Elsevier

Drug and Alcohol Dependence

Volume 61, Issue 2, 1 January 2001, Pages 195-206
Drug and Alcohol Dependence

The economic costs of heroin addiction in the United States

https://doi.org/10.1016/S0376-8716(00)00162-9Get rights and content

Abstract

This study documents the costs of heroin addiction in the United States, both to the addict and society at large. Using a cost-of-illness approach, costs were estimated in four broad areas: medical care, lost productivity, crime, and social welfare. We estimate that the cost of heroin addiction in the United States was US$21.9 billion in 1996. Of these costs, productivity losses accounted for ∼US$11.5 billion (53%), criminal activities US$5.2 billion (24%), medical care US$5.0 billion (23%), and social welfare US$0.1 billion (0.5%). The large economic burden resulting from heroin addiction highlights the importance of investment in prevention and treatment.

Introduction

Over the years, several studies have estimated the economic costs of substance abuse, yet there are no published studies on the proportion of these costs that can be attributed to heroin addiction. While heroin use makes up only a small part of total illicit drug use (less than 5%), heroin is a highly addictive and devastating drug, thus its impact on society may surpass that of more widely used illicit drugs like marijuana. Moreover, heroin addiction treatment policy faces unique obstacles due to the fact that agonist treatment with methadone or LAAM — the most widely used and effective treatment available — continues to be highly regulated and politically controversial in the United States and many other countries. This study documents the tremendous costs of heroin addiction, both to the addict and society at large, thereby providing a context for the development of policies to prevent and treat heroin addiction. Although the study focuses on the United States, the consequences of heroin use are pervasive in many parts of the world.

The foundation for the estimates is the cost-of-illness methodology outlined by Hodgson and Meiners (1982). Hodgson and Meiners identify three types of costs that can be included in cost-of-illness studies: (1) direct costs; (2) indirect costs resulting from losses in output; and (3) psychosocial costs. Direct costs include medical care expenditures for diagnosis and treatment of the addiction and its medical sequelae as well as nonmedical expenditures occasioned by the illness, such as prison and law enforcement related costs. Indirect expenditures include loss of earnings due to premature mortality, incarceration, and reduced human capital. Our analysis excludes psychosocial costs (such as reductions in the quality of life of the heroin addict and members of his/her social network) because these costs, though very important, are extremely difficult to quantify.

The methods used in this study build upon prior cost-of-illness studies, particularly those focused on substance abuse (i.e. Rice et al., 1990, Merril et al., 1993, French and Martin, 1996, Harwood et al., 1998, Xie et al., 1998). The estimates are developed using an array of data sources, including secondary analyses of existing databases and literature reviews. Whenever possible, triangulation of various data sources is employed to build confidence in the estimates. The base-year for the estimates is 1996, because that is the year for which the most recent survey data are available.

In this paper, we begin by reviewing estimates of the prevalence of heroin addiction. Next, we present an overview of the economic costs of heroin addiction. Then, we present each component of the cost estimate and how it was derived. We conclude by discussing the nature and degree of uncertainty in the estimates and the implications of our results for policymakers.

Section snippets

Prevalence of heroin use

The prevalence of addiction is an important input in cost estimates. Unfortunately, prevalence statistics on heroin addiction are inexact due to the difficulty of surveying heroin users using traditional sampling techniques (Hughes, 1998. Personal communication, National Institute on Drug Abuse). In this study, we use the National Institutes of Health (1998) (NIH) Consensus Panel estimate that there were 600 000 heroin addicts in the United States in 1997 (NIH, 1997; National Consensus

Discussion

Our ‘best guess estimate’ of the total cost of heroin addiction in the United States in 1996 is US$21.9 billion. Of these costs, productivity losses accounted for 52.6%, criminal activities 23.9%, medical care 23.0%, and social welfare 0.5%. Costs generated using the most and least conservative assumptions range from US$19.6 to 33.4 billion

Acknowledgements

Support for this study was provided under contract to The MEDSTAT Group, Inc. and to Drs. Woody and Kleber by Integrated Therapeutics Group, Inc., a subsidiary of Schering-Plough Pharmaceuticals, 2000 Galloping Hill Road, K-6-2-D5B, Kenilworth, NJ 07033.

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