Opioid crisis also imposes handicap on US economy

Washington (AFP) –


The scourge of the opioid crisis in the United States kills 90 Americans every day, but beyond the human toll it also handicaps the US economy, taking millions of people out of the workforce, economists warn.

President Donald Trump has declared the epidemic a national emergency, as 2.4 million Americans are estimated to be addicted to opiates, the narcotics that include prescription painkillers such as morphine, as well as heroin.

Trump's Council of Economic Advisers estimates that in 2015 the opioid crisis cost the US economy $504 billion, or 2.8 percent of gross domestic product, in increased healthcare costs and lost wages, far higher than previously estimated.

More than 50,000 Americans died from a drug overdose in 2015, more than half of which were due to opiates, the CEA said in a report published November 20.

"The problem is worsening at an alarming pace, with opioid-involved deaths doubling in the past 10 years and quadrupling in the past 16."

And as businesses struggle to find workers to fill open positions -- with the US unemployment rate down to 4.1 percent -- large numbers of potential workers are being excluded from consideration or are not able to work.

- Lost workers -

"The opioid epidemic affects the US economy by disabling adult workers in their most economically productive years," said Thomas Bollyky, an expert on health and economics at the Council on Foreign Relations, an influential think-tank.

Federal Reserve Chair Janet Yellen said last week the epidemic is contributing to declining labor-force participation among "prime-age workers," especially men aged 25-54. And Jerome Powell, who will succeed Yellen in February, echoed that analysis.

The labor force participation rate has been below 63 percent for more than three years, down from 67 percent in the 1990s and into 2000, according to government data. Some of that decline is due to the aging population, but the rate for adult men in the workforce has fallen below 72 percent from 77 percent in 2000.

Alan Krueger, economist at Princeton University, estimated that the increase in opioid prescriptions from 1999 to 2015 "could account for about 20 percent of the observed decline in men's labor force participation during that same period, and 25 percent of the observed decline in women's labor force participation."

He said the decline is most notable in areas where opiates are most prescribed.

"Many factors are at work, but I think the driving force has been the US medical system and pharmaceutical companies," Krueger said. "With good intentions of relieving pain, too many doctors have been overprescribing opioid medications."

Bollyky agreed the crisis has its origins in over-prescription of the drugs, noting that in 20 years, prescriptions have soared by 300 percent.

"In 2015, the amount of opioids prescribed was enough for every American to be medicated around the clock for three weeks."

But drug companies also played a role, with "aggressive and arguably deceptive marketing" on these painkillers, Bollyky said.

For example, laboratories delivered 780 million tablets in six years to West Virginia, a state of 1.8 million people whose opioid overdose death rate jumped by 17 percent in 2015.

- Insurance policies -

Beyond the impact on the labor market, the entire economy suffers from the epidemic of addiction. Without jobs, addicts have no income and cannot consume in a country where household spending is the main driver of growth.

Many employers require drug tests, and will not hire workers with a criminal record, which many opioid addicts have, making them unemployable.

One surprising finding is the role US insurance policies have played in contributing to overuse of opioids, since they offer more generous coverage for these drugs to treat things such as chronic back pain, than for less addictive alternatives, such as chiropractic treatments.

And those without health insurance coverage may turn to these more affordable substances, instead of more expensive procedures such as knee surgery or wisdom teeth extractions that would cost thousands of dollars.