See you had a different interpretation of the pill than I did. I took it as a one-time cure all.
If it removes free-will, it is a punishment in and of itself.
If it is a removal of free will, then it REPLACES prison populations as the primary form of punishment (I'm FAR more terrified of loss of intelectual freedom than I am of the loss of physical freedom.) and therefore can be considered a true deterrent.
If it "cures" an illness, then there really is no such thingas a deterrent since it is a disease that causes crinminality, not free-will.
Either way, the Pill itself can be considered a deterrent in the hypothetical reality.