify the diversion of  PSE for meth production. According to these officers, the NPLEx system  provides them with both real-time and on-demand access to pharmacy  logs via a website and includes automated tools that enable them to  monitor suspicious buying patterns or specific individuals.particular case, the taskforce used NPLEx’s monitoring tools to place a  watch on a specific individual previously identified as being involved in  illegal meth activity. When the individual subsequently purchased PSE,  the task force received a notification e-mail of the purchase and upon   In one  further investigation was able to determine that the individual had sold the  PSE to a Mississippi meth cook. Some law enforcement officials in our  four case study states reported that they do not actively use the electronic  tracking systems for investigations but rather rely on other sources such  as informants, meth hotlines, citizen complaints, and routine traffic stops  to identify potential diversion and meth labs. Nevertheless, these officials  acknowledged using these systems to obtain evidence needed to  prosecute meth-related crimes after meth labs have been found. For  example, a law enforcement official in Iowa noted that after officials have  identified a suspected lab operator or smurfer, they can use the data in  NPLEx to help build their case for prosecution or sentencing by using the  records to estimate the amount of PSE that was potentially diverted for  meth production. They can also determine for which retailers they need to  obtain video evidence to confirm their identity of the individual making the  purchase.
Law enforcement officials in Indiana and Tennessee, two states that  recently moved from lead-generating systems to the NPLEx stop sale  system, reported some challenges with NPLEx as a diversion   Prior to the implementation of NPLEx, law  investigation tool.enforcement was able to use the lead-generating systems in place to  identify individuals who exceeded purchase limits and then take  enforcement action or obtain a search warrant based upon the criminal  offense. However according to these officials, given that NPLEx blocks  individuals from exceeding purchase limits, individuals involved in  diversion are no longer as readily identifiable as persons of interest and it  now takes longer and is more labor intensive to investigate potential PSE  diversions, as they no longer have arrest warrants as a tool to get into a  residence suspected of having a meth lab.
section_title: Meth Producers Use Smurfing to Circumvent Tracking Systems, and Lab Incidents in Tracking States Have Not Declined
paragraphs: While electronic tracking systems such as NPLEx are designed to prevent  individuals from purchasing more PSE than allowed by law, meth cooks  have been able to limit the effectiveness of such systems as a means to  reduce diversion through the practice of smurfing. Smurfing is a  technique meth cooks use to obtain large quantities of PSE by recruiting  individuals or groups of individuals to purchase the legal allowable  amount of PSE products at multiple stores, and then aggregate for meth  production. By spreading out PSE sales among individuals, smurfing  circumvents the preventive blocking of stop sale tracking systems.
Meth lab incidents in states that have implemented electronic tracking  systems have not declined, in part because of smurfing. For example,  meth lab incidents in the three states—Oklahoma, Kentucky, and  Tennessee—that have been using electronic tracking systems for the  longest period of time are at their highest levels since the implementation  of state and federal PSE sales restrictions. While these states  experienced initial declines in meth lab incidents immediately following  the state and federal PSE sales restrictions put in place from 2004  through 2006, lab incidents have continued to rise since 2007, likely in  part because of the emergence of smurfing and the use of the One Pot  method for production (see table 2).
Law enforcement officials from every region of the country report that the  PSE used for meth production in their areas can be sourced to local and  regional smurfing operations.  The methods, size, and sophistication of  these operations can vary considerably—from meth users recruiting  family members or friends to purchase PSE for their own individual labs  to larger-scale operations where groups purchase and sell large  quantities of PSE to brokers for substantial profits, who in turn often sell  the PSE to Mexican drug-trafficking organizations operating super labs in  California.homeless, college students, the mentally handicapped, and inner city  gang members, among others.
Individuals recruited for smurfing have included the elderly,  The use of fake identification by smurfs is an area of growing concern for  law enforcement. Smurfs can use several different false IDs to purchase  PSE above the legal limit without being detected or blocked by a tracking  system. For example, in 2012, through a routine traffic stop, state and  local law enforcement officials in Tennessee identified a smurfing ring  where a group of at least eight individuals had used more than 70 false  IDs over a 9-month period to obtain over 664 grams of PSE. All of the IDs  had been used to purchase the maximum amount of PSE allowed, with  only one transaction (2.4 grams of PSE) blocked by the electronic  tracking system. Law enforcement officials from the four electronic  tracking case study states emphasized that investigating smurfing rings  can be very time and resource intensive because of the large number of  persons involved and the potential use of fraudulent identifications. The  use of fake IDs for smurfing can also affect the use of electronic tracking  systems as tools to assist in the prosecution of meth-related crimes.  According to the National Methamphetamine & Pharmaceuticals Initiative  (NMPI) advisory board, smurfers are increasingly utilizing fake  identification and “corrupting” electronic tracking databases to the point  where prosecutors prefer eyewitness accounts and investigation (law  enforcement surveillance) of violations before filing charges or authorizing  arrests or search warrants.investigations.
This results in costly man-power-intensive  In summary, based on the experience of states that have implemented  electronic tracking, while it has not reduced meth lab incidents overall,  this approach has had general impacts, but also potential limitations,  including the following:
Under the current arrangement with CHPA, the operating expenses of  NPLEx are paid for by PSE manufacturers and provided to the states  at no cost.
Automating the purchase logbooks required by the CMEA and making  the logbook information available in an electronic format to law  enforcement is reported to be a significant improvement over paper  logs that have to be manually collected and reviewed. This record- keeping ability is reported to have also been useful in developing and  prosecuting cases against individuals who have diverted PSE for  meth production.
Electronic tracking maintains the current availability of PSE as an  OTC product under limits already in place through the CMEA and  related state laws.
The NPLEx system helps to block attempts by a consumer using a  single identification to purchase PSE products in amounts that exceed  the legal limit, and can prevent excessive purchases made at one or  more locations.
Although PSE manufacturers currently pay for the NPLEx system,  depending on the circumstances, their financial support may not  necessarily be sustained in the future.
Although electronic tracking can be used to block sales of more than  the legal amount to an individual using a given identification, through  the practice of smurfing, individuals can undermine this feature and  PSE sales limits by recruiting others to purchase on their behalf or by  fraudulently using another identification to make PSE purchases.
According to some law enforcement officials, the stop sale approach  of the NPLEx system makes it more challenging to use the system as  an investigative tool than a lead-generating system because it  prevents individuals from exceeding purchase limits, which would  otherwise make them more readily identifiable to law enforcement as  persons of interest.
