Mexico's Math Problem Adds Up To A U.S. Meth Problem

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Mexico's math problem adds up to a U.S. meth problem

The gap between Mexico's legal uses of cold pills and its swelling imports of pseudoephedrine points to diversions for meth

Sunday, June 05, 2005
STEVE SUO
Mexican law enforcement officials have worked with U.S. drug agents since 2003 to end the smuggling of pseudoephedrine pills from Hong Kong, believing it to be the largest source of the cold medicine used by methamphetamine traffickers.

However, an analysis by The Oregonian shows that Hong Kong is only a secondary supply of pseudoephedrine for the Mexican drug cartels fueling the U.S. meth trade. The dominant source: cold medicine manufactured by Mexico's legitimate pharmaceutical industry.

The newspaper reached this conclusion by estimating Mexico's legitimate demand for pseudoephedrine, something that U.S. officials have never done and that Mexican officials are only now attempting. The analysis showed that legitimate demand is much smaller than the 224 tons that Mexico imported last year.

Only 81 tons of pseudoephedrine was required to make roughly 140 leading cold medicines in Mexico last year, the newspaper found. This figure was based on sales at 28 major wholesalers and pharmacy chains reported by IMS Health, a U.S.-based market research firm. The newspaper determined the dosage of pseudoephedrine in each product, then multiplied that amount by the number of pills or milliliters of liquid sold.

Even this estimate is generous because the IMS data may inadvertently include illegitimate sales.

Separately, sales data provided by Farmacias Similares, a huge discount pharmacy chain not included in the IMS survey, accounted for another 10 tons of pseudoephedrine.

Solid statistics on cold medicine use by Mexico's extensive public health system were unavailable. The best available data indicate that Mexico's main federal provider of health services consumed, at most, about 16 tons.

Roughly 6 tons was assumed wasted during manufacturing, based on industry standards.

An additional 15 tons went to U.S.-owned "maquiladora" factories that manufacture cold medicine for the U.S. market, according to Mexico's health ministry.

The ministry said about 1 ton was exported to other countries.

Mexico's math problem adds up to a U.S. meth problem
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In total, these legitimate uses of pseudoephedrine accounted for 129 tons, or 95 tons less than what the country imported. And this estimate may understate the problem.

Using a different approach, The Oregonian attempted to answer what a plausible growth rate for Mexican pseudoephedrine imports might be.

From 1996 to 1998, just before Mexico's pseudoephedrine boom began, its imports of the chemical averaged 30 tons a year. The newspaper assumed these were entirely legitimate, then factored in the effects of population growth, rising standards of living and a ban on another popular decongestant, phenylpropanolamine.

Calculated this way, legitimate uses should have grown to 92 tons by 2004. That would leave 132 tons available for the meth trade.

An assessment by Mexico's health officials suggests the amount diverted could be even more. They have told international authorities the country could need as little as 70 tons of pseudoephedrine, an estimate that is still being refined.

Mexico's pseudoephedrine surplus of roughly 100 tons matches what meth cooks in Mexico require each year. Previous analysis by the U.S. Drug Enforcement Administration shows that roughly 200 tons is needed to produce all the meth sold in the United States, and DEA Administrator Karen Tandy told Congress in March that labs in Mexico make about 53 percent of U.S. meth supply.

Jose Luis Santiago Vasconcelos, Mexico's deputy attorney general for organized crime, acknowledged in an interview that drug cartels are obtaining pseudoephedrine pills made by the country's pharmaceutical industry.

However, Vasconcelos said pills made in Hong Kong are the cartels' main source. U.S. officials say shipping records and other intelligence show Hong Kong pharmaceutical manufacturers have shipped 450 million pseudoephedrine pills to Mexican front companies since 2003. On April 1, Hong Kong authorities agreed to verify each Mexican importer's credentials.

At the standard size of 60 milligrams, the Hong Kong pills would yield only 13.5 tons of pseudoephedrine a year.

Steve Suo: 503-221-8288; stevesuo@news.oregonian.com

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