The Economic Consequences of Opioid Addiction in America

As many of the costs are borne by state and local governments, the impact varies
significantly across the country, with some areas affected much worse than others.
Significant costs also arise from providing health-care to victims. In 2014 alone, there
were over 80,000 emergency room visits and over 60,000 hospitalizations due to opioid
overdoses. Medicare and Medicaid were the primary payers in around two-thirds of
these cases.
As noted in the OECD Economic Survey of United States, opioid use and opioid-related
death rates appear to be considerably higher in the U.S. than in other OECD countries.
This is partly explained by the greater prevalence of opioids in the United States, where
prescription rates are four times higher on average than in other OECD countries.
While causation is difficult to establish, the correlation with the proportion of people
unemployed or not looking for work in the U.S. in areas most affected by opioids
suggests that this can ultimately lower participation in the labor force.
Indeed, economist Alan Krueger found that around 20 percent of males between the
ages of 25 and 54 who were neither working nor looking for work were regularly taking
opioid painkillers.
When addiction leads to criminality, the consequences of a felony record can drastically
reduce employment possibilities. Public outlays are also incurred through costs for
policing, law enforcement and other public services in dealing with drug overdoses and
addiction treatment. This includes taking children into care when parental neglect
occurs.
An analysis by the White House Council of Economic Advisers — using an approach
that attempts to calculate the economic costs of loss of life — suggests that the overall
cost of the crisis to the U.S. economy in 2015 was over $500 billion, or around 3 percent
of GDP.
The OECD has highlighted several immediate policy steps that can be taken to help
stem the crisis: First, to address the immediate challenge, making drugs that can
reverse the effects of overdoses more widely available will help reduce avoidable
deaths.
Second, efforts to tighten access to opioids will reduce the inflow of patients and others
developing opioid dependence. Third, for those already suffering from addiction,
medically-assisted treatments are proven options, but may require relaxing
administrative barriers in order to expand their reach.
Finally, these efforts will need to be complemented by re-integrating former addicts into
employment and housing to prevent relapse.
The tragic loss of life and enormous impact on society and the economy are more than
enough justification to urge policymakers into action. Indeed, the current administration
Page 120 of 159