The practice by smurfers of using fraudulent identification to purchase  PSE products has been reported to diminish the ability of electronic  tracking systems to assist in the prosecution of meth related crimes.  According to some law enforcement officials, the rising use of  fraudulent identifications has also increased the need to gather  eyewitness accounts or conduct visual surveillance to confirm the  identities of the individuals, a development that in turn has been  reported to lead to more time- and resource-intensive investigations.
section_title: Prescription-Only Appears to Help Reduce Lab Incidents; Full Impact on Consumers Is Unknown and May Be Limited on Health Care System
subsections: section_title: Implementation of Prescription-Only Approach Followed by Declines in Lab Incidents, although Some PSE Diverted from Other States
paragraphs: The number of reported meth lab incidents in both Oregon and  Mississippi declined following the adoption by those states of the  prescription-only approach for PSE product sales (see fig. 7). In the case  of Oregon, the number of reported meth lab incidents had already  declined by nearly 63 percent by 2005 from their 2004 peak of over 600  labs. After the movement of PSE products to behind-the-counter status in  Oregon in 2005 and implementation of the CMEA and state-imposed  prescription-only approach in 2006, the number of reported meth lab  incidents in Oregon continued to decline in subsequent years. In  Mississippi, after the adoption of the prescription-only approach in 2010,  the number of reported meth lab incidents subsequently declined from  their peak by 66 percent to approximately 321 labs in 2011. See fig.7  below.
The communities in Missouri that have adopted local prescription-only  requirements also experienced a decline in the number of meth labs. For  example, while lab incidents statewide in Missouri increased nearly 7  percent from 2010 to 2011, the area in southeastern Missouri where most  of the communities have adopted prescription-only ordinances saw lab  incidents decrease by nearly half.
Even as declines were observed in Oregon and Mississippi after  implementing the prescription-only approach, declines were also  observed in neighboring states that did not implement the approach,  possibly because of other regional or reporting factors. For example, all  states bordering Oregon also experienced significant declines in meth  labs from 2005 through 2011, ranging from a 76 percent decline for  California to a 94 percent decline for Washington state. In Mississippi’s  case, except for Tennessee, all bordering states also experienced  declines in lab incidents from 2009 through 2011, ranging from a 54  percent decrease in Arkansas to a decline of 57 percent in Louisiana.  Consequently, there may be some other factors that contributed to the lab  incident declines across all these states regardless of the approach  chosen. One potential factor for the declines observed from 2010 through  2011 is the exhaustion of DEA funds to clean up labs. According to DEA  officials, as the funds provide an incentive to state and local agencies to  report meth lab incidents to DEA, the lack of funds from February 2011 to  October 2011 may have resulted in fewer lab incidents being reported  during this time period. Other potential factors within the states may have  also contributed to declines in the number of lab incidents in neighboring  states. For example, Arkansas law enforcement officials reported that in  2011, a change in state law took effect that made it illegal to dispense  PSE products without a prescription, unless the person purchasing the  product provided a driver’s license or identification card issued by the  state of Arkansas, or an identification card issued by the United States  Department of Defense to active military personnel. In addition,  Arkansas law requires that a pharmacist make a professional  determination as to whether or not there is a legitimate medical and  pharmaceutical need before dispensing a nonexempt PSE product  without a valid prescription. As a result of these additional requirements,  retailers such as Walmart decided to no longer sell PSE products OTC in  Arkansas and instead require a prescription.
According to state and local law enforcement officials in Oregon and  Mississippi, the prescription-only approach contributed to the reduction of  reported meth lab incidents within those states. For example, according to  the executive director of the Oregon Criminal Justice Commission and the  directors of the Mississippi Bureau of Narcotics and the Gulf Coast  HIDTA, the decline in meth lab incidents in their states can be largely  attributed to the implementation of the prescription-only approach.  Although their perspectives cannot be generalized across the broader  population of local law enforcement agencies, law enforcement officials of  other agencies we met with in Oregon and Mississippi also credited the  reduction in meth lab incidents to the implementation of the prescription- only approach.
To determine the extent to which the declines in lab incidents in Oregon  were due to the prescription-only approach rather than other variables  such as regional or reporting factors, we conducted statistical modeling  analysis of lab incident data, the results of which indicate a strong  association between the prescription-only approach and a decline in meth  lab incidents. Specifically, our analysis showed a statistically significant  associated decrease in the number of lab incidents in Oregon following  introduction of the law, with the lab incident rate falling by over 90 percent  after adjusting for other factors.
With the decline in meth lab incidents, officials in the prescription-only  states reported observing related declines in the demand and utilization  for law enforcement, child welfare, and environmental cleanup services  that are needed to respond to meth labs:
Law enforcement: Local law enforcement officials in Oregon and  Mississippi reported that the reduction in meth lab incidents has  reduced the resource and workload demands for their departments to  respond to and investigate meth labs. For example, one chief of a  municipal police department in Oregon reported that the decline in  meth labs has resulted in reduced costs to his department largely in  the form of reduced manpower, training, and equipment expenses  and noted that lab seizures are now so rare that his department no  longer maintains a specialized team of responders to meth labs.  Another chief of a municipal police department in Mississippi noted  that since the adoption of the prescription-only approach, the amount  of time and resources spent on meth-related investigations has  declined by at least 10 percent.
Child welfare: Officials in both Oregon and Mississippi reported a  reduction in the demand for child welfare services to assist children  found in households where meth lab incidents occurred. For example,  according to a coordinator in Oregon’s Department of Human  Services, the state has not removed a child from a household with an  active lab since 2007. In Mississippi, the Methamphetamine Field  Coordinator with the state Bureau of Narcotics, which tracks the  number of drug-endangered children for the state, reported that the  number of such children declined by 81 percent in the first year that  the prescription-only approach was in effect.
Environmental cleanup: According to data from DEA and the Oregon  Department of Environmental Quality, declines in costs to clean up  labs in Oregon occurred prior to the implementation of the  prescription-only approach, falling from almost $980,000 in 2002 to  about $580,000 in 2005. However, since 2006, costs for lab cleanup  continued to fall and were about $43,000 in 2011. Funding for  cleanups in Mississippi showed more variation and fluctuation from  year to year; however, between 2010, when the prescription-only  approach was implemented, and 2011, cleanup costs dropped by  more than half (from over $1 million to less than $400,000).
However, even as the prescription-only approach appears to have  contributed to reducing the number of lab incidents in Oregon, the  availability and trafficking of meth is still widespread and a serious threat  in the state. According to a threat assessment by the Oregon HIDTA,  while the number of reported meth lab incidents has declined, crystal  meth continues to be highly available in the area as Mexican drug  traffickers import the finished product from laboratories outside the state  and from Mexico.
