Economic Toll Of Opioid Epidemic: $1.3 Trillion A Year

Sam Rivera used to wake up every morning and brace himself for the inevitable call: another person found dead of an opioid overdose in a park or a bathroom or an alley. But that started to change on Nov. 30, when New York City opened two overdose prevention centers where people can use drugs under the observation of trained staff who intervene if things go bad. 

“I haven’t had that call in seven weeks, which is really mind-blowing,” says Rivera, the executive director of OnPoint NYC, the nonprofit group that runs the sites. 

OnPoint NYC’s 642 registered participants have come to the overdose prevention center 6,184 times. Through Feb. 1, the center says it has reversed a total of 127 overdoses. 

It’s a small success story in a larger, grim trajectory. There were 70,168 opioid overdose deaths in the U.S. in 2020, up 37% from the previous year, and more than 538,000 people have died since 1999. A new report Wednesday in The Lancet warned that more than 1.2 million people could die from opioid overdoses in the U.S. and Canada by 2029 if no action is taken. 

The growing epidemic comes at a tremendous cost, not just in the number of lives lost, but in the economic burden to society. Economists from the Centers for Disease Control and Prevention have estimated the total cost of the combination of people living with opioid-use disorder and people who died from fatal overdoses in the U.S. topped $1 trillion in 2017. That year, 2.1 million people were diagnosed with opioid-use disorder and 47,000 people died. With more than 70,000 deaths in 2020, the ballpark cost of the opioid epidemic is now more than $1.3 trillion and rising, according to a Forbes estimate using the same approach as the CDC. 

Knowing the costs to society is valuable because it can serve as a guide to how much we could spend to counter it. “If we had policies that could reduce these risks, what would it be worth to do it?” says Kip Viscusi, a professor of law, economics and management at Vanderbilt University. “From that standpoint, it is meaningful.”

Viscusi has spent more than 40 years figuring out how to analyze the costs and benefits of reducing risks as they relate to government regulation. During the Reagan administration of the 1980s, he was instrumental in establishing what’s known as the value of a statistical life. “The government is not saving lives,” he says. Instead, the government “enacts policies that decrease the risk of death.” What the value of a statistical life captures is “how much compensation people need to accept small risks of death.” Viscusi pegs that to around $11 million today. 

For purposes of the CDC’s model, the value of a statistical life in 2017 was $10.1 million. That combined with $1.4 million in lost productivity and $5,500 in spending on healthcare meant that the cost per case of a fatal opioid overdose came in around $11.5 million. For a person who is addicted to opioids, the CDC calculated the reduced quality of life at $183,000, lost productivity and healthcare costs at $14,700 each, criminal justice cost at $7,000 and substance-use treatment at over $1,600. The total cost for someone living with opioid addiction was around $221,200.

“This is a conservative estimate of the impact, because we can’t say a lot about the long-term consequences,” says Curtis Florence, who authored the study and leads the economics team for the data analytics branch in the CDC’s division of Injury Prevention & Control. The model can help evaluate the cost of measures to prevent opioid addiction and death relative to the economic impact. “If you look at our $1 trillion estimate, what you could say is, if we could eliminate this problem, the value generated by eliminating this problem would be at least $1 trillion.”

In November, the Biden administration released an overview of its first-year priorities related to the opioid epidemic, including $4 billion in the American Rescue Plan for increasing access to mental health and substance abuse services. It also noted that setting aside $30 million for harm reduction was “a historic amount that will enhance interventions like syringe services programs.” 

The Biden administration hasn’t taken a stance on safe consumption sites like the ones in New York City, which remain illegal under the federal “crack house” law that makes it a felony to lease or rent any place for the use of illegal drugs. In New York, the Biden administration has seemingly deferred to the city by not enforcing the federal statute and shutting down the program. 

Rivera says it’s time for the White House to “step up” and acknowledge safe consumption sites “as a successful, proven health intervention.” 

“As cities become as courageous as New York and start to open anyway, they’re going to have no choice but to make this acknowledgement,”  Rivera says, “and allow people to continue to save lives the way we are.”