The Council of Economic Advisers (CEA) recently announced that the opioid drug problem has reached crisis levels in the United States—in 2015, over 33,000 Americans died of a drug overdose involving opioids.
CEA finds that previous estimates of the economic cost of the opioid crisis greatly understate it by undervaluing the most important component of the loss—fatalities resulting from overdoses.
The CEA report estimates the economic cost of these deaths using conventional economic estimates for valuing life routinely used by U.S. Federal agencies. It also adjusts for underreporting of opioids in overdose deaths, includes heroin-related fatalities, and incorporates nonfatal costs of opioid misuse.
CEA estimates that in 2015, the economic cost of the opioid crisis was $504.0 billion, or 2.8 percent of GDP that year. This is over six times larger than the most recently estimated economic cost of the epidemic.
The Council of Economic Advisers, an agency within the Executive Office of the President, is charged with offering the President objective economic advice on the formulation of both domestic and international economic policy. The Council bases its recommendations and analysis on economic research and empirical evidence, using the best data available to support the President in setting our nation’s economic policy.