I’m not sure drugs are that perfect of a market. The buyer doesn’t really have visibility into price/quality across sellers and drug buyers are not always rational, two conditions for perfect competition.[1]
Actual economics is far more complex than the simple supply/demand curve taught in 101 classes.
Sure, it certainly won't immediately adjust perfectly, but when authorities close some route or bust a large shipment, there will likely be some price change because of limited supply, increased risk (and cost) for transportation, right. It's not like drug buyers will just say "oh, you don't have any this month? okay, see you in six weeks".
Reducing supply will remove money from the economy, although less than the amount of money that was taken (the same happens whenever the government levies a tax).
