The Economic Impact of AddictionLisa M. Lines, MPHUniversity of Massachusetts Medical SchoolMarch 2011

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Definitions

•The economic impact of addiction is the cost associated with substance abuse and addiction as expressed in dollars▫Dollars spent (aka direct or resource costs)▫Dollars not earned (aka indirect or

productivity costs)•Which addictions?

▫Alcohol▫Tobacco▫Illicit drugs & nonmedical use of

pharmaceutical drugs▫Gambling

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Which costs?

The broadest estimates include all the costs associated with the following:Direct1. Medical care: treatment for addiction & treatment for the

health consequences of addiction (eg, cirrhosis of the liver)2. Criminal justice: enforcement of laws, consequences of

property crimes, costs of incarceration3. Social services (eg, foster care for children of

methamphetamine addicts) 4. The substances or behaviors themselvesIndirect5. Excess substance abuse-related deaths (lost earnings for

addicts who die prematurely)6. Absenteeism and lost productivity (both for substance

abusers and their families)

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Approaches to Calculating Cost of Illness•Bottom-up

▫Excess risks * costs associated with each consequence * prevalence

•Top-down▫Total amount spent in each category *

percentage attributable to people with addictions

•Econometric ▫Compare two matched cohorts, one with

and one without condition – excess costs are attributed to condition

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Caveats

• Difficult to determine whether costs incurred by an individual substance user are related to addiction per se▫ For example, not everyone who has an alcohol-related car

accident is necessarily addicted to or dependent on alcohol in a physical sense

• Many people have multiple addictions▫ Somewhat misleading to simply sum up the costs

associated with each addiction and call that the total economic impact of addiction; in reality, the total is likely to be less than the sum of its parts

• Difficult to determine causal relationships between addiction and some of the costs associated with addiction▫ Do criminals gamble, or do gamblers become criminals? Or

is there a separate causal factor that results in both gambling and crime?

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Estimates of the Economic Impact of Addiction

Total Cost in Billions Est. Year

Total Cost in Billions, 2011 $ Source (Original Source)

Alcohol abuse $184.6 1998 $251.06 RTI 2006 (Harwood)

$191.6 1999 $254.83 Miller 2008 (Harwood 2000)

Tobacco use $157.7 1999 $209.74 RTI 2006 (CDC)

$167.8 1999 $223.17 Miller 2008 (Harwood 2000)

Other drug abuse $151.4 1999 $201.36 Miller 2008 (Harwood 2000)

$180.6 2002 $222.14 ONDCP 2004

Gambling $5 2002 $6.15 NGISC 1999

$40 1999 $53.20 Grinols 2001

Total (low end) $668.31

Total (high end) $753.34

Note: total does not account for overlap between addictions

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Direct and Indirect Costs of Alcohol, Tobacco, and Other Drugs by Category, 1999

Source: Miller 2008

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Total Cost (2002 $, millions)

Cardiovascular disease 393.5Motor vehicle accidents 230.6Musculoskeletal 214.9Cancer 189.8Alcohol abuse 184.6Drug abuse 180.8Smoking 157.7Mental disorders 147.8Lung disease 131.9Obesity 99.2

Total Cost of Illness in Context

Source: RTI 2006

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Number of Deaths Percent of DeathsTobacco 435,000 18.1Poor diet & physical inactivity 400,000 16.6Alcohol consumption 85,000 3.5Microbial agents 75,000 3.1Toxic agents 55,000 2.3Motor vehicles 43,000 1.8Firearms 29,000 1.2Sexual behavior 20,000 0.8Illicit drug use 17,000 0.7

Actual Causes of Death, 2000

Source: Mokdad 2006

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Total Direct Costs of Drug Abuse, 1992-2002

Source: ONDCP 2004

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Source: ONDCP 2010

Per Capita Costs of Drug Abuse by State, 2002

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Source: ONDCP 2010

Price and Purity of Cocaine, 1981-2001

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Source: ONDCP 2010

Price and Purity of Heroin, 1981-2007

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Sources

• Grinols EL, Mustard DB. Business Profitability versus Social Profitability: Evaluating Industries with Externalities, the Case of Casinos. Managerial and Decision Economics. 2001:22(1-3);143-162.

• Miller TR, Hendrie D. Substance Abuse Prevention Dollars and Cents: A Cost-Benefit Analysis, DHHS Pub. No. (SMA) 07-4298. Rockville, MD: Center for Substance Abuse Prevention, Substance Abuse and Mental Health Services Administration, 2008. Available at: http://store.samhsa.gov/shin/content//SMA07-4298/SMA07-4298.pdf

• Mokdad AH, Marks JS, Stroup DF, Gerberding JL. Actual causes of death in the United States, 2000. JAMA. 2004 Mar 10;291(10):1238-45.

• National Gambling Impact Study Commission. Final Report to Congress. 1999. Available at: http://govinfo.library.unt.edu/ngisc/reports/fullrpt.html

• Office of National Drug Control Policy. The Economic Costs of Drug Abuse in the United States, 1992-2002. 2004. Washington, DC: Executive Office of the President (Publication No. 207303). Available at: http://www.ncjrs.gov/ondcppubs/publications/pdf/economic_costs.pdf.

• Office of National Drug Control Policy. The National Drug Control Strategy: Data Supplement. 2010. Available at: http://www.whitehousedrugpolicy.gov/publications/policy/ndcs10/ndcs10_data_supl/index.html

• RTI International. Cost of Illness Summaries for Selected Conditions. 2006. Available at http://www.rti.org/page.cfm?objectid=CA1E1F48-8B6C-4F07-849D6A4C12CBF3C3