The National Cost From Alcohol and Other Drugs
We recently wrote that every system is perfectly designed to achieve the outcomes that it does. One implication is that there are benefits distributed by and across that system that accepts or tolerates the negative outcomes, in this case as many as 90 million people abusing alcohol and other drugs. An extension of this thought is that the system would be responsive to the benefits of no longer tolerating those outcomes as opposed to continuing to pay the costs of those outcomes. The ideal, of course, would be clear demonstration that the cost of reducing the impact of alcohol and other drug abuse was less than the current cost of tolerating those damages.
We were challenged by two friends on one of our social media platforms to pursue that thinking. This coincided with our post outlining what a comprehensive, persistent, community based response might include. To date efforts at responding to the breadth of alcohol and other drug issues in communities and nationally has been justified most often as a moral imperative. Yet, the costs of abuse and addiction increase. Would we bolster the case and spur more action if we could point to the costs of continuing as we are, who is paying those costs, who is benefiting from the status quo? Might we find a nexus among the answers to those questions?
Three caveats. One, we will not include the burden of nicotine especially through the use of tobacco. Nicotine has been, for the most part, outside of our focus. We should note, however, that the costs to society from nicotine abuse and addiction may well exceed that from alcohol and other drugs. Although nicotine use is lower for Americans at 11% compared to alcohol at 80% and recreational cannabis at 16%, and though greater than schedule 1 narcotics (other than cannabis) at 7%, the damage from nicotine exceeds all of those drugs combined. We have seen estimates that deaths from nicotine exceed 450,000 Americans every year versus alcohol at about 180,000 and drug overdose at 75,000 in 2024. We are simply noting the choice we are making here. Second, this essay, like all to date, is intended to introduce a better understanding of alcohol and other drug abuse and addiction across a broader audience than we have currently. It is written in lay terms for lay consumption. This is not an academic study where we would be more definitive and precise with the presentation of other studies. Of course, we intend to be factual and faithful to serious studies, but we do not write with traditional, academic rigor nor for those purposes. Finally, and as noted, our intent is to educate the lay person. As such, those with greater and specific training in clinical addiction, psychology, criminal justice and epidemiology among others may find this information rudimentary.
The assessments of total cost from alcohol and other drug abuse in America vary widely. One study published by the National Center for Drug Abuse Statistics in 2025 (NCDAS) estimates that cost to be nearly $820 billion per year, taking into account crime, healthcare needs, lost work productivity, and other impacts on society. Specifically, $193 billion was incurred in overall costs for illegal drugs in addition to $78.5 billion for prescription opioids including $11 billion in healthcare costs related to the use of illegal drugs and $161 billion for prescription opioids.
Another study from the International Society of Addiction Studies Editors in 2017 estimates the cost at $1.02 trillion from opioid use disorder alone including $35 billion costs from healthcare, $23 billion for crime, and $23.5 billion from lost workplace productivity. The item accounting for this large difference from the NCDAS study is that this study attempts to quantify quality of life losses from opioid abuse. They estimated the value of reduced quality of life from opioid use disorder at $390 billion and life loss to opioid overdose $480 billion.
A study reviewed by EBSCO repeated a 2017 from the National Institute on Drug Abuse estimating the total annual cost to the nation of substance abuse to be more than $740 billion including alcohol for $249 billion, illicit drugs for $193 billion, and prescription opioids for $78.5 billion.
Most studies measure the cost to American society including five, general components:
· Healthcare
· Criminal justice
· Lost productivity
· Government spending
· Quality of life
Healthcare is the most obvious source of expense. A 2021 study posted on the Journal of the American Medical Society examined a total of 124 million hospital emergency room encounters and 33 million hospital inpatient encounters involving alcohol and drugs in 2017. Total annual estimated medical cost in hospitals was $13.2 billion. By substance type, the cost ranged from a low of $4 million for inhalant-related disorders to $7.6 billion for costs associated with alcohol. These data likely understate the healthcare cost burden by not accounting for the role of alcohol and drug abuse as the primary cause of another disease later treated as the primary issue. For instance, some estimates are that up to 10% of all HIV/AIDS is caused by injectable drug use.
Criminal justice costs are also extensive. A report from the Addiction Center estimates that up to 40% of sexual assault, 25% of total assaults, 40% of homicides, and 40% of child abuse crimes were committed under the influence of alcohol alone. An updated report from the Addiction Group in 2025 reports that more than 1.5 million alcohol and drug arrests occur annually in the U.S., that 85% of the U.S. prison population has a substance use disorder or committed their crime while under the influence, and that recidivism rates for drug-involved offenders is 77% rearrest within five years of release. That report suggests that with the cost of housing drug offenders in jails and prisons at $30,000 per inmate annually, and nearly 450,000 Americans incarcerated for drug offenses, the annual cost of incarceration alone exceeds $13.5 billion per year.
Although dated, the most comprehensive criminal justice study we found is from the Miller School of Medicine at the University of Miami. They report that in 2007 more than 23 million criminal offenses were committed in the U.S. resulting in approximately $15 billion in economic losses to the victims and $179 billion in government expenditures on police protection, judicial and legal activities, and corrections. Since the data available at that time showed that more than 50% of state and federal inmates used drugs in the month prior to committing the offense for which they were incarcerated, and that more than a quarter of all offenders were using drugs at the time of their offense, they attribute a direct and indirect cost of drug and alcohol related crime of approximately $90 billion in 2007 dollars. Their estimated cost per offense including direct and indirect costs (mostly victim related) ranged from $8.9 million for homicide to a low of $3,500 for theft and totaled $9.5 million again in 2007 dollars.
