Economic Costs of Substance Abuse, 1995


Dorothy P. Rice, Sc.D., 3333 California Street, Room 340, San Francisco, CA 94118.


Substance abuse causes illness and disease, results in high use of medical and other services and high productivity losses, and imposes a multibillion-dollar burden on the economy each year. This article presents estimates of the economic burden of alcohol and drug abuse and smoking in 1995. Included are the direct medical care expenditures and indirect costs and the value of lost productivity for people who are ill and disabled and for people who die prematurely due to substance abuse. The methodology for the cost of alcohol and drug abuse is based on a study conducted by the Lewin Group in 1998 and prepared for the National Institute on Drug Abuse and the National Institute on Alcohol Abuse and Alcoholism. The smoking-attributable costs are based on a published study conducted by the author and her colleagues at University of California-Berkeley and at University of California-San Francisco for 1993 and updated to 1995. The total economic costs of substance abuse are estimated at $428.1 billion in 1995: alcohol abuse at $175.9 billion, drug abuse at $114.2 billion, and smoking at $138 billion. The distribution by type of cost varies among the three types of disorders, reflecting differences in the prevalence of these disorders, medical care use, morbidity and mortality patterns, and other related costs for each disorder. Effective interventions must be found to prevent and ameliorate the adverse health consequences of substance abuse, thereby reducing the future high costs of alcohol and drug abuse and smoking.