The evolving opioid crisis

As the COVID-19 pandemic has swept across our country and claimed more than 100,000 lives in a few short months, the opioid epidemic, which dates back to at least the early 2000s, has received less attention. But the toll of the opioid crisis in the United States remains enormous by any measure. Opioid-related fatalities totaled more than 370,000 from 2009 to 2018. In addition to this tragic loss of life, the crisis has caused trillions of dollars of societal harm. In a recent American Enterprise Institute research paper, we detail the economic cost of the opioid crisis and investigate how these costs are distributed across the country and over time. We find that, while the crisis remains severe, there are signs of hope in some places.

Needles used for shooting heroin and other opioids along with other paraphernalia litter the ground in a park in the Kensington section of Philadelphia, Pennsylvania, U.S. October 26, 2017. REUTERS/Charles Mostoller – RC1991DFB570

Our work is built primarily on a value of statistical life (VSL) framework, an approach that assigns a value to each life lost to opioids, depending on an individual’s age. Academic economists have refined this methodology, and federal agencies such as the Department of Transportation employ this tool to evaluate the costs and benefits of various rules and regulations. Using these sources, we find that the VSL in the United States in 2018 ranged from $5.18 million for 55- to 62-year-olds to $14.59 million for 35- to 44-year-olds. To calculate fatality costs from the opioid epidemic, we multiply the number of opioid-related deaths for an age group by the associated VSL for that year and then sum across age groups. In 2018, we estimate 52,825 opioid-related deaths, an average VSL of $10.37 million, and total fatality costs of $602 billion.

Other costs from the opioid crisis exist as well. In particular, people
who misuse opioids often have higher healthcare costs, impose criminal justice
costs, and contribute to lost productivity. In 2018, we estimate these non-fatality
costs of the opioid crisis totaled $64 billion.

One positive sign is that the total 2018 cost ($666 billion) was $24
billion lower than the total cost in 2017. Nevertheless, the cumulative cost
from 2007 to 2018 was $5.6 trillion. The figure below plots fatality and
non-fatality costs per year during this period.

Source: Author’s calculations using CDC WONDER, Florence (2016), Aldy and Viscusi (2008), and Bureau of Transportation Statistics (2016)

While the aggregate annual cost of the opioid epidemic helps
policymakers understand the magnitude of the crisis, it leaves out a critical
detail: Where in the United States is this crisis most acute? And how is the
crisis evolving locally? We tackle these questions by carefully distributing
our national cost estimates to the regional and even county level.

Our results illustrate the important fact that the national trend
differs markedly from some local trends. For example, while the national
aggregate costs fell from 2017 to 2018, costs increased during this period in
19 states. In Arizona, Delaware, Maryland, Missouri, Montana, New Jersey,
Pennsylvania, South Carolina, and Vermont, the cost increased more $100 per
capita.

The opioid epidemic thus far has evolved in waves. The severity of prescription-related opioid abuse has diminished notably while the use of illegal opioids such as fentanyl and heroin has increased. Our research shows that the nature of this current wave is distinct from prior waves in part because how it spreads. Increased illegal opioid-related mortality is more likely to spill across county lines than prescription-opioid-related mortality. We therefore predict the public health impact of the next wave to become even more geographically diffuse, with smaller costs spread out over a larger geographic area. However, we also expect there will be clusters of counties with increasing illegal-opioid-related mortality rates. Policymakers should be prepared to adapt their interventions to the evolving geographic distribution of the opioid threat.

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