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Price/quality competitionis the area of contest between the ADMI and the black market drug syndicates. To defeat its black market competitors, the ADMI only needs to provide products of superior quality at comparable prices: ADMI prices need not be lower, because ADMI and its products will enjoy many competitive advantages. Unlike black market drug merchants, the ADMI will provide pharmacologically pure and safe products, packaged with instructions for safe use. That will eliminate both the variations in strength and the contaminants that endanger drug- user health.⁵ ADMI will offer drugs in more safely ingestible forms; and ADMI will serve drug user health interests by steering drug users away from the more dangerous and more addictive drugs in favor of those that are less dangerous and less addictive. ADMI will provide safe and secure places for drug ingestion. The criminal syndicates can match none of ADMI's competitive advantages.

Under two-tiered price policy,financially competent drug users will be charged prices competitive with prevailing black market prices. High drug prices will continue to deter drug use, but, under interposition, high prices will provide little or no stimulus to black market suppliers because of the difficulties of competing against ADMI.

While financially competent drug users will pay high prices, two-tiered price policy provides that indigent addicts can be serviced free or at modest price. That will reduce the crushing financial burden imposed by addiction. It will reduce the economic compulsion to the crimes that are characteristic of indigent addicts--prostitution, robbery, theft, and drug pushing).

There is no time to discuss the remaining four strategic tools, but before leaving this subject, I would like to point out that these last four tools are now tragically underutilized. In the United States, our neglect of these tools is a major cause of the drug/crime syndrome. A recent study^6. shows that one dollar spent on treatment is seven times as effective in reducing drug use as a dollar spent on interdiction, and still we spend money on interdiction, rather than treatment. I should also point out before passing on that these last four strategic tools will be much more effective under interposition than now because the ADMI will be in direct contact with drug users and because participation rates will be higher (for reasons explained in the booklet).

Economic and Fiscal Implications Now the strategic tools have some very remarkable consequences--both for the financing of crime in America and for the financing of society's defenses against drug-related harm. Let us start with some background data.

Recreational drug users are estimated to consume from 15% to 25% of total drugs. Addicts consume the rest. Black market drug prices are estimated to range from 70 to 140 times the ordinary and necessary cost of production. The latest year for which we have an official estimate of U.S. drug sales is 1993, and $49 billion is the figure.⁷If the real economic worth of drugs sold was only 1/70th of the price paid, then American drug users paid $49 billion to buy drugs worth only $700 million. The difference between real value and the inflated price was $48.3 billion. That amount represents the drug/crime subsidy. That subsidy financed drug running, gangsterism, police corruption, and the seduction of new drug users. When we subsidize crime so generously, we should not be surprised that we get a lot of it.