Nearly all of the focus on the opioid crisis gripping the nation has been on the human toll, with 14 Floridians a day dying from drug-related causes and twice that number experiencing non-fatal overdoses.
But the opioid epidemic has a whopping fiscal cost as well, according to a new report by the White House Council of Economic Advisers released this morning.
The report found that previous estimates of the economic costs associated with opioids “greatly understate” the true amount because they don’t include the economic impact of fatalities.
The report found that the economic impact of the opioid crisis was more than $500 billion in 2015, a six-fold increase over previous estimates.
Over 50,000 Americans died of drug overdoses in 2015, and 63 percent of those deaths involved opioids, according to the report.
“The problem is worsening at an alarming pace, with opioid-involved deaths doubling in the past ten years and quadrupling in the past sixteen,” the council wrote.
The new figure quantifies the costs of opioid-related deaths by relying on the “value of a statistical life,” figures usually used when evaluating “fatality-risk reduction” benefits of policies or proposals.
The numbers in the report, however, are certain to be questioned. The use of VSL is controversial. And the council adjusted the numbers of deaths in its total to reflect the under-reporting of opioid-related deaths by 14 percent, based on a 2014 study.
The authors of the report offered an explanation for why their estimates were so much higher than prior analyses.
The council relied on VSL and included heroin-related deaths as well as prescription drug deaths. The White House report also used the upward adjustment for under-reported deaths. And the opioid problem has worsened, the authors noted.
The report was aimed at giving policymakers the “economic analysis needed to review and assess” potential solutions to the opioid epidemic, the council wrote.
“A better understanding of the economic causes contributing to the crisis is crucial for evaluating the success of various interventions to combat it,” the report reads.
And the CEA concluded by pointing the finger at drug companies for contributing to the use of street drugs by hiking prices.
“Supply-side interventions that raise the economic costs of supplying legal prescriptions of opioids may have unintended consequences depending on the extent of demand side substitution induced towards illicit opioids,” the report concluded.