Moreover, while the prescription-only approach appears to have  contributed to a reduction in the number of meth labs in the states that  have adopted it, the experience of these states to date has shown that  the prescription-only approach does not preclude individuals from  traveling to neighboring states to purchase PSE products for use in meth  labs. Consequently, even as the number of meth lab incidents has  declined in prescription-only states, law enforcement reports that many  lab incidents that still occur in these states are largely due to PSE product  obtained from states without a prescription requirement for PSE. For  example, according to a threat assessment by NDIC, law enforcement  officers interviewed in 2011 reported that the more stringent restrictions  on pseudoephedrine sales in Mississippi have led many pseudoephedrine  smurfing groups to target pharmacies in the neighboring states of  Alabama, Louisiana, and Tennessee in order to continue operations.  Officials of a sheriff’s office in a county located along the Gulf Coast in  Mississippi stated that the department’s investigations have found that  large numbers of individuals from Mississippi travel out of state to  purchase PSE in an effort to circumvent the Mississippi prescription-only  law. While some out-of-state purchases may be for licit uses, the officials  stated that they believed a substantial proportion of the PSE brought back  from other states was likely being diverted for the production of meth.  According to law enforcement officials in Oregon, most of the incidents  reported there in recent years involved either dumpsites or inactive  “boxed labs” that had been used in previous years but have been  dismantled and stored away for potential future use. According to the  legal counsel for the Oregon Narcotics Enforcement Association, the  association asked law enforcement to determine the source of PSE for  lab incidents, in cases where that could be determined. In every case  where a determination could be made, it was reported that the PSE was  obtained from neighboring states, mostly Washington, but also Idaho,  California, and Nevada.
According to PSE purchase activity data from the NPLEx electronic  tracking system and the vendor that provides its software platform,  individuals using Oregon identifications have purchased PSE products in  neighboring states. These data indicate that from October 15, 2011,  through August 31, 2012, over 30,000 purchases were made by  individuals using Oregon identifications. Similarly for Mississippi, reports  by law enforcement of individuals traveling to neighboring non- prescription-only states to purchase PSE products is supported by PSE  purchase activity data provided by the NPLEx electronic tracking  system. Since the time the NPLEx system has been implemented in  these states, the PSE purchase activity data indicate that over 172,000  purchases have been made by individuals using Mississippi  identifications.
2011 Ark. Acts 588. See Ark. Code Ann. §§ 5-64-1103 to -1105. seek to obtain the products in Alabama.laws is to extend the prescription-only requirement for Mississippi  residents into Arkansas and Alabama. Officials from the Mississippi  Bureau of Narcotics said these laws will help prevent PSE product from  being obtained and diverted to Mississippi for use in meth labs.
In essence, the impact of these  In addition to obtaining PSE products from non-prescription states,  another potential source of PSE for meth labs in prescription-only states  and localities is through the illicit diversion of PSE obtained with a  prescription. Similar to techniques used to divert other controlled  prescription drugs such as pain relievers, diversion of prescribed PSE can  occur through prescription forgery, illegal or improper prescribing by a  physician, or “doctor shopping,” where an individual goes to several  doctors to obtain a prescription from each doctor. Although these may  provide potential sources of PSE for use in meth labs in prescription-only  states, law enforcement officials in Oregon and Mississippi reported no  known instances from their meth lab investigations of finding that a PSE  product was obtained through one of those methods in order to make  meth. Law enforcement officials in Missouri localities where the  prescription-only requirement has been adopted reported a few instances  of PSE obtained with a prescription being used to make meth. According  to investigators from a regional drug task force in a county in Missouri,  they have found PSE obtained by prescription in at least three meth lab  incidents. Since the county has adopted the prescription-only approach,  they are observing more instances in which prescriptions of PSE are  found at lab incidents. However, they did not find any evidence in these  cases that the PSE had been prescribed illegally or obtained through  prescription forgery or doctor shopping.
section_title: Prescription-Only Status for PSE Appears to Have Reduced Sales of PSE Products, but the Full Impact on Consumers Is Not Known
paragraphs: Judging from the experience of Mississippi, the volume of PSE products  obtained by consumers after the adoption of the approach declined from  levels that existed when PSE was available OTC. Data on Mississippi  OTC PSE product sales and the number of prescriptions for PSE filled  suggest that use of PSE products could have fallen by several hundred  thousand units after the implementation of the prescription-only approach.  For example, annual unit sales of PSE dropped from almost 749,000 in  2009 before the prescription-only approach went into effect, to  approximately 480,000 total units of PSE product sold OTC or prescribed  in 2010, when the approach was in effect for half the year, to  approximately 191,000 units prescribed or sold during 2011, when the  approach had been in place for the full year (see table 3). Data are not  available for Oregon on the sales of PSE products immediately before  and after the implementation of the prescription-only approach to do a  comparable analysis.
Given the more restrictive access to PSE products consumers would face  under the prescription-only approach, it is expected that consumers will  be impacted. The extent of this impact depends on a number of variables  such as the potential change in the effective price of PSE that the  requirements of the prescription-only approach result in and the  availability of effective substitutes or alternative remedies for PSE, for  example. Under the prescription-only approach, the effective price of  PSE, which includes costs associated with obtaining a prescription, such  as the costs of time and travel to the physician for an appointment as well  as any associated copays or out-of-pocket charges for the appointment  itself, would increase if an in-person visit were necessary, having a  negative impact on consumers. If the PSE prescriptions are being  obtained by consumers at a higher effective price because of these  factors, consumers can be expected to be negatively impacted to some  extent by the prescription-only approach. At the same time, some of these  costs, such as the costs of time and travel to go to an in-person  appointment can be mitigated to the extent patients can obtain a  prescription for PSE through a telephone consultation with their  physicians. While it is likely that the effective price for PSE products is  higher under the prescription-only approach, data on the cost to  consumers for obtaining these prescriptions are not available to make this  comparison. Further complicating the determination of the change in the  effective price of PSE is the fact that the actual costs to a given consumer  for that person’s time, travel, and insurance coverage can vary from  consumer to consumer depending on the person’s individual  circumstances. For example, given their lack of insurance, uninsured  consumers or patients will likely face higher effective costs to obtain PSE  products under a prescription-only approach than those with insurance.  Because of the uncertainty involving these variables and factors, it is not  possible to determine the magnitude of the change in effective price of  PSE for consumers.
