Economic Costs of Alcohol and Drug Abuse Estimated at $246 Billion in The United States

National Institute on Drug Abuse, National Institute on Alcohol Abuse and AlcoholismFOR IMMEDIATE RELEASE, Wednesday, May 13, 1998, NIDA Press Office, 301-443-6245, NIAAA Press Office, 301-443-3860

A new study released today by the National Institute on Drug Abuse (NIDA) and the National Institute on Alcohol Abuse and Alcoholism (NIAAA), National Institutes of Health (NIH), estimates that the economic cost of alcohol and drug abuse was $246 billion in 1992, the most recent year for which sufficient data were available. This estimate represents $965 for every man, woman, and child living in the United States in 1992. The new study reports that alcohol abuse and alcoholism generated about 60 percent of the estimated costs ($148 billion), while drug abuse and dependence accounted for the remaining 40 percent ($98 billion).

"This study confirms the enormous damage done to society by alcohol- and drug-related problems," said NIAAA Director Enoch Gordis, M.D. "The magnitude of these costs underscores the need to find better ways to prevent and treat these disorders."

"Substance abuse and addiction have serious medical and social consequences," said NIDA Director Alan I. Leshner, Ph.D. "This study indicates that emergence of health problems from the cocaine and HIV epidemics during this period substantially increased drug-related costs to society. 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."

Prior to this study, the most recent comprehensive estimates of these costs were based on data for 1985. The new estimates are 42 percent higher for alcohol and 50 percent higher for drugs than the estimates reported in the earlier study, after accounting for the increases that would be expected due to inflation and population growth. Over 80 percent of the increase in estimated costs of alcohol abuse can be attributed to changes in data and methodology employed in the new study; this suggests that the previous study significantly underestimated the costs of alcohol abuse. In contrast, over 80 percent of the increase in estimated costs of drug abuse is due to real changes in drug-related emergency room episodes, criminal justice expenditures, and service delivery patterns.

The authors also reviewed other earlier cost-to-society research. After comparing their current findings to the four major cost studies conducted in the past two decades, again adjusting for inflation and population growth, they concluded that the alcohol estimates for 1992 were very similar to the average of cost estimates produced over the past 20 years.

Estimates of the costs of drug abuse, however, have shown a steady and strong pattern of 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 three-fold increase in crimes attributed to drugs.

The distribution of alcohol and drug costs differed significantly. Two-thirds of the costs of alcohol abuse related to lost productivity, either due to alcohol-related illness (45.7 percent) or premature death (21.2 percent). 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 percent), property and administrative costs of alcohol-related motor vehicle crashes (9.2 percent), and various additional costs of alcohol-related crime (8.6 percent).

For drug abuse, more than one-half of the estimated costs were associated with drug-related crime. These costs included lost productivity of victims and incarcerated perpetrators of drug-related crimes (20.4 percent); lost legitimate production due to drug-related crime careers (19.7 percent); and other costs of drug-related crime, including Federal drug traffic control, property damage, and police, legal, and corrections services (18.4 percent). Most of the remaining costs of drug abuse resulted from premature deaths (14.9 percent), lost productivity due to drug-related illness (14.5 percent), and health care expenditures (10.2 percent).

"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. About 45 percent of the costs of alcohol abuse is borne by those who abuse alcohol and members of their households; 39 percent by Federal, State, and local governments; 10 percent by private insurance; and 6 percent by victims of abusers. For drug abuse, 44 percent of the cost burden is carried by those who abuse drugs and members of their households, 46 percent by governments, 3 percent by private insurance, and 7 percent by victims of drug abusers.

Because population increases and inflation have increased the costs further since 1992, the study authors also projected the costs for alcohol and drug abuse for 1995. By adjusting the 1992 estimates for population growth and inflation, they estimated that the 1995 costs to society were $276 billion.

NIDA and NIAAA are two of the 18 Institutes that comprise the National Institutes of Health, the Nation's lead agency for biomedical and behavioral health research. NIH is a component of the U.S. Department of Health and Human Services.