Opioid Pandemic 3.0 – The Real Cost

The opioid epidemic, though somewhat supplanted as a national talking point in America since the beginning of the Covid pandemic, has by no means disappeared from the United States. The epidemic reached national attention in the mid-2010s, with books such as Hillbilly Elegy: A Memoir of a Family and Culture in Crisis and Dopesick: Dealers, Doctors, and the Drug Company that Addicted America being released in 2016 and 2018, respectively. However, despite these books’ recentness, the opioid epidemic has been ongoing since the mid-1990s. This week’s Overwatch brief will pull publicly available data, reporting, and academic articles to explore the costs of the opioid epidemic and attempt to assess whether a new phase is on the rise.

From 1999-2018 the Center for Disease Control (CDC) estimates that approximately 760,000 people died from a drug overdose in the United States, with over two-thirds of those deaths involving an opioid. Those numbers have only grown in the three years since that estimate was reported. The maps below show drug overdose deaths by state every two years from 2014-2020. As can be seen, the Midwest, Appalachia, and northeast of the United States are among the areas most highly affected consistently throughout the period.

2014 2016

2018  2020

While the loss of life is in and of itself an issue, the sheer economic cost of the epidemic is also cause for concern. Data from the CDC estimates that in 2017 alone, the cost of opioid use disorder and fatal overdoses was approximately $1.02 Trillion. This cost was calculated by estimating the cost of healthcare, substance use treatment, criminal justice costs, lost productivity, and value of statistical life lost. Many of these costs are directly or indirectly spread to taxpayers and businesses, as the local, state, and federal government attempt to deal with this issue.

A look at the costs by state reflects a similar pattern to the maps charting opioid deaths, with those states in the Midwest, Appalachia, and northeast paying the highest costs. Taking just Ohio for example, we see that in 2017 opioid use disorder cost roughly $23.01 Billion, while fatal overdoses cost roughly $49.5 Billion, bringing the total to $72.58 Billion, or $6,266 per resident of the state.

Outside of just a loss of life and the general economic cost, a specific look at the epidemic’s effects on the lives of children adds some context to the severity of the issue. Analysis of Child Welfare Resource Utilization and Costs Attributable to Opioid Misuse between 2011-2016 shows the toll the epidemic had on children during that time. The graph below shows that the cost associated with children affected by the opioid epidemic neared $10 million, with the highest cost coming from foster care associated with opioid misuse.

As stated previously, the epidemic of opioid use in the United States entered the mainstream American consciousness in the early and mid-2010s. However, studies and articles about the epidemic show that its origins are much earlier and date back to the mid-1990s. In a 2022 interview with Howard Koh, a Harvard University Professor of Public Health and member of the Stanford-Lancet Commission on the North American Opioid Crisis, he points to the release of OxyContin and the promotion of the painkiller by Purdue Pharma as the inciting event that made the opioid possible. This claim is seemingly backed up by 2020 guilty pleas from the company regarding fraud and kickback conspiracies, resulting in numerous fines and the Sackler family paying a $225 million fine. Additionally, a $6 billion civil settlement was agreed to in March 2022.

However, while prescription drugs may have kicked off the opioid epidemic in America, it was by no means its final evolution. According to experts, including the CDC, the epidemic has three distinct phases. The first phase is, of course, opioid deaths and abuse tied to prescription drugs. The second phase saw a rise in deaths and abuse vis-à-vis heroin. Between 2010 and 2015, it is estimated that death attributed to heroin use tripled, according to the Drug Enforcement Administration (DEA). The final phase is primarily thought to have started in 2013 with the introduction of synthetic opioids, such as fentanyl, to the public. Fentanyl’s strength, addictiveness, relative cheapness, and ability to be mixed with other drugs have made it particularly deadly, even compared to the first two periods of the epidemic. A graph charting overdose death between 1999 and 2020 highlights the distinct phases described above and the deadliness of all three forms of the drug.

Echoes from the prescription drug-driven phase of the crises can still be seen in the most recent phase. For example, according to the DEA, fentanyl is often distributed in a way that makes it look like prescription painkillers.

