By Mark Gold, MD
Many Americans are aware of the United States’ current overdose and addiction epidemic. For patients, families, friends, and loved ones, the tragic health and behavioral effects of substance use disorders (SUDs) are readily recognizable at a level of intimate, granular detail. Among individuals who have used substances, not all have SUDS, but many have spent money on illicit substances. SUD-related discussions frequently focus on survival or addiction, sometimes looking past another elephant in the room: finance. A recent RAND report for the Office of National Drug Control Policy (ONDCP) sheds an important light on how much money we pay for illegal drugs by highlighting Americans’ expenditures on methamphetamine, marijuana, heroin, and cocaine.
What did this report find about how much Americans spend on drugs?
This report found that Americans spent between around $120-$145 billion on methamphetamine, heroin, marijuana, and cocaine each year for a decade (from 2006 to 2016). During the past year, Americans spent $150 billion on marijuana, heroin, cocaine, and methamphetamine, and another $227 billion on alcohol. We could also factor spending on designer drugs, like ketamine, psychedelics and MDMA, into this equation. Researchers arrived at the report’s figures by using a model-based in part on data from the Arrestee Drug Abuse Monitoring program, or ADAM, which tracked the substance consumption patterns of justice-involved individuals through more objective methods like urinalysis. The model also incorporates data on drug prices and adjusts numbers for inflation.
This report highlighted a number of key findings, including:
The number of individuals using marijuana than in the previous month rose from 25 to 32 million individuals, an increase of about 30 percent in six years (2010-2016).
From 2010 to 2016, heroin use rose an average of 10 percent each year.
In 2015 and 2016, 2.4 million people used cocaine for four days or more in the prior month. Before plateauing in 2015, cocaine consumption declined between 2006 and 2010.
The report also found that Americans spent $27 billion on methamphetamine in 2016 and, with a 39 percent rise in spending, $43 billion on heroin in 2016. From 2013 to 2016, Americans spent about $25 billion on cocaine, a marked decrease from earlier numbers: in 2006, for example, the report notes that Americans spent $58 billion on cocaine. The largest explanatory factor in the decrease in cocaine expenditures over this period was a 63 percent fall in the number of daily or almost daily individuals using cocaine. The report also says that, due to limited data, figures on methamphetamine consumption and spending are less certain than the other substances studied. Between 2010 and 2016, marijuana spending rose to $52 billion from $42 billion—the largest figure for Americans’ substance spending, an increase of almost 25 percent. Interestingly, the report finds that marijuana has displaced cocaine as the substance on which Americans spend the most. Cocaine was number one in 2006, and marijuana last. Still, cocaine use has increased enough that it has also moved up to number two on the list of drugs that cause death, behind opioids.
The marijuana market, the report observes, is now as large as the combined size of the cocaine and methamphetamine markets, and the size of the heroin market resembles that of marijuana more than the other studied substances. Cannabis legalization, vaping, and changes in stigma are all playing a role in this trend. High-end shops,1 giving cannabis an aura similar to that of cocaine when it was the “champagne of drugs,” are also a factor.
Why is this important?
One reason these results are important is simply because they show that money, and very large sums of it, are spent on illicit substances. The supply of money is finite and drugs stimulate their own continued demand—in this context, you do have to think about Volkow’s question of free will. It would not be surprising to see substance spending have an effect on other retail spending or displace personal or household spending on books, food, movies, children’s clothing, and any number of other ordinary non-euphorigenic or reinforcing expenses.
Financial ruin is one of the conditions that physicians with SUDs often share with underemployed individuals with SUDs. And these large financial transfers from individuals to the drug industry show no signs of changing. The report’s lead author, Greg Midgette, told U.S. News & World Report, “Obviously, we need to continue to pay really close attention to and come up with a solution to the different forms of the opioid crisis, but that doesn’t mean that we can ignore methamphetamine and cocaine.”2 Data on total substance spending helps to contextualize the rise and fall in popularity of substances at different points in time and the shifting nature of different SUDs. These shifts can be difficult for policymakers and others in the field to keep up with, and reliable data is critical for formulating the most effective responses. The authors of the report suggest improving or modernizing surveys used by students and households to report substance use—they should, for example, track both the amount and type of consumed cannabis products. They also suggest restoring the ADAM program, which stopped gathering data in 2013, and shifting to more objective measures of substance use in general, such as urinalysis or wastewater testing. The report points to Australian data collected through wastewater testing that suggested a doubling of fentanyl use from 2017 to 2018 in certain parts of the country.
Research You Can Use has previously pointed to high levels of uncertainty in studies on the health and behavioral impact of marijuana use, especially with early exposure, poor learning, and increasing THC doses. The report clearly indicates that regular marijuana use is growing—so much so that it is now, remarkably, the top substance on which Americans spend their money—and it is still unclear what long-term effects this will have on those purchasing licit and illicit cannabis products. The market for cannabis is strong and it appears that when the substance is legalized, the illegal market survives, or even expands. Rising use and growing market share make it all the more urgent for researchers to try to find out what cannabis does, who it puts at the greatest risk, what its effects are in utero, early childhood, and throughout development, and how to treat chronic use. The Surgeon General has raised3 this issue more than once.4
The largest substance spending changes in recent history revolve around cannabis, but there are also sizable moves in the fentanyl, cocaine, and methamphetamine markets. Use patterns fluctuate based on price, access, and supply, along with stigma and broader cultural shifts. Chronic methamphetamine use, for example, has risen considerably as the substance’s supply has “improved”—the RAND report refers to an “increasingly pure and inexpensive product”—to the point where it surpasses chronic cocaine and heroin use. Again, these markets are also uniquely dangerous because they stimulate their own demand.
