Economic Impact Of Addiction In The United States

Everyone knows that addiction causes emotional, mental, physical, and economic stress. This applies to a person experiencing addiction, as well as others around them. The plight of addiction causes a huge economic burden on our communities, states, and even the entire country, in addition to the personal impact it has on individuals and their loved ones.

There are many ways in which addiction is a problem on an economic basis, including through treatment programs and groups, the criminal justice system, healthcare, productivity, the legal system, and more. We will look at each of these issues through a lens of the United States and economic policy in order to understand exactly what addiction means on a dollar basis for those who reside in the country.

Drug Prevention And Treatment

Drug abuse requires a large number of monetary resources to implement prevention programs, intervention programs, education, treatment, and rehabilitation. That said, while this does require a large portion of money, when it works to prevent drug abuse, it can make up the money from other costs that would occur otherwise. That doesn’t mean that it’s always worth the money, but when it changes the direction of someone’s life, it can actually save money in the long run.

The most frequently reported drugs used by those entering treatment include marijuana, cocaine, and heroin. Estimates show that about one in six substance abusers receives treatment, which results in a cost of billions worldwide. Research that was conducted recently goes on to show that that goes into treatment funding actually has a return of anywhere from ” to ” in reduced health care and crime costs.

Hospitalization and Healthcare

Drug abusers often require hospital visits that are costly to the community. These visits are often related to psychotic episodes, adverse reactions, overdoses, or infectious diseases transmitted through drug injections. Hospitals also spend a significant amount of money treating victims of crimes perpetrated by drug users. The result of this is a huge debt that is the result of individuals using drugs and alcohol in an irresponsible manner.

A report from the U.S. Surgeon General said that, “Alcohol and drug misuse and related disorders are major public health challenges that are taking an enormous toll on individuals, families, and society. Neighborhoods and communities as a whole are also suffering as a result of alcohol- and drug-related crime and violence, abuse and neglect of children, and the increased costs of health care associated with substance misuse.”

Based on information from the Center for Medicaid and CHIP Services, in 2009 health insurances spent 4 billion treating substance misuse, with a fifth of that coming from Medicaid funding as 12% of those under Medicaid have an alcohol or drug habit. That’s a large amount of people and a significant amount of money, with all of the money having to come from somewhere, largely taxpayers.


People under the influence of drugs and alcohol often pose significant safety issues and costs to the environment and the people around them. Driving accidents caused by drug using individuals are a major threat, and the problem is only escalating. In recent years, the impacts to the environment that occur as a result of drug production and manufacturing have also emerged as costs to the land we live on. These things add up to dollars, as well. Taxpayer money is having to go towards fixing land and housing that is uninhabitable or unusable due to actions related to drug manufacturing.


Research has found three significant links between crime and drug use. The first of these is called psychopharmacological crime, which is a crime committed while under the influence of drugs. Studies show that in some locations as many as 55% of offenders were under the influence when the crime was committed, with 19% saying they would have committed the crime even if sober.

Another link is economic compulsive crime. This is the type of crime where a person who is addicted to alcohol or drugs engages in crime in order to support their habit. 17% of United States state prisoners and 19% of federal inmates admitted to committing their crime in order to obtain cash to buy drugs.

The third major link is systemic crime, such as violence over drug turf, fighting between users and sellers, and other similar crimes. This is most common in Latin America, but takes place in the United States on an increasingly regular basis, as well.

In total, it is believed that drug crime costs the United States more than layout0 billion a year. These costs relate to needing more law enforcement officials, as well as increased rates of incarceration.

Beyond criminal issues, there are other problems that are related to the legal system that addicts are more frequently a part of. For instance, a person who has legal problems and also is struggling with drug addiction may risk losing professional licenses, which can lead to a much harder time finding a job in the future.

Labor and Productivity

Productivity losses are calculated by determining what would have been expected from someone in productivity if they were not using drugs. In the United States, this is a huge number, with an estimated loss of “0 billion in 2011 alone, according to the International Narcotics Control Board. This makes up more than half of all drug related costs. When taking that into consideration, this issue is more than health related costs due to morbidity, physician visits, and other consequences.

However, the Partnership for Drug Free Kids believes the number is much higher with a cost of over 75 billion in a year.

In addition to this, those who work under the influence of drugs or alcohol are at a higher risk of injury, which can lead to unemployment and lost income. Drugs may also lead to missed deadlines, oversights, and errors that end up costing an employer money or their job. Of course, there is some level of setback possible for any employee, but these terms are much higher for those who are abusing substances.