Outside of the different vehicles through which opioids are distributed, geographical differences must be considered. While the maps above show the differences at the state level, a deeper layer can be analyzed. According to a study by the U.S. Department of Agriculture’s Economic Research Service, the first prescription drug phase of the opioid epidemic hit rural areas harder than urban areas. This can be seen in the graph below, which shows a sharper increase and the eventual surpassing of opioid death per 100,000 people in rural areas between 1999-2011. However, as crackdowns on prescription opiates took effect, this growth slowed, and the growth of opioid-related deaths in urban areas surpassed that of rural areas.

This pattern holds until at least 2019, with heroin-related death being higher in urban areas between 1999-2019 by 1.5 times and synthetic opioid death being higher in urban areas from 2015-2019. Overdose death from prescription drugs, on the other hand, remained higher in rural areas between 2004-2017, with urban prescription drug deaths reaching parity in 2018 and 2019.

This reversal in the pattern is interesting as the opioid epidemic is still primarily thought of as an epidemic affecting rural America or small former mining towns in the mountains of West Virginia. While it is undeniable that those areas have been affected by opioids, it is equally undeniable that the epidemic has spread to urban and suburban regions of the United States.

The most likely explanation for this shift is that prescription opioids are more accessible for those living in rural areas than the illicit products that took over the market after the crackdown. Illicit forms of the drug often brought in through the southwest border and ports of entry, often make their way to urban environments and slowly trickle into more rural environments. This means that effective combatting of the opioid epidemic in its newest phase should continue to focus on societal recovery and social services for those in rural areas to address the economic causes and local/familial distribution of opioids. Urban areas, on the other hand, should focus their efforts on enforcement and stopping the supply of drugs coming in.

As the opioid epidemic now approaches its 27th year, it is essential to consider whether we are approaching a new phase of the epidemic. Beginning in 2020, the Covid-19 epidemic caused a rise in opioid-related fatalities in the US. The map below demonstrates how overdose deaths significantly increased in every state during the first year of the pandemic. This trend continued with a 15% increase in deaths between 2020 and 2021, according to reporting by CNN. While explanations for this increase range from isolation, economic turmoil, overdose emergency drug (Naloxone/Narcan) shortages, and extra capital in the form of stimulus checks, the numbers paint a grim picture and eviscerate any idea that this epidemic is over.

While this pandemic rages, psychostimulants, such as methamphetamine, have made their way into previously unaffected U.S. markets leading to increasing deaths year over year since 2007, according to the DEA. According to a study by the Rockefeller institute of government, there has been a sixfold increase in positive methamphetamine drug tests in the United States since 2013. Additionally, while previously not as affected by methamphetamine as the American Southwest, in the Northeast of the United States the same areas heavily affected by the opioid crisis, have seen increased deaths and incidents involving psychostimulants. A map of domestic meth labs discovered by the DEA in 2019 highlights this changing geography.

The increased presence of this drug in geographical areas that align with the opioid epidemic suggests a possible connection. Whether that connection is due to the drug supply chain or some other factor cannot be determined during this assessment. However, the popularity of methamphetamine and other drugs of that class in rural areas, the correlation between overdoses and mixed use of meth and fentanyl, and the trend of adding fentanyl to other illicit drugs means it is a trend that is likely to cause increased damage.


The first phase of the opioid epidemic, which mainly targeted rural and Appalachian America, has been the subject of much conversation and popular media depictions. However, as the epidemic has evolved over the decades, the effects of illicit opioid products have shifted geographically to include urban and suburban areas of the country.

Considering the data pulled from government sources and academic studies surrounding the opioid epidemic, Overwatch analysts assess that this trend is likely to continue until such a time that sustained and effective reform and policy are put into place to combat it. Even as Covid-19 ground the United States supply chain to a halt, the pandemic appeared only to exacerbate the number of people dying from opioid-related overdoses showcasing the long-term staying power and stickiness of this problem. While post-pandemic numbers may fall slightly, there are no signs that they will return to levels lower than those of 2019.

Additionally, analysts assess that we will continue to see other classes of illicit drugs growing in those areas most affected by the opioid epidemic. This will likely lead to increased or purposeful mixing of synthetic opioids, such as fentanyl, with other drugs, leading to increased overdoses and death.

As this trend continues, we will likely see a shift in the national conversation around drug use that moves it away from a problem of rural America and deals with it as an issue affecting urban, suburban, and rural environments simultaneously. Further enforcement, specifically along the southwestern border of the United States and around ports of entry or significant shipping hubs and airports around the country, is likely to be increased, and counter-trafficking partnerships with Mexico will be strengthened.