Despite the likely increase in the effective price of PSE because of the  prescription-only approach, according to state agencies and consumer  groups, consumers in Oregon and Mississippi have made few complaints  about the approach since its implementation, although research or  surveys on the issue have not been conducted. For example, according  to the executive director of the Oregon Board of Pharmacy, the state  agency that adopted the rule making PSE a controlled substance, the  board initially received a small number of complaints from consumers  when PSE was initially scheduled, but after a number of months, the  board stopped hearing about it. Officials at the Mississippi Board of  Pharmacy also noted that they have not received any complaints from  consumers about the prescription requirement since it went into effect.  According to consumer and patient advocacy organizations such as the  National Consumers League and the Asthma and Allergy Foundation of  America, which conducted surveys of consumers regarding access to  PSE products in 2005 and 2010 respectively, neither organization has  received feedback or complaints from consumers or patients from either  state about the diminished access imposed on PSE products by the  prescription-only approach. Both organizations also noted that they have  not conducted any additional research or surveys on the issue since their  earlier surveys in 2005 and 2010.
Another variable that determines the impact of the prescription-only  approach on consumers is the availability of substitutes for PSE that  consumers can use as alternatives to offset any potential increase in the  effective price to consumers for obtaining PSE by prescription. To ensure  that consumers still have access to an unrestricted oral OTC  decongestant, manufacturers of cold and allergy medicines reformulated  many products by substituting the ingredient phenylephrine (PE), an  alternative oral decongestant also approved by FDA for use in OTC  medicines that cannot be used to make methamphetamine. However,  according to sales data on PE products in Mississippi for the periods  before and after implementation of the prescription-only approach, the  changes in sales volume for PE products do not appear to show any  direct substitution of PE for PSE by consumers. In fact, the change in  volume in PE products shows a decrease for the 52-week period ending  in December 2011 (see table 4).
The lack of a consumer shift from PSE products to PE products could be  the result of several potential factors, but data are limited or unavailable  to ascertain their impact. For example, it could reflect, on average,  consumer perception that PE is not an effective substitute for PSE.  Similarly, it could also be an indication that consumers are choosing to  forgo medicating their conditions or are using other medications or  remedies to relieve their symptoms. Another potential factor that could  contribute to this lack of a consumer shift to PE from PSE is the extent to  which PSE sales were being diverted for meth use. Although available  estimates of the extent to which PSE sales are being diverted vary  greatly, the drop in PSE sales without a corresponding increase in PE  product sales could also imply that some of the PSE sales were likely  being diverted for meth production. According to officials of the market  research firm that provided the PE sales data, another potential  explanation for the lack of a distinct shift in demand for PE is the fact that  several PE products had to be recalled by the manufacturer because of  manufacturing issues.
Industry has noted that PE has limitations as a direct substitute for PSE,  and in 2007, FDA reexamined the effectiveness of PE at the approved  dosing levels. At the request of citizen petitioners who claimed that the  available scientific evidence did not demonstrate the effectiveness of PE  at the approved 10-miligram dosage level, an FDA advisory committee  reviewed the issue in December 2007, including two meta-analyses of   After reviewing  studies provided by the citizen petitioners and CHPA.this evidence, the committee concluded that, while additional studies  would be useful to evaluate higher doses, the 10-miligram PE dose was  effective. However, since the recommendation of the FDA advisory  committee in 2007 to study the effectiveness of PE at higher dosage  levels, it appears that limited work has been undertaken to do so.  According to CHPA, while it agrees that the approved dosage levels of  PE are effective, PE has known limitations that make it a less than viable  substitute for PSE in some long-duration applications and for many  consumers.
As would be expected under the more restrictive prescription-only  approach, consumers of PSE products would be negatively impacted to  some extent by enactment of the prescription-only approach, considering  the variables that determine the change in the effective price of PSE  products. However, because of uncertainties related to these variables,  such as consumers’ individual situations regarding insurance or the need  for an in-person consultation with their physicians, the effectiveness of  substitutes such as PE or use of other alternatives, and the extent to  which PSE sales have been used for illicit purposes, the net effect on  consumer welfare resulting from enactment of a prescription-only policy  cannot be quantified.
section_title: The Impact on the Health Care System Is Generally Unknown but Substantial Changes in Workload Have Not Been Reported to Date
paragraphs: One of the concerns expressed by industry about the potential impact of  the prescription-only approach is that it is likely to increase the workload  of health care providers and the overall health care system to some  extent. Both the Oregon and Mississippi laws required individuals to  obtain a prescription from a health care provider which requires some  type of visit or consultation with the provider. This visit or consultation  requires increased provider workload to process the prescriptions. In  addition, individuals who do not already have an established relationship  with a health care provider may require a more involved, initial in-person  visit to obtain a prescription, and pharmacies may experience increased  workload because of new dispensing requirements. Assuming that health  care providers charge prices that reflect the costs of providing these  additional services, any increase in the workload of health care providers  should get reflected in the office charge billed the patient.
While the impact of the prescription-only approach on the health care  system is generally unknown, on the basis of limited information available  from health care providers in Oregon and Mississippi, it does not appear  that there has been a substantial increase in workload demands to  provide and dispense prescriptions for PSE products. According to a  2011 study commissioned by CHPA on managing access to PSE, judging  from Oregon’s experience, the number of health care provider visits did  not grow significantly, as consumers have noted obtaining a prescription  via telephone or fax request. Officials from associations representing  physicians in Oregon stated that their members have not reported any  real impact on their practices, and their research from members suggests  that the benefits of fewer meth labs outweighs any inconvenience for their  membership of requests for prescriptions. Officials from the association  representing Mississippi physicians similarly reported that from the  perspective of a limited sample of its members involved in family practice,  emergency room care, and addiction treatment, no increase had been  observed in the demand for appointments from patients seeking PSE  products. In addition, representatives from the association representing  pharmacists in Oregon stated that they have received few complaints  over the prescription-only requirement. Further, reports from the  experience of Oregon and Mississippi indicate that there has not been a  significant increase in cost to the states’ Medicaid programs. In terms of  an impact on states’ Medicaid programs, officials in those states said  there was no net change in their programs’ policy with the implementation  of the prescription requirement statewide because their programs already  required that participants obtain a prescription for PSE products if they  wanted to have the medication covered under the states’ Medicaid  pharmacy benefit formulary.
In summary, on the basis of the experience of Oregon and Mississippi,  the use of the prescription-only approach has had the following impacts:  Its apparent effectiveness in reducing the availability of PSE for meth  production has in turn helped to reduce or maintain a decline in the  number of meth lab incidents in the states that have adopted the  approach.
The reduction in meth lab incidents has led to a corresponding decline  in the demand or need by communities for child welfare, law  enforcement, and environmental cleanup services to respond to the  secondary impacts of the meth labs.
Although it is difficult to quantify due to the lack of data and wide  variation in the individual circumstances of consumers, the  prescription-only approach has the potential for placing additional  burdens on consumers to some extent.
Increased the potential for additional workload and costs for the health  care system to provide prescriptions for PSE products. From the  limited information and data that are available to date, it is not clear  that they have been substantial in the two states that have adopted  the prescription-only approach to date.
