FEDERAL TAX CUT TINY COMPARED WITH FINANCIAL EFFECT OF OPIOID CRISIS
Posted January 3, 2018 4:58 p.m. EST
The new tax code will reportedly boost the economy by cutting $1.5 trillion in taxes over 10 years, but compared to the drag created by the nation's opioid crisis, that's chickenfeed.
Pain pills, heroin and exotic drugs like carfentanil created millions of addicts, caused thousands of overdose deaths and cost the U.S. $504 billion in economic losses in 2015 alone, according to a report released by President Donald Trump's White House Council of Economic Advisors. That's three times the annual benefit of the tax bill.
"The problem is worsening at an alarming pace, with opioid-involved overdose deaths doubling in the past 10 years and quadrupling in the past 16," the report, released in November, said.
The loss of 63,600 lives to drug overdoses is the main cost driver. The vast majority of the victims are between the ages of 25 and 54, the prime working years when they would contribute the most to the economy.
The Centers for Disease Control found that the majority of the 2 million Americans addicted to opioids fall into the prime worker category. But unlike cocaine addicts who get hooked looking for a good time, most opioid addictions started in a doctor's office.
The crisis began in 1995 when Purdue Pharma introduced a new opioid pill called Oxycontin. Purdue promised that unlike Percocet, or other morphine-like drugs, Oxycontin presented a low risk for addiction.
Purdue spent hundreds of millions of dollars promoting its patented formulation. Doctors, regulators and lawmakers began handing out Oxycontin like aspirin, making it the No. 1 narcotic prescribed in the U.S. and generating $35 billion in revenues for Purdue.
By 1999, though, the body count was mounting. Purdue accused patients of misusing the drug, but in 2003 the Drug Enforcement Administration blamed Purdue's "aggressive marketing" for the widespread abuse.
By 2004, Connecticut Attorney General Richard Blumenthal filed the first legal complaint. In 2006, Purdue plead guilty in Virginia to marketing Oxycontin "with the intent to defraud or mislead." The company stopped claiming the formulation was safer than other opioid drugs.
Momentum, though, was on Purdue's side. Doctors prescribed Oxycontin to 97.5 million Americans in 2015, even though the National Survey of Drug Use and Health reported that one in four patients will abuse it.
The DEA is moving to reduce the amount of opioid medication manufactured in the U.S., and doctors are cutting back on prescriptions. But that has only sent many addicts to the streets, where they buy heroin, fentanyl and carfentanil, a large animal tranquilizer.
Opioid abuse has become so widespread that it is reducing the available workforce and lowering life expectancies.
Since 1999, the number of prime age men on disability insurance has risen steadily, and half of them are on opioids, according to Princeton economist Alan Krueger.
In a study released in October, Krueger discovered that the increase in opioid prescriptions from 1999 to 2015 could account for 20 percent of the decline in men's labor force participation rate during that period, and 25 percent of the decline in women's participation.
Addiction is also tied to economic well-being. A CDC study last month found that doctors in suburban areas, small cities and rural areas were prescribing opioids at much higher rates than big city doctors. High prescription rates also overlapped with "regions of economic hardship."
U.S. life expectancy dropped for the second year in a row in 2016, largely because of rising drug overdose deaths in younger Americans, the CDC said.
Opioid addiction is not just a heath care crisis. It is an economic one, because any plan to boost U.S. economic growth relies on more Americans working and earning more money.
The U.S. unemployment rate, which measures the number of people who want jobs but don't have them, is currently at 4.1 percent, a level that many economists consider full employment. The problem is the workforce participation rate for people between 25 and 54 has dropped from 84.6 percent in 1999 to 81.6 percent in November, according to the Bureau of Labor Statistics.
The participation rate peaked when Purdue's marketing effort reached full tilt, and the U.S. now has the lowest participation rate among wealthy countries. More than 10 million prime age Americans have dropped out of the workforce.
Economic growth depends on helping otherwise healthy people kick opioids and get back in the workforce. Firing, jailing or shunning will only hold our nation back.
Harris County was smart to join the dozens of other state and local officials suing opioid makers for sparking this epidemic. Paying for treatment and rehabilitation will be costly, and the drug pushers should help pay.
Unfortunately, opioid manufacturers don't have nearly enough money to pay for all the costs of the crisis, and we will be paying the price for decades.