The political economy of drug and alcohol regulation during the COVID‐19 pandemic (excerpt)
By Audrey Redford Angela K. Dills
February 18, 2021
States tightly regulate access to alcohol and other substances. During the pandemic and related state of emergency, state and federal governments adopted a variety of regulations affecting this access. State shelter‐in‐place orders included decisions about whether liquor stores and marijuana dispensaries are essential businesses. Decisions about telehealth access to medical marijuana or treatments for substance use disorders were made at the state and federal levels. This article examines the political economy behind these decisions, focusing on deviations from the norm including Pennsylvania’s decision to close state‐run liquor stores. Interest groups and other political considerations help explain state and federal policy changes affecting access to alcohol and other substances.
Alcohol and drug use are common in the United States. Roughly half of the population aged 12 and older used alcohol in the past month (51.1%). About a quarter were binge alcohol users (24.5%) and 6.1% were heavy alcohol users (SAMHSA, 2019).1 Although alcohol use is the most common of substance use, roughly one in five people aged 12 and older in the United States used illicit drugs in 2019. Marijuana use continues to slightly increase—15.9% of the population aged 12 and older used marijuana in the past year. Cocaine use remains around 2% of the population. Prescription pain reliever misuse is down to 3.6% of the population. Opioid misuse is down to 3.7%; this includes heroin users. Heroin users are 0.3% of the population.
Alcohol and marijuana sales are highly regulated, with regulations differing across states. The pandemic caused by COVID‐19 led most states to adopt policies affecting consumers’ access to alcohol, marijuana, and other substances. In almost all states, liquor stores were deemed essential and allowed to remain open; in almost all states with medical or recreational marijuana dispensaries, these dispensaries were declared essential and remained open. There were, however, a few exceptions to how states treated liquor stores and marijuana dispensaries. Pennsylvania closed its liquor stores as part of the stay‐at‐home order. Massachusetts closed recreational marijuana dispensaries for more than 2 months, although medical marijuana dispensaries remained opened.
Below we consider why Pennsylvania and Massachusetts differed in their responses to the pandemic. We examine political economy factors behind these decisions, shedding light on factors shaping policymakers’ actions toward access to various substances. The pandemic provides an interesting window into whether—and when—highly regulated industries may expand or contract the regulatory regime. Political considerations appear to drive decision‐making in these industries, with likely consequences to consumers and to public health outcomes.
Federal drug policy changed early in the pandemic as well. Federal agencies relaxed rules regarding access to medication for opioid use disorder. State and federal agencies permitted—and had Medicaid and Medicare pay for—telehealth services in a wider variety of situations, including for substance use disorder treatment and prescription of controlled substances. Given the extensive and entrenched federal regulatory regime toward scheduled drugs, understanding conditions in which these regulations may be relaxed provides insights for those seeking to facilitate access for substance use disorder treatment.
In Section 2, we briefly describe drug and alcohol policy leading up to the COVID‐19 pandemic. We review general trends in these policies at the state and federal level in addition to the specific policies of Pennsylvania and Massachusetts, two states whose pandemic policies we specifically discuss in later sections. We integrate the public choice and theory of interventionism literatures in our description to highlight how these factors have shaped alcohol and drug policy historically. Section 3 outlines the policy changes introduced in the wake of the pandemic with specific attention given to Pennsylvania and Massachusetts for their alcohol and marijuana policies. In this outline, we emphasize the public choice influences. Section 4 details the outcomes of these policy changes with emphasis on the knowledge problems faced by policymakers that resulted in many unintended consequences that undermined policymakers’ stated goals. Section 5 concludes.