As to workplace costs, DWI Resource Center estimates that although the vast majority of workers do not engage in harmful alcohol and other drug behavior on the job, the few who do represent a heavy cost burden. According to this source, employees who engage in heavy alcohol or illicit drug use are 33 percent less productive than their co-workers, and on average cost their employers $7,000 annually. In total, substance abuse costs America’s employers more than $160 billion per year in accidents, lost productivity and related problems.
The costs are calculated in five buckets including:
· Turnover and absenteeism where heavy alcohol and drug users are twice as likely to be dismissed, three times more likely to leave voluntarily and much more likely to miss days at work
· Fatalities and accidents with an estimate that 40% of workplace accidents involve alcohol or drugs
· Higher workers compensation costs due to those accidents and increased premiums that result
· Increased healthcare costs again from experience and higher premiums
· Theft where estimates are that 80% of heavy drug users steal from their employer and alcohol is the third leading cause of workplace violence.
The National Safety Council maintains an interactive cost calculator to measure business loss. We input location as Kentucky (where we live), industry as durable goods manufacture and employees of 500 in an attempt to make a reasonable, non-biased estimate for illustrative purposes. The result was an annual cost of $455,251 distributed among healthcare ($141K), turnover ($186K), and lost time ($128K). Note that healthcare accounts for 31% of the cost. If one is surprised that the total cost is high, it may be that the costs are largely hidden.
Government spending related directly to alcohol and other drug abuse and addiction (including some but not all of the previously discussed criminal justice costs) is also extensive. The NCDAS study cited earlier in this essay reported that in 2024, the National Drug Control Budget requested $44.5 billion across agencies focused on expanding efforts to reverse opioid overdoses, disrupt the drug supply chain, and provide support for prevention, treatment, and recovery including:
· $459.0 million to expand harm reduction interventions
· $21.8 billion to expand access to treatment for SUD and overdose prevention
· $4.1 billion to increase access to treating SUD in prisons settings
· $2.9 billion to provide support for preventing substance abuse and supporting recovery services
· $3.3 billion to combat drug trafficking networks.
A report from the Biden White House noted total spending on “drug control” form all agencies at $29.9 billion in 2023.
A Pew Research study from 2015 is somewhat dated but shows a 2009 spend by State and Local government of $7.6 billion that does not include Medicare, Medicaid or criminal justice . They projected an increase to $13.3 billion by 2020. As a good portion of these monies are from bloc grants from the federal government, there is certainly a double count between these figures and the federal government figure.
A study posted on the NIH website from 2024 cited previously is one of many attempting to define a financial cost to quality of life losses from alcohol and other drug abuse and addiction. These efforts have been difficult. Certainly, there are quality of life difficulties for the abuser including illness, premature death, unemployment, social isolation, homelessness, assault and more. The quality of life issues for family members are very real, too, including loss of income, lack of parental presence and child neglect and abuse, physical and behavioral health damage, social isolation, and employment difficulties. Naming and defining these issues is one thing but placing a financial value is another. An article in the Journal of Multidisciplinary Health in 2023 makes a thorough attempt to define those quality of life issues. The explanations, causes, effect and descriptions are all included. However, the authors do not try to place a dollar value. The one estimate we do have is from the International Journal of Addiction Studies Editors (cited earlier) placing a value of $390-$480 billion in 2017 dollars. Possibly we might in the future think about the cost of social work in America, isolate that portion related to alcohol and other drug abuse and see if that is a useful stand in for the costs to quality of life issues.
Our goal is to pursue a discussion linking the costs of alcohol and other drug abuse and addiction in America, describe those who are paying that price, describe who benefits from the availability and use of alcohol and other drugs, and to see if there is a useful nexus. We stated from the beginning that this is not an academic exercise or deeply rooted in clinical experience. Rather, we are writing for the laity as a means of expanding a basic understanding.
We have tried to discuss the total costs and the components. Among them:
· Healthcare. If we use the American Medical Society report and healthcare provider price index costs increasing by 21.5% since 2017, their estimate then of the healthcare burden from alcohol and other drug related hospital costs might be $16.1 billion in 2025 dollars. As noted, these data are only for direct hospital costs
· Criminal Justice. Using the University of Miami study estimated overall cost of $179 billion and an overall producer price increase of 49% that might roughly estimate these costs nationally, annually at $267 billion in 2009 stated in 2025 dollars
· Private Sector Business Costs. The DWI Resource estimate is relatively current and estimates a total cost to business in America of $160 billion
· Government Spending. The report from the Biden White House shows spending from all agencies at $29.9 billion. State spending was reported as $7.6 billion although many years ago and certainly supported by federal monies. Applying a CPI increase of 8.57% to only the federal spend gives us $32.5 billion.
As noted, we have not attempted to further refine or include estimates about quality of life issues.
These reports are intended to be directional for enhancing the awareness of the laity. However, given just these data points it would seem to support the study reviewed by EBSCO at $740 billion annually as well as the report from National Center for Drug Abuse Statistics in 2025 estimating the annual, national costs from alcohol and other drug use, abuse and addiction in America to be in excess of $800 billion and .
Gene Gilchrist
November 2025
