Totaling the Costs of the Opioid Epidemic

Eakinomics: Totaling the Costs of the Opioid Epidemic The opioid epidemic remains a scourge masked by the attention devoted to the COVID-19 pandemic. Synthetic opioids (especially fentanyl) were responsible for two-thirds of the 100,000 deaths due to drug overdoses in the year ending June 2021. That was an increase of 30 percent from a year earlier, according to a report issued earlier this week by the Commission on Combating Synthetic Opioid Trafficking (“Commission”). The Commission was created by the 2020 National Defense Authorization Act (NDAA) and was tasked with developing a consensus on a strategic approach to combating the illegal flow of synthetic opioids into the United States. But the Commission also writes: “Drug overdose deaths do more than cause tragic and unnecessary deaths. They also harm the national economy. In 2018, according to the White House Council of Economic Advisers, the cost of overdose fatalities was $696 billion, despite being roughly two-thirds of annual overdose deaths today. It is therefore reasonable to estimate that drug overdoses are now costing the United States approximately $1 trillion annually.” And it concludes: “the Commission finds the trafficking of synthetic drugs into the United States to be not just a public health emergency but a national emergency that threatens both the national security and economic wellbeing of the country.” That certainly seems like the right bottom line and suggests the problem has ballooned in the past several years. The last time AAF looked at the economic impact of the opioid epidemic in 2018, the impact estimated was that between 1999-2015, the decline in labor force participation cumulatively cost the economy 27 billion work hours, slowed the real annual economic growth rate by 0.6 percentage points, and cumulatively cost nearly $1.6 trillion in real output. In 2015, lost economic output was “just” $91.6 billion. The Commission estimates the cost is now 10 times greater than it was just half a decade ago. What, then, is to be done? The Commission summarizes its recommendations as consisting of five pillars. Pillar 1: Policy coordination and implementation; Pillar 2: Supply reduction; Pillar 3: Demand reduction and public health; Pillar 4: International cooperation; and Pillar 5: Research and monitoring. This is pretty underwhelming. Reduce supply and reduce demand, which will require international cooperation. Be efficient internally with coordinated efforts and stay ahead of trends with research and monitoring. Certainly, it could work. But it also sounds a lot like a set of conclusions that could have been drawn in 2021, 2020, 2019, 2018 … and we still have the opioid scourge. The Commission was drawn from Congress and the federal agencies. Perhaps it is time for a truly independent group to take a fresh look at the problem.