Beyond helping to formulate more effective responses to shifting SUDs by tracking market position, the RAND report is also a valuable reminder of addiction’s significant financial effects in and of themselves. SUD populations often experience pronounced setbacks in wealth creation. Individuals with SUDs may have problems maintaining steady employment, meeting health care expenses, and finding secure housing and stable social networks. We should have learned this from studies of tobacco smoking not so long ago. Researchers previously estimated that for individuals smoking tobacco products in states like Connecticut, New York, or Alaska, spending $1 million on tobacco was not beyond the realm of possibility.5 It’s worth simply emphasizing the magnitude of spending on substances in this context. Added to challenges like educational underperformance, labor market disconnect, mental illness, criminal activity, and a wide array of associated health problems, financial distress is one more of addiction’s enormously trying effects.
Calculating Drug Costs
Many experts, it seems, present different top line numbers on the amount of substance spending. But all still present big numbers. The National Drug Intelligence Center (NDIC) estimates that substance use costs the country more than $120 billion per year in diminished productivity, lower labor force participation, incarceration, premature mortality, emergency room and hospitalization expenses, and treatment programs. It highlights some of these particular costs:
$49 billion in reduced work days
$48 billion in incarceration expenses
$4 billion due to premature deaths
During the Obama administration, federal officials also tried to calculate substance spending and related costs. At that time, many authorities on the subject believed that individuals in the United States spent $100 billion annually on illicit substances, but immediate financial totals are not the only monetary consideration. There are also added financial costs in managing trauma after overdose deaths, providing care for children who have lost guardians, treating related infectious diseases, combatting associated crime, attempting to improve labor market positions, providing housing, and helping families through arguments, divorce, and dissolution.6
It’s also important, in other words, to calculate substance use’s costs to taxpayers. Some 90 percent of Americans age 12 and over do not currently use any illegal drugs, including marijuana, cocaine, heroin, hallucinogens, and inhalants, or use prescription drugs non-medically. But through taxes, they still contribute to the overall costs of substance use. And taxpayer costs exceed amounts directly spent on illicit substances. In 2007, illicit substance use cost taxpayers more than $193 billion in lost productivity, health care expenses, and criminal justice expenditures.7 Georgetown University has suggested that overall societal costs from substance use may exceed $532 billion a year, or 6 percent of the country’'s income.8
Overall costs may only increase. Bloomberg’s Global Vice Index measures the costs of substances over time, in part by following the price of a “basket of vice” containing stimulants, cannabis, cocaine, and opioids.9 Between 2018 and 2019, the price of this basket increased by 40% in the U.S., to $846. This is one of the costliest figures in the world, according to the index, placing the U.S. third overall. Younger, more affluent, and male individual substance consumers, who appear to spend the most money on illicit drugs, may find these figures especially interesting. The U.S. is also the largest market for drugs of abuse.10 New combinations of substances can also lead to higher prices. Look, for example, at the ketamine and cocaine combination called “Calvin Klein”,11 or at ketamine added to cannabis or GHB.12 These combinations can be sold across the country and, because of their novelty and particular makeup, it’s difficult to calculate how much is spent on them. Ketamine was previously primarily used as a “club” or “date rape” drug, but more recently, it is also used in everyday settings, including homes and offices. These use patterns can also make tracking costs more difficult, but we know that they exist and are only adding to overall spending totals and societal expenses. Most experts, meanwhile, would still conclude that our position as the top drug-consuming country remains secure. Substance spending costs are an issue of considerable national and even global concern. Where is our money going?
Tschorn, A. (2019) Why Barney's high-end head shop may be the future of cannabis-related retail. Los Angeles Times
Galvin, G. (August 20, 2019) Study: Americans Spent $146 Billion on Illegal Drugs in 2016. U.S. News & World Report
Devitt, M. (September 12, 2019) Surgeon General Issues Advisory on Risks of Marijuana Use. AAFP News
McCance-Katz, E., Santora, P., Clarke, T. (October 8, 2019) The surgeon general is right about marijuana and its risks. The Hill
Meyer, Z. (January 22, 2015) Smoking burns up as much as $2 million in a lifetime. USA Today
Rx Awareness. (2019) Real Stories. Centers for Disease Control and Prevention
National Institute on Drug Abuse. (2017) Trends & Statistics. drugabuse.gov
Georgetown University Health Policy Institute. Substance Abuse: Facing the Costs. Georgetown.edu
Miller, L.J., Lu, W. (February 20, 2019) It's Getting More Expensive to Get High. Bloomberg
Degenhardt, L., Chiu W-T., Sampson, N., Kessler, R.C., Anthony, J.C., Angermeyer, M., et al. (2008) Toward a Global View of Alcohol, Tobacco, Cannabis, and Cocaine Use: Findings from the WHO World Mental Health Surveys. PLoS Med
Salo, J. (July 12, 2019) Teen violin prodigy is latest casualty of "Calvin Klein" drug craze. New York Post
Sassano-Higgins, S., Baron, D., Juarez, G., Esmaili, N., Gold, M. (2016) A Review of Ketamine Abuse and Diversion. Depress Anxiety
1. Midgette, G., Davenport, S., Caulkins, J.P., Kilmer, B. (2019) What America’s Users Spend on Illegal Drugs, 2006-2016. RAND
Dr. Mark S. Gold is a teacher of the year, translational researcher, author, mentor and inventor best known for his work on the brain systems underlying the effects of opiate drugs, cocaine and food. Read more by Dr. Gold here.