Striking confirmation of the price-elasticity of demand for heroin has emerged in Australia over the last few years. Early in 2001 the median price paid per gram increased from $220 to $320. This sudden increase in the cost of heroin was followed by greatly reduced heroin use frequency, expenditure on heroin and, potentially, a large reduction in the number of heroin users active in the heroin market.
The benefits of this reduction in heroin use have been substantial. Weatherburn found a 74 per cent decrease in opioid-related overdose in one major Sydney heroin market (Cabramatta) following the onset of the shortage, and a 53 per cent reduction in overdose across NSW. The drop in heroin use also appears to have produced a significant fall in the incidence of robbery. Prima facie, these outcomes vindicate the assumption underpinning national drug policy that supply control policy has a role to play in harm reduction.
The shortage of heroin that appeared in 2001, however, also had an undesirable side effect. Many heroin users who were still in the market following the peak of the heroin shortage appear to have responded by increasing their consumption of other drugs, most notably cocaine and methamphetamine.
The good old Law of Unintended Consequences strikes again - you have success in the heroin market, and users simply substitute cheaper drugs instead.
This drug substitution effect does make me wonder though how "addicted" to heroin most of these addicts really are. I grew up with movies like The French Connection etc, and they portrayed going cold turkey as a horrific ordeal for the user. However, if a user can give up heroin because of the price and move to cocaine of meth instead, that says to me that they're not physically addicted to heroin. Instead, they're addicted to getting off their nut, and how they get off their nut is really not that important. If all they want is to get into an altered state, then no amount of treatment is going to wean them off drugs.