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Alcohol and Drug Abuse Costs U.S. $246 billion, Says NIH Report


May-June 1998

The annual economic cost of alcohol and drug abuse in 1992 was an estimated $246 billion, the most recent year for which sufficient data were available, according to a study released on May 13 commissioned by the National Institute on Drug Abuse (NIDA) and the National Institute on Alcohol Abuse and Alcoholism (NIAAA). NIDA and NIAAA are two institutes of the National Institutes of Health (NIH). The study reports that alcohol abuse and alcoholism accounted for 60% of the estimated costs ($148 billion), while drug abuse and dependence accounted for the remaining 40% ($98 billion) (Henrick Harwood, Douglas Fountain and Gina Livermore, "The Economic Costs of Alcohol and Drug Abuse in the United States, 1992," National Institutes of Health, May 1998).

NIAAA Director Enoch Gordis, M.D., said, "The magnitude of these costs underscores the need to find better ways to prevent and treat these disorders." NIDA Director Alan I. Leshner, Ph.D., said, "The rising costs from these and other drug-related public health issues warrant a strong, consistent, and continuous investment in research on prevention and treatment."

After accounting for inflation and population growth, the 1992 estimated costs are 42% higher due to alcohol abuse and 50% higher due to drug use than the estimates reported for 1985, the most recent previous comprehensive estimate of these costs. Over 80% of the increase in estimated costs for alcohol abuse can be attributed to changes in data and methodology employed in the new study, which suggests that the previous study significantly underestimated the costs of alcohol abuse. In contrast, over 80% of the increase in estimated costs of drug abuse is due to changes in drug-related emergency room episodes, criminal justice expenditures, and service delivery patterns.

After comparing their current findings to four major cost studies conducted in the past two decades, the authors concluded that the alcohol estimates for 1992 were very similar to the average of cost estimates produced over the past 20 years. Cost estimates for alcohol abuse were $186 billion and $104 billion for 1980 and 1985, respectively. Estimates of the costs of drug abuse, however, have shown a consistent increase since 1977. The authors state that rising drug abuse costs can be explained by the emergence of the cocaine and HIV epidemics, an eightfold increase in State and Federal incarcerations for drug offenses, and about a threefold increase in crimes attributed to drugs.

The distribution of alcohol and drug costs differed significantly. Two-thirds of the $148 billion costs of alcohol abuse related to lost productivity, either due to alcohol-related illness (45.7%) or premature death (21.2%). Most of the remaining costs of alcohol abuse were in the form of health care expenditures to treat alcohol use disorders and the medical consequences of alcohol consumption (12.7%), property and administrative costs of alcohol-related motor vehicle crashes (9.2%), and various additional costs of alcohol-related crime (8.6%).

For drug abuse, more than one-half of the $98 billion estimated costs were associated with drug-related crime. These costs included lost productivity of victims and incarcerated perpetrators of drug-related crimes (20.4%); lost legitimate production due to drug-related crime careers (19.7%); and other costs of drug-related crime, including Federal drug traffic control, property damage, and police, legal, and corrections services (18.4%). Most of the remaining costs of drug abuse resulted from premature deaths (14.9%), lost productivity due to drug-related illness (14.5%), and health care expenditures (10.2%). [A worthwhile project would be to analyze this cost data differently to determine whether policies such as mandatory minimum sentences or prohibition increase the social costs of drug use. -- EES]

"Much of the economic burden of alcohol and drug problems falls on the population that does not abuse alcohol and drugs," said study author Henrick Harwood and his colleagues at The Lewin Group, the contractors for the study. About 45% of the costs of alcohol abuse is borne by those who abuse alcohol and members of their households; 39% by Federal, State, and local governments; 10% by private insurance; and 6% by victims of abusers. For drug abuse, 44% of the cost burden is carried by those who abuse drugs and members of their households, 46% by governments, 3% by private insurance, and 7% by victims of drug abusers.

By adjusting the 1992 estimates for population growth and inflation, the authors estimated that the 1995 costs to society were $276 billion.

National Institute on Drug Abuse, press office- 5600 Fishers Lane, Rockville, MD 20857, Tel: (301) 443-6245.

National Institute on Alcohol Abuse and Alcoholism, press office - 6000 Executive Blvd., Bethesda, MD 20892-7003, Tel: (301) 443-3860.

Henrick Harwood, The Lewin Group - 9302 Lee Hwy., Fairfax, VA 22031-1214, Tel: (703) 218-5635.