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Economic impact of addiction


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  • 1. The Economic Impact of Addiction
    Lisa M. Lines, MPH
    University of Massachusetts Medical School
    March 2011
  • 2. 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?
    Illicit drugs & nonmedical use of pharmaceutical drugs
  • 3. Which costs?
    The broadest estimates include all the costs associated with the following:
    Medical care: treatment for addiction & treatment for the health consequences of addiction (eg, cirrhosis of the liver)
    Criminal justice: enforcement of laws, consequences of property crimes, costs of incarceration
    Social services (eg, foster care for children of methamphetamine addicts)
    The substances or behaviors themselves
    Excess substance abuse-related deaths (lost earnings for addicts who die prematurely)
    Absenteeism and lost productivity (both for substance abusers and their families)
  • 4. Approaches to Calculating Cost of Illness
    Excess risks * costs associated with each consequence * prevalence
    Total amount spent in each category * percentage attributable to people with addictions
    Compare two matched cohorts, one with and one without condition – excess costs are attributed to condition
  • 5. 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?
  • 6. Estimates of the Economic Impact of Addiction
    Note: total does not account for overlap between addictions
  • 7. Direct and Indirect Costs of Alcohol, Tobacco, and Other Drugs by Category, 1999
    Source: Miller 2008
  • 8. Total Cost of Illness in Context
    Source: RTI 2006
  • 9. Actual Causes of Death, 2000
    Source: Mokdad 2006
  • 10. Total Direct Costs of Drug Abuse, 1992-2002
    Source: ONDCP 2004
  • 11. Source: ONDCP 2010
    Per Capita Costs of Drug Abuse by State, 2002
  • 12. Source: ONDCP 2010
    Price and Purity of Cocaine, 1981-2001
  • 13. Source: ONDCP 2010
    Price and Purity of Heroin, 1981-2007
  • 14. 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:
    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:
    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:
    Office of National Drug Control Policy. The National Drug Control Strategy: Data Supplement. 2010. Available at:
    RTI International. Cost of Illness Summaries for Selected Conditions. 2006. Available at