What Does the Drug Problem Cost Us?

by Marya Hynes, Coordinator, Costs Project, CICAD/OEA

 
If countries could track how much addictions is really costing their economy what would they find out, and what changes would they make to their drug policy?  CICAD has launched a program that will allow OAS member states to begin to understand for the first time what drugs are costing their societies.

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How does estimating costs help countries? 

Drug policy is a major political issue across the globe; yet in many cases policy is created without the benefit of scientific data to support actions taken.  By learning to measure the costs of drugs, not only do we provide scientifically valid research evidence to guide policy makers, but the results can be presented in tangible dollar terms which are easily understandable by decision-makers, the media and the general population. 

In this way costing studies provide a framework though which the many different sectors of society such as health, criminal justice, welfare, industry, and labor can examine the impact that drugs has on them in terms that are both measurable and comparable to each other, and use that knowledge for formulate sound, research-based policy.  Armed with specific cost data countries can make rational decisions about where to target scarce government resources.  More importantly, by understanding where money is being invested and the costs related to those investments, decision makers can then devise strategies to reduce those costs. 

What is meant by “cost”?

Defining and measuring costs has always been important to economists, but the idea of studying costs in the drug field is rather new.  In the drug field, “costs” means more than just budget (although part of the puzzle).  When we talk about costs we are looking at how the drug problem itself impacts on many social sectors and on civil society as a whole. 

A great example is to look at how drugs impact our health system.  How would our health system be different if there was no illicit drug use?  Everyday emergency rooms are filled with patients suffering from drug abuse problems, overdoses, suicide attempts, drug induced comas and psychosis, not to mention the range of injuries due to accidents or aggressive behavior while on drugs.  Of course there are less direct impacts on the health system too.  Hepatitis, and HIV/AIDS are associated with injection drug use.  All of these patients place a huge burden on our health system, which is paid for by civil society either through taxes, insurance fees or other means.  The cost of drug use also can be measured by its impact on the criminal justice system and on lost workdays.  But the cost of drugs extends far beyond health care and criminal justice expenditures.  It can be seen in every aspect of a nation’s economy and society.  Crime, industrial production, agriculture, tourism and the overall quality of life all pay the price that results from the production and distribution of drugs, as well as its use and abuse.  In other words, the use of drugs imposes costs on society far beyond what governments budget in terms of drug treatment and prevention.

How can we measure it? 

There are many ways to go about measuring costs.  The question is, which way is most appropriate for the countries in the Hemisphere?  CICAD’s approach is based on simple techniques, many of which were used by Canada and the United States in their own cost studies.  Rather than attempt to measure the total cost of drugs in an entire country all at once, CICAD is launching projects to estimate costs in a series of specific sectors ranging from health to criminal justice. 

CICAD will begin by supporting these projects in four pilot countries, Barbados, Costa Rica, Mexico and Uruguay.  The idea is to begin producing basic estimates of cost impact in several specific sectors in the first year of implementation.  Over the next two years these projects will be expanded and further developed so that the countries will each be capable of producing broad-based cost estimates for a variety of social sectors.  The Canadian Centre on Substance Abuse will also support the work of CICAD by ensuring that the experience gleaned in this work is reflected in the International Cost Guidelines. 

What has been done so far? 

CICAD has been working jointly with a team of researchers from the Robert Wood Johnson Medical School (RWJMS) of Rutgers University in New Jersey to develop a basic methodology for estimating the economic impact of drugs in countries throughout the Americas.  Work began in June of 2002 by compiling information from each of the CICAD Member States, not only on the current drug, epidemiologic and economic research available in each country, but also to learn more about the type and amount of information available from other social sectors that are impacted by drug use, such as public health programs, and the court systems and industry. 

Four countries (Barbados, Costa Rica, Mexico and Uruguay) were selected to act as pilots for the research methodology, and to participate actively in the development of the methodology.  These countries represent the four regions of the Hemisphere:  North America, Central America, South America, and the Caribbean.  Apart from representing different regions, the countries were selected on the basis diversity in terms of size, socioeconomic levels, and existing research infrastructure.  This will allow CICAD to develop a methodology that takes into account the abilities of a variety of countries with very different resources at hand.

In December of 2002, representatives from the four pilot countries met for the first time in Mexico City, Mexico.  Although they had never worked on a collaborative program together before, they reached agreement on a variety of technical issues on measuring costs in their countries, as well as on several common projects that they can carry out over the course of 2003.  The pilot countries hope to be able to produce their first estimates on cost impact in a few social sectors as early as April of 2003.  Currently Barbados, Costa Rica, Mexico and Uruguay are collecting information to produce some estimates on hospital outpatient costs, inpatient costs, prison day costs, and treatment facility costs.  By collecting this basic data, the countries will be in a good position to produce estimates on the direct costs of drug abuse to governments in the prevention, judicial and possibly penal areas.  In addition, the counties will be equipped to begin estimating the public and private sector costs of drug treatment.  By breaking up the program into different, small projects, each with its own product, progress can be continual and countries can build on their successes.

The research team from RWJMS is assisting the countries on a technical level.  One of the major goals is to identify statistics on health problems, and crime related to drug use that can by used by the pilot countries to develop more reliable cost estimates.

Over the next year and a half, CICAD will continue to develop a methodology by expanding on the projects already in process, and identifying new areas for study.  The goal is to develop by 2004 a reliable mechanism will exist that can be applied by any country in the Hemisphere.  Hence each of the Member States will be equipped to respond to the MEM and thus fulfilling the mandate from the Summit of the Americas.

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