American Greed

New opioid law creates a business challenge for drug dealers — past performance suggests they are up to it

A new wave of synthetic opioids is creating a customer base that can’t walk away

A sweeping bill to attack the opioid crisis is headed to the president's desk, giving law enforcement new weapons to block the flow of drugs that were responsible for some 72,000 overdose deaths last year. But drug dealers are not likely to stand still, with a long history of shifting their business models to feed Americans' voracious demand for the drugs.

Among their tools are synthetic substitutes like fentanyl — which is 50 times more addictive than heroin — as well as dangerous new fentanyl derivatives that are just starting to show up in the U.S. market. The new legislation targets the synthetics as well as heroin and prescription painkillers, but there is little doubt that dealers will try to change their strategies yet again in response.

"Drug dealers are always making adjustments," Bridget Brennan, New York special narcotics prosecutor, said in an interview with CNBC's "American Greed."

"Whenever they perceive that law enforcement is closing in in one way, they move another way."

Brennan, a 20-year veteran of her post, oversees drug cases for the district attorney's offices in each of the city's five boroughs. Among her team's key tactics is targeting the profits of increasingly sophisticated drug rings.

"What we're really looking to do, our number one priority, is to take the poison off the street," she said. Disrupting dealers' corporate structures is part of that effort.

As illicit and devastating as the drug trade might be, it is, after all, a business. And drug dealers, like any business people, are adept at adapting to changing market conditions.

Take teenage aspiring drug lord Lance Barabas, who ran an interstate drug ring along with his older brothers Larry and Landon, their friend Douglas Dodd, and others, distributing nearly 150,000 oxycodone pills in a two-year period.

"They were on the verge of making millions," journalist Guy Lawson told "American Greed."

Lawson first profiled the crew in a 2015 article for Rolling Stone.

"They were making tens and hundreds of thousands of dollars. They were making, to kids, infinite amounts of money," Lawson said.

The boys spend the money much the way one might expect college kids to spend it — lots of parties, fancy cars, booze, and more drugs. But they managed to pay for it all by using some savvy — if sometimes rudimentary — business practices.

The boys found a ready supply of the drugs in their home state of Florida.

"Florida was ground zero of the prescription pain pill epidemic," Dodd told "American Greed." "They were very abundant down here."

"There was no other state like this. In Florida, there was more pain management clinics than there was McDonald's," Landon Barabas recalled.

As college wrestlers, scoring pills was as simple as faking an injury.

"It was like a golden ticket," Barabas recalled. "I went back to my doctor's … and walked out of there with like 500 pills."

The boys knew all of that supply in Florida would tend to depress the price, so they began shipping the drugs to Tennessee, where Landon was attending college. There, the drugs could bring four to five times the price the boys paid for them in Florida. To avoid detection, they would send the drugs to Tennessee in "care packages" disguised as vitamins. The profits came back to Florida in cash, stuffed into teddy bears.

Worse than the real thing

The new fentanyl trade works on a much larger, more damaging scale. And it is constantly changing.

"It started with addictive pills, and then we saw the Mexican cartels jumping on America's enormous appetite for opioids and pushing heroin right across the border and flooding our streets with heroin," prosecutor Brennan said. "Now we're seeing fentanyl, which is 50 times more deadly, coming from China then to Mexico and across to the U.S."

But as law enforcement moves against fentanyl, that supply chain is changing as well.

"We see Mexico getting the precursor chemicals, the ingredients for fentanyl, manufacturing it itself, and then pushing it right across the border into the U.S.," Brennan said.

The ingredients are coming largely from legitimate Chinese pharmaceutical manufacturers. But because the substances are lightly regulated in China, it is easy for dealers to illicitly smuggle them overseas. Fentanyl dealers are hiding their product in everyday items like greeting cards and women's lingerie.

"The cartels are really avid businessmen," Brennan said. "They have a product. They want to maximize the product and they're going to do everything they can in order to accomplish that."

The next frontier

The new fentanyl derivatives, or analogues, are the next step in the business plan, and they have authorities especially alarmed.

"Little tweaks on the fentanyl molecule create a substance ever more deadly," Brennan said. "It's so deadly and so potent that you don't need much in order to start a criminal trafficking ring."

Some fentanyl analogues are so potent that an amount as small as a single grain of sand can kill. Drug dealers can sell fentanyl and fentanyl analogues in pure form, or they can use it to extend their supply of heroin.

"Heroin is a lot more expensive than fentanyl. It goes for about $55,000 a kilo where fentanyl may be $5,000-$10,000 a kilo," Brennan said. "So to extend the heroin they may add a little bit, hopefully just a little bit of fentanyl and they will mix it with heroin."

And shrewd dealers are using fentanyl and its derivatives to extend their supplies of all kinds of drugs.

"We are now finding fentanyl mixed in with cocaine, pressed into pills, masquerading as ecstasy, all because it's so cheap," Brennan said. "That's the business model that drug dealers rely on. Buy low, sell high and create a consumer base that cannot say no."

The young Florida drug dealers were novices, making enough mistakes that authorities caught on relatively quickly. More than a dozen people were convicted on various drug trafficking charges. Kingpin Lance Barabas, now 30, has five years left on his 15-year prison sentence. His brothers Larry and Landon were sentenced to seven and six years, respectively. Dodd wrote a book about his experience in the drug ring, "Generation Oxy: From High School Wrestlers to Pain Pill Kingpins."

But for every drug dealer that authorities take off of the streets, many more are ready to take their place. That is because the opioid business offers a key benefit over legitimate businesses when it comes to the laws of supply and demand. Under normal economics, a glut of supply lowers prices and hurts business. Not so for opioids.

"When there is an excess of supply in opioid drugs, whatever they are, if it's addictive prescription pills or if it's heroin or fentanyl, you're going to see demand surging because people easily become addicted to these substances," Brennan said.

In other words, when it comes to opioids, more supply means greater demand. As a business model, it is hard to beat — if you do not care how you are making your money.

Go along on the wild ride of the Baby-faced Drug Lords on an ALL NEW episode of "American Greed," Monday, Oct. 8 at 10pm ET/PT only on CNBC. And grab a little extra Greed for yourself by subscribing to the exclusive "American Greed" podcast.

Correction: This article has been updated to accurately reflect New York Special Narcotics Prosecutor Bridget Brennan's view that demand, not enforcement efforts, is the primary factor in the rise of synthetic opioids.