A couple of things
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You realize that analgesics like Tylenol #3 and #4 (with Codeine) are OTC in places like Canada, right?
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Umm... Nope, you can get Tylenol #1 OTC, but not 3 & 4. Those require a perscription. (Or so the ladyfriend says anyway, I don't really need that kind of pain killer on a regular basis
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As for pot. I say leagalise. The government could grow it themselves (like the Canadian government is trying to do in the mines up in Flin Flon). This creates a whole new industry, both growers and sellers. Or the government could do it themselves and use all the profits to fund R&D (could be channeled into medical research) and fighting the import of actual harmful drugs like crack.