Increased possibility of consumers in a prescription-only state  attempting to bypass the prescription-only requirement by purchasing  PSE in a neighboring nonprescription state.
section_title: Agency Comments
paragraphs: We provided a draft of this report to the Department of Justice and  ONDCP for comment. Justice and ONDCP did not provide written  comments on the report draft, but both provided technical comments,  which we incorporated as appropriate.
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If you or your staffs have any questions about this report, please contact  Carol Cha at (202) 512-4456 or chac@gao.gov. Contact points for our  Office of Congressional Relations and Public Affairs may be found on the  last page of this report. Key contributors to this report are listed in  appendix IV.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: Our objectives were to identify (1) trends in domestic meth lab incidents  over the last decade and the impact of domestic meth labs on the  communities affected by them; (2) the impact of electronic tracking  systems on domestic meth lab incidents and the limitations, if any, of  using these systems; and (3) the impact of prescription-only laws on  domestic meth lab incidents and any implications of this approach for  consumers and the health care system.
To identify the trends in domestic meth lab incidents over the last decade,  we obtained and analyzed data for all states from the Drug Enforcement  Administration’s (DEA) National Seizure System (NSS) data on nearly  149,000 lab seizure incidents that occurred during the last 10 calendar  years, 2002 through 2011. Using these data, we analyzed the number of  incidents nationally and by region and by type of lab (i.e., P-2-P,  Nazi/Birch and One Pot, or Red Phosphorus) and lab capacity. To assess  the reliability of these data, we discussed the sources of the data with  agency officials knowledgeable about the data to determine data  consistency and reasonableness and compared them with other  supporting data and documentation, where available, from states selected  to be case studies for this review. As reporting by state and local law  enforcement agencies of lab incidents to DEA is voluntary except when  DEA provides funds to the agencies for lab cleanup, because of the  exhaustion of DEA’s cleanup funds less than half way through fiscal year  2011, the number of lab incidents reported for 2011 could be biased  downward as compared with the number of incidents in previous years.  We discussed this issue and its potential implications with DEA officials  that manage the collection of the data and the steps they have taken to  address it. From these efforts and discussions, we determined that the  data were sufficiently reliable for the purposes of this report.
To identify key factors that influenced lab seizure incident trends over  time, we obtained the perspectives and information on meth lab incident  trends and factors influencing this trend from state and local officials we  interviewed in states that were selected as case studies. This  nonprobability sample of states was selected to reflect a mix of  characteristics such as the type of approach chosen for controlling the  sale of pseudoephedrine (PSE) products (electronic tracking or  prescription-only), length of time the approach has been in use, and the  number of meth labs seized relative to the state’s population size. The  states selected for inclusion as case study states included Iowa  (electronic tracking), Kentucky (electronic tracking), Mississippi  (prescription-only), Missouri (electronic tracking), Oregon (prescription- only), and Tennessee (electronic tracking). While we cannot generalize  any findings or results to the national level from our sample of states  visited for our case studies, the information from these states provided  perspective on meth lab trends and the experiences of the states in  implementing these approaches. We also reviewed drug threat  assessments and reports by the National Drug Intelligence Center (NDIC)  and information from officials with DEA and the Office of National Drug  Control Policy (ONDCP). We reviewed the methodology of the  assessments and reports and found them sufficiently reliable to provide  perspectives on meth lab incident trends and factors influencing these  trends. We obtained additional information and input regarding factors  that contributed to meth lab incident trends from federal, state, and local  officials participating in the May 2012 conference of the National  Methamphetamine and Pharmaceutical Initiative (NMPI), a national  initiative funded by ONDCP.
To determine the impact of domestic meth labs on the communities  affected by them, we first reviewed a variety of reports and studies on  meth labs and their impacts from sources such as the Department of  Justice (DOJ), DEA, the RAND corporation, media reports, and published  academic research to identify the particular areas or ways that  communities are directly affected as a result of the presence of labs. On  the basis of this review, we identified the key ways communities are  impacted by meth labs. These included the provision of health care to  meth lab burn victims, threats and dangers posed to the welfare of  children, environmental damage, and increased demand and workload for  law enforcement agencies. While there are other areas or ways that can  be impacted by meth labs, such as treatment for health-related conditions  related to meth abuse and the demand for addiction treatment, these  impacts are caused by the abuse of both imported and domestically  produced meth and are not impacts unique to meth labs. Therefore, we  did not include those areas in our review. To describe impacts on health  care providers to administer care to meth lab operators injured or burned  by their labs, we reviewed and synthesized information from published  academic research comparing the injuries and treatment provided to  meth-lab-burn victims as compared with non-meth lab burn related  patients, documentation from DOJ on meth labs, and media reports on  the reported impacts of meth labs on hospital burn centers. We also  interviewed the director of the burn center at the Vanderbilt University  Hospital in Nashville, Tennessee, to get his perspective, as the center  has treated a significant number of burn patients that received their  injuries from a meth lab. To describe impacts of meth labs on child  welfare, we reviewed and synthesized information from DOJ on drug- endangered children, meth lab incident data from DEA on the number of  children reported to be affected by the labs, and published academic  research on the impact of meth abuse on the need for foster care. To  describe environmental damage caused by meth labs, we reviewed and  synthesized information from DOJ on the impact of meth labs, DEA’s  guidance for meth lab cleanup, and a report from the DOJ Inspector  General on DEA’s meth lab cleanup program. For context, we also  obtained information from DEA on its clandestine lab cleanup program  and the funds expended on the program to assist state and local law  enforcement agencies in cleaning up meth labs from 2002 through 2011.  In addition, we obtained and analyzed information from the case study  states of Mississippi, Missouri, and Oregon on any funds state agencies  spent on the cleanup of meth labs. To describe impacts of meth labs on  law enforcement agencies in communities, we reviewed and synthesized  information from DEA’s guidance for meth lab cleanup, documentation  from DOJ on meth labs, as well as information from state and local law  enforcement officials we interviewed from our case study states.