Treatment, Hospitalization, Incarceration

When someone is in prison or in treatment, they will be unlikely to be participating in education, training, or work – something that adds to the loss that occurs from the costs of treatment or jail. This may vary based on how many employment opportunities are available at a specific time, but is still worth noting and being aware of.

The National Institute on Drug Abuse has said that “the average cost for 1 full year of methadone maintenance treatment is approximately “,700 per patient, whereas one full year of imprisonment costs approximately 4,000 per person.”

The earlier someone seeks long term treatment, the better the outcome for everyone. As an individual continues to abuse drugs, the substances have a more and more damaging effect on their body, which makes it more likely they will need medical treatment in the future. Treatment also has positive social implications as someone who overcomes their addiction may stay away from situations that lead to social and government issues and expenses.

Impact On Various Populations

Drug and alcohol addiction has an effect on certain populations to a higher extent than the general population. We discuss some of these populations and how they fit into the puzzle below.

Low-Income Individuals

Poverty and drug abuse are linked in many ways. In many cases, drugs are used as a gateway to reduce the stress that poverty brings. In addition, in neighborhoods that are of lower income, there are often fewer points of access to health care, support systems, and community organizations.

Drug addiction can also work in an inverse way, as drug abuse can lead someone to spend more money and be pulled into poverty. This can lead to a lack of care for family, friends, and responsibilities that used to be properly taken care of.

In addition, those who are using drugs are typically unable to put away money which helps ensure future stability. As any extra money is spent on alcohol or drugs, this money that ensures retirement or a down payment on a house is not available. In addition, addicts in this situation may choose to spend their 401K, IRA, or savings in order to buy more drugs or pay debts related to drugs.


There are gender differences that act as determinants to the development of addictive behaviors, which include alcoholism and drug abuse. Women are affected by certain problems related to drug abuse on a larger scale than their male counterparts, especially when considering domestic violence and sexual assault. Women are also more likely to be the victims of crime facilitated by drug abuse.


Children who are exposed to drugs while still in their mother’s womb often experience physical, emotional, and psychological disorders later on in life. They may also require extensive care after birth due to these problems. This leads to higher costs to society as well as personal expenses. In addition, these children have a higher risk of being abused, sexually or physically, and are more likely to experience neglect from their abusing parents. Higher rates of attention problems, delinquency, depression and anxiety in young adults are also noted.

Children with parents who abuse drugs are more likely to live in homes with friends, strangers, or relatives who also use drugs, leading the children to be further exposed to physical or emotional harm. In addition, those who have to be removed from these environments are more likely than other children to end up engaging in crimes or drug use later on.

Finally, children who are on the street and who use drugs are likely to have been abused by parents or guardians, have history of arrests, or engage in sex work which may expose them to an STD. All of these things can have an economic impact on the community and country as a whole as health care for these individuals is usually provided by the community or government.


Addiction leads to a huge loss of money to the United States in many different spheres. Most of these losses are unable to be recouped, with the exception of drug treatment programs. It is shown that money spent on treatment for those who wish to end the addiction actually results in a surplus of money in the long run, as less money is spent on the justice system and the health care system.

Health care and incarceration make up a large portion of the economic burden for those who are addicted to drugs, as consistent drug use leads to many different health problems and a much higher likelihood of committing a drug-related crime. As such, it seems that more money towards treatment is the best way to avoid the loss of money in other sectors of our economy.

There is no answer for ending drug abuse in our country, but providing people with help that can improve and prolong their lives, make the lives of their loved ones better, and potentially drop the amount of economic despair that the country experiences seems to be the greatest solution.

Drug use is always going to be a threat to our society. However, that doesn’t mean we are helpless in combating the side effects that substance abuse and addiction places on our country. If we want to fight the battle of drug addiction and stop the economic repercussions that comes with it, we have to enforce a stronger system that encourages treatment in the early stages of addiction.

Drug & Alcohol Detox

Peaks Recovery is medically staffed by a primary care physician, a psychiatrist, and round-the-clock nursing. The medical team’s acumen provides the safest medical detox in Colorado.

Inpatient & Residential Treatment

Peaks Recovery is licensed to provide the highest level of inpatient and residential programming in Colorado. In addition to satisfying state criteria, we have further received the highest recognition from the American Society of Addiction Medicine (ASAM) for our 3.7 and 3.5 levels of care.

IOP Treatment

Peaks Recovery provides accommodating support for individuals who may be experiencing some obstacles in their recovery journey or are looking for a step down from an inpatient program.

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