To determine the impact of electronic tracking systems on domestic meth  lab incidents, we analyzed DEA NSS data on the number of meth lab  incidents that were reported in the 3 states that have implemented  electronic tracking the longest—Kentucky, Oklahoma, and Tennessee—  from 2002 through 2011 to identify any trends in lab incidents that  occurred within those states before and after the implementation of  electronic tracking within those states. To examine the volume of PSE  sales activities the national electronic tracking system monitors and  blocks when necessary, we obtained and reviewed PSE purchase activity  data (purchases, blocks, and exceedances) for 2011 and 2012 from  Appriss, the software firm that developed and manages the software  program MethCheck, which is used as the operational platform for the  National Precursor Log Exchange (NPLEx), the interstate electronic  tracking system paid for by manufacturers of PSE products. We chose  this time period because those were the most recent years for which data  from multiple states were available. To assess the reliability of these data,  we discussed the data with Appriss officials. From these efforts and  discussions, we determined that the data were sufficiently reliable for the  purposes of this report. To understand how electronic tracking works in  practice and the limitations of this approach, we obtained information from  officials with Appriss as well as officials with state and local law  enforcement and the High Intensity Drug Trafficking Areas (HIDTA) in our  electronic tracking case study states of Iowa, Kentucky, Missouri, and  Tennessee. For these state and local law enforcement officials, we  utilized a snowball sampling methodology in which we initially contacted  key law enforcement officials in those states involved in dealing with the  meth lab problem who identified and provided contacts for other officials  in those states to meet with. From these state and local law enforcement  officials, we obtained information and their perspectives on the use of  electronic tracking, its impact on the meth lab problem within their  jurisdictions, and any potential advantages or limitations of the approach  identified through their investigations and experience with the system to  date. Although their perspectives cannot be generalized across the  broader population of state and local law enforcement agencies in  electronic tracking states, their perspectives provided insights into and  information on the use and impact of the approach in practice and its  limitations.
To determine the impact of prescription-only laws on domestic meth lab  incidents and any implications of adopting this approach for consumers  and the health care system, we analyzed DEA NSS data on the number  of meth lab incidents that were reported in the prescription-only states of  Mississippi and Oregon and their border states (Alabama, Arkansas,  California, Idaho, Louisiana, Nevada, Tennessee, and Washington) from  2002 through 2011 to identify any trends in lab incidents that occurred  within those states before and after the implementation of the  prescription-only approach. To determine the impact of the prescription- only approach on meth lab incidents in Oregon, we conducted a statistical  modeling analysis of the lab incident data that controlled for other factors  such as region of the country, ethnic composition of the state population,  the proportion of the state population that is male, distance from the  Mexican border, and the state drug arrest rate, among others. For more  details on the methodology used for this analysis, see appendix III.
To determine the impact of the prescription-only approach in counties and  localities in Missouri that have adopted the approach, we also obtained  and analyzed information from local officials in Missouri on how meth lab  incidents have been impacted since the adoption of the approach within  their jurisdictions. To obtain the perspective of state and local officials on  the impact of the implementation of the prescription-only approach in their  states and localities, we utilized a snowball sampling methodology in  which we initially contacted key law enforcement officials involved in  dealing with the meth lab problem or associations representing law  enforcement in Mississippi, Missouri, and Oregon who then identified and  provided contacts of other officials within their states for us to meet with.  We interviewed these officials to obtain their perspectives on the impact  of the prescription-only approach on the meth lab problem as well as the  perceived impacts on other areas, where possible, such as the demand  for law enforcement, child welfare, environmental cleanup, and the  trafficking of meth within their states. Although their perspectives on these  impacts cannot be generalized across the broader population of state and  local law enforcement agencies in prescription-only states, their  perspectives provided insights into and information on the impact of the  approach in practice. To determine the extent to which individuals in  prescription-only states have been traveling to neighboring states to  obtain PSE product without a prescription or have diverted PSE product  obtained with a prescription, we interviewed and obtained information  from local law enforcement officials in Mississippi, Missouri, and Oregon  on what they have found in their investigations into meth labs and PSE  smurfing. We also obtained and reviewed NPLEx data on PSE purchase  activity from Appriss for PSE purchases made in Washington state with  identifications issued by Oregon from October 15, 2011, to the most  recent full month available (August 2012). We chose the starting date of  October 15, 2011, because that was the date that Washington state  implemented the NPLEx system statewide.
To gauge the extent of PSE sales made in other states neighboring  Oregon (California, Idaho, and Nevada) to individuals using identifications  issued by Oregon that had not implemented NPLEx but had retailers  within the states that used the NPLEx MethCheck software program, we  obtained and reviewed the MethCheck log data on PSE purchase activity  for those states for the same October 15, 2011, to August 2012 time  period. For Mississippi, we obtained and reviewed NPLEx data on PSE  purchase activity for purchases made with identifications from Mississippi  in the NPLEx states neighboring Mississippi (Alabama, Louisiana, and  Tennessee) between the time those states joined NPLEx to July 2012.  To determine the impact of the prescription-only approach on consumers  in Mississippi, we obtained data from IMS Health Inc. through DEA on the  volume of PSE sales for three 52-week periods ending in December  2009, 2010, and 2011 and analyzed the data for any changes in volume  over time, comparing the 2010 and 2011 periods when the prescription- only approach was in effect with the 2009 period when it was not. To  assess the reliability of the data, we reviewed documentation and  information from IMS Health officials knowledgeable about the data to  determine data consistency and reasonableness. From these reviews, we  determined that the data were sufficiently reliable for the purposes of this  report. Because data prior to the period Oregon implemented the  prescription-only approach in 2006 were not available, we were not able  to do a similar analysis for Oregon.
To examine the number of prescriptions filled in Mississippi for PSE  medications, we obtained and reviewed data provided by the Mississippi  Board of Pharmacy’s Prescription Drug Monitoring Program. To assess  the reliability of the data, we discussed the data with officials that manage  the program. From these efforts and discussions, we determined that the  data were sufficiently reliable for the purposes of this report. To obtain  additional information on the reported and estimated impacts of the  prescription-only approach on consumers and the health care system, we  reviewed a report of the potential impacts of the prescription-only  approach prepared for the Consumer Healthcare Products Association  (CHPA). To help obtain perspective on the potential impact on  consumers, we asked the state boards of pharmacy and state  associations representing pharmacists in Mississippi and Oregon, such  as the Oregon State Pharmacists Association, about the extent to which  complaints may have been made by consumers about the prescription- only approach. We also asked the National Consumers League and the  Asthma and Allergy Foundation of America if they had received feedback  or complaints from consumers on the impact of the prescription-only  approach. We chose these organizations because they have previously  surveyed consumers about access to PSE products.
To understand the prescription-only approach’s impact on the workload  demands for physicians, we obtained the perspective of state  associations representing physicians practicing in Oregon and  Mississippi, such as the Oregon Medical Association and the Mississippi  State Medical Association, on the extent to which their members have  reported seeing an increase in demand for appointments for PSE  prescriptions and any corresponding increase in their workload. While  their perspectives cannot be generalized to the larger population of  physicians in these states, they provided insights into the impact of the  approach on their members’ practices. To determine the impact of the  prescription-only approach on the Medicaid programs within Mississippi  and Oregon, we obtained perspectives and information from Medicaid  program officials in those states on what, if any, changes the approach  required of their prescription formulary and any resulting changes in  program costs.
We conducted this performance audit from February 2012 to January  2013 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
section_title: Appendix II: State Level Data on Meth Lab Incidents, 2002 through 2011
subsections: section_title: State Alabama
section_title: Appendix III: Statistical Model Analysis of the Prescription-Only Requirement on Meth-lab Incidents
subsections: section_title: Evaluation of the Impact of Prescription-Only Requirement
paragraphs: We evaluated the impact of the prescription-only pseudoephedrine  requirement on domestic production of methamphetamine separately  using state-level data. We chose Oregon which implemented its  prescription-only pseudoephedrine requirement in 2006. In order to  evaluate the impact of the policy, we performed multivariate regression  analyses using generalized estimating equations (GEE) to compare the  trend in lab seizures, reported to DEA between 2002 and 2010. We  compared the case study state with a selected group of control states  using a method that improves upon the commonly used Difference-in- Differences (DD) estimation method.  We estimated robust standard  errors for the DD coefficients by modeling the covariance structure in the  GEEs. In addition to estimating a DD model, we, alternatively, estimated  the intervention effect by comparing the case state to a single synthetic  control using the synthetic control methods in comparison case studies  following Abadie and colleagues and Nonnemaker and colleagues.These models are described in detail below.
section_title: Data
paragraphs: All data were annual state-level characteristics from 2001 through 2011   Each observation in the data represented a  taken from multiple sources.state for a given year between 2002 and 2011. Some factors were lagged  1 year to account for a deterrent effect and to impute data missing for a  later year. Eleven states were excluded from the final analyses as  potential controls because they had implemented policies early in the  postintervention period or because they were missing data on a key  covariate; they include Arkansas, California, Hawaii, Kentucky, Louisiana,  Iowa, Illinois, Tennessee, Oklahoma, Oregon, Mississippi, and Florida.
Variables included in the analysis were similar to those controlled in other  studies on the impact of precursors.
Outcome variables: We modeled two outcome variables: the total lab  seizure rate per 100,000 population and the small toxic lab seizure (STL)  rate per 100,000 population. Small toxic labs are defined as labs with a  capacity of 1 pound or less. Data on methamphetamine seizure incidents  from the National Seizure System maintained by Drug Enforcement  Administration’s El Paso Intelligence Center (DEA EPIC) were  aggregated to get the number of methamphetamine lab seizures per state  per year.estimate as a denominator multiplied by 100,000. It is expressed as the  rate per 100,000 people. The rates were transformed by taking the log  base 10 to approximate the normal distribution required for a linear  model.
The rates were computed using the Census annual population  Other factors were controlled in this model. The control variables included  the following:
Client rate: The rate of substance abuse clients reported annually into  the Substance Abuse and Mental Health Services Administration  through the National Survey of Substance Abuse Treatment Services  (N-SSATS) per 100,000 people. This factor is lagged 1 year to  account for the possibility that the number of substance abuse clients  has more of an impact on the future number of labs seized than the  current number of labs. Lagging these data also allows us to make up  for unavailable data in 2011. The client rate is not available for 2002.  The 2001 value is used to impute that value.
Region: Regional factors are expected to affect the methamphetamine  problem and domestic production. We cannot identify or control for all  of the potential factors that influence lab seizures for the region, so we  include a set of dummy variables indicating the census division to  approximate the potential influence of regional factors. Divisions  include the following: 1 = New England  2 = Middle Atlantic  3 = East North Central  4 = West North Central  5 = South Atlantic  6 = East South Central  7 = West South Central  8 = Mountain  9 = Pacific (referent category).
Demographics: Some demographic groups are more likely to use  methamphetamine than other groups. We controlled for the  demographic composition of the state population to account for  potential demand for the drug. The percentage of the population that  is non-Hispanic white, male, Hispanic, and under age 18 were  computed annually for each state from Census intercensal population  estimates.
Distance to Mexico: The approximate number of miles between the  state and the nearest Mexican border city was taken from  Cunningham et al. (2010). The number of miles were included as a  set of categories with the farthest distance (1,800 miles) as the  reference category. This variable attempts to account for the supply of  imported methamphetamine on domestic production.
Funding: The Community Oriented Policing Services (COPS) funding  amount from DEA was adjusted to 2012 dollars using the Consumer  Price Index and divided by 1,000 to adjust the scale of the dollar  amounts. This variable controlled for law enforcement activity specific  to methamphetamine lab cleanups. It also helped to adjust for a  possible downward bias in the 2011 reporting because of a  discontinuation of COPS funding for a portion of that year.
Police: The presence of police was measured as the annual number  of employed law enforcement officers as a percentage of the total  population. Police data came from the Uniform Crime Report (UCR)  Law Enforcement Officers Killed in Action (LEOKA) data set. This  factor was lagged 1 year to account for the possibility that the  presence of police has a deterrent effect on the future number of labs  seized. Lagging these data also allowed us to make up for unavailable  data in 2011.
Arrests: The drug arrest rate was measured as the number of drug  arrests (UCR offense code 18) per 100,000 population. The data  come from the Uniform Crime Reporting Program Data: Arrests by  Age, Sex, and Race, Summarized Yearly. Data for Florida were not  reported in this data set. This factor was lagged 1 year to account for  the possibility that the number of drug arrests has a deterrent effect  on the future number of labs seized. Lagging these data also allowed  us to make up for unavailable data in 2011.
While recent analyses of methamphetamine precursor laws have used  relatively similar parsimonious models, our model may still be  underspecified. For example, we did not control for alternative drug use.
section_title: Difference-in- Differences Estimation Model
paragraphs: The DD model is a regression model that compares over time the  outcomes for a unit of analysis that has been exposed to a treatment or  intervention (referred to as a case) with the outcomes of at least one unit  that has not been exposed to the treatment or intervention (referred to as  a control). The case is exposed to the intervention at some point after the  first period of time; the control is never exposed to the intervention during  the course of the study. The impact of the intervention is represented by  the difference in differences. In this case there are two differences. The  first difference is between the average outcomes of the case and the  control, respectively, in the post-intervention period and the  preintervention period. The second difference subtracts the control  difference between the two periods from the case difference. It can be  written as equation 1.
EQ. 1: DD = (y-bar Case,post- - y-bar Case,pre-) - (y-bar Control,post- - y-bar Control,pre-)
For a DD model, the data consist of one observation for each geographic  unit, which is represented by subscript i and each unit of time which is  represented by subscript j. In our analysis, each observation represents a  state in each year from 2000 through 2010. Since the interventions were  implemented in 2006, the preintervention period spans 2000 through  2006. The post period spans 2007 through 2010. A dummy-variableindicating the postintervention period is specified; therefore, our DD  model takes the form:  EQ. 2: Yij= β+ βPost-Intervention Dummy + βOregon+ βPost-Intervention  Dummy*Oregon + βTime+ βXij +εij  Where Yij is the outcome for state i at period j; βDD estimation has some known limitations described in the academic  literature. Beasley and Case (2000) describe the endogeniety of  interventions, i.e., the fact that policies are made in response to the same  conditions that lead to the outcome. Heckman (2000) and Bertrand and  colleagues (2004) showed that because of serial correlation in the  outcomes over time, difference-in-differences models tended to  underestimate the standard error of the intervention coefficient and  therefore overestimate the test statistic, leading to the interpretation of  statistically significant differences between the case and control units.  Abadie and colleagues (2010) argue that the selection of control units are  made on the basis of subjective measures of affinity between case and  control units and that there is uncertainty in the control units’ ability to  produce the counterfactual outcome trend that the case would have  experienced if the intervention has not taken place. This is an additional  source of uncertainty beyond that measured by the standard error. We  attempt to address these limitations in the analysis.
To account for autocorrelation, we implemented this model using  Generalized Estimating Equations (GEE) in SAS Proc Genmod with a  repeated statement specifying the compound symmetry covariance  structure to account for the autocorrelation in the covariates across time  periods for each state. The covariance structure was determined by  examining the working correlation matrix estimated when specifying an  unstructured covariance structure and by comparing the quasi-likelihood  indicator criteria (QIC) statistics for models specifying five different  covariance structures: independence, compound symmetry, first-order  autocorrelation, unstructured, and 1-dependent. The unstructured  covariance structure allows for correlations to be different in each  comparison of times without any specific pattern. The unstructured  working correlation matrix indicated high constant correlation over time.  Since the correlations seem constant, a compound symmetry structure is  more appropriate.
The QIC values for the GEE models were similar with the independent,  compound symmetry, and autocorrelation structures specified, but the  QIC was usually lowest for the independence structure with  autoregressive next. This indicates that those structures fit the model  better. Independence in the measures across time is not a logical  assumption given the nature of the data, and the structure of the  correlation matrix specified by the unstructured covariance structure does  not show declining correlations over time described in the autoregressive  structure. The QIC supports our choice of a compound symmetry  covariance structure.
section_title: Synthetic Control Method
paragraphs: We validated our model findings using the synthetic control method. The  synthetic control method introduced by Abadie and colleagues (2010) is a  modification on the DD method that creates a data-driven synthetic  control that represents the counterfactual of the case in the absence of  the intervention. The synthetic control method has two advantages. It  allows for transparency and objectivity in the selection of control. It also  safeguards against extrapolation of the counterfactual by creating the  synthetic control to match the case closely in the pre-intervention period.
We implemented the synthetic control method in Stata using the synth  ado program. The program uses the set control states to create a  synthetic form of the case study state by weighting the control states. The  treated and synthetic control states are matched on the outcome and any  combination of covariates in the preintervention period so that the mean  squared error of the prediction variables is minimized. Then the model  interpolates the trajectory of the synthetic state over the postintervention  period assuming that the intervention was not implemented. In preliminary  analyses, we tested the robustness of the model matching the state and  synthetic controls on the outcomes alone and on the outcomes and all  covariates controlled in the GEE models. All results presented here are  based on a model matching on the outcome and most covariates  controlled in the GEE models. The synthetic control method does not  generate a simple test statistic to determine whether the difference  between the case study and synthetic control state is statistically  significant. To test whether the results are likely to be found by chance in  Oregon, we ran the model assigning Oregon’s neighboring states that  met our criteria for inclusion as controls (Washington, Idaho, and Nevada)  as the case study state and allowed the model to generate a synthetic  control to compare what would have happened relative to the experience  in each of those states. If the results were found to be similar to Oregon’s,  then we could not dismiss the possibility that our findings for Oregon were  due to chance.
section_title: Results
paragraphs: Prescription-only had significant impacts on lab seizure rates compared  with a selected group of controls. Contrary to the findings in Cunningham  et al. (2012) and Strauberg and Sharma (2012), our analysis found  that lab seizure rate fell by more than 90 percent in Oregon after the  prescription-only requirement was implemented after adjusting for other  factors. While 90 percent seems very high, the estimate should be  considered in the context that the rate has been declining and was  relatively low before the policy was implemented. The impact of the  prescription-only requirement was validated when the case study state  was compared with an empirically generated synthetic control. The  synthetic control method confirmed the direction of the impact in Oregon.  Our placebo analysis that assigned Oregon’s neighbor states as the  control state showed that the reductions seen in Oregon were not  projected in those states, giving some indication that the Oregon  reduction was not found by chance. We cannot determine the extent of  the impact using the synthetic control method because of the poor fit of  the model in the period prior to the policy’s implementation.
Our analysis differs from the two recent studies cited above in the  methodology, including the analytical approach and model specification,  and the date on which the incident data were pulled.
section_title: Interpretation of Results
paragraphs: The key finding from the GEE model is the coefficient on the interaction  between the case study state and the postintervention period indicators.  Since the outcome data were transformed to improve the model fit, we  back-transformed the coefficients for ease of interpretation. Four  estimates are presented in Table 5. They represent the model  specifications. Each group of covariates was modeled on the two  outcomes described above: the lab seizure rate including all capacities  and the small toxic lab seizure rate. The unadjusted model adjusts only  for the policy, state, time effects, and the interaction between the case  study state and the postintervention period indicators. The adjusted  model adjusts for those factors and controls all covariates described  above. The unadjusted impacts are interpreted as the percent change in  the rate resulting from the implementation of the policy adjusting only for  temporal factors. Adjusted factors are interpreted as the percent change  in the rate resulting from the implementation of the requirement after  controlling for other factors that may also affect the change in the seizure  rate. Impacts are determined to be statistically significant if the p-value is  less than 0.05.
The key finding from the synthetic control model is the difference in the  estimated lab seizure rate in the years after 2006 between the case study  state and the synthetic control. Differences in the postintervention period  can be attributed to the impact of the policy when the two match closely in  the preintervention period. Since the states did not always have a close  match in the preintervention period and the model does not generate a  test statistic to indicate whether the differences between the case study  and synthetic control are statistically significant, we do not present  numerical results indicating the size of the impact of the policy from this  analysis; instead we used the results to validate the direction of the  findings of the GEE models.
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Kirk Kiester (Assistant Director),  Charles Bausell, Rochelle R. Burns, Willie Commons III, Yvette Gutierrez- Thomas, Michele C. Fejfar, Christopher Hatscher, Eric Hauswirth, Eileen  Larence, Linda S. Miller, Jessica Orr, and Monique Williams made  significant contributions to the work.