The Social and Economic Costs of Substance Use Program
The Social and Economic Costs of Substance Use program has produced a series of reports, estimating the overall costs to Australia from the use of specific licit and illicit drugs. Funded by the Australian Government Department of Health, each report was coordinated by NDRI with the collaboration of key experts from around Australia.
While each report has used similar approaches, methods have been tailored to use the most recent and comprehensive data sources for each substance. Therefore, direct comparison of the costs for different substances should only be made with consideration of the specific data available in determining those costs.
NDRI worked with a team with diverse expertise from other Centres around Australia, including colleagues from the National Centre for Education and Training on Addiction, the National Drug and Alcohol Research Centre, and the Centre for Youth Substance Abuse Research. In each case, the economic analysis was led by the South Australian Centre for Economic Studies. Critical input was also provided by Quit Victoria (Cancer Council Victoria), the National Centre for Epidemiology and Population Health, the NSW Bureau of Crime Statistics and Research, and Curtin University’s School of Population Health.
Why did we undertake this research?
Although there is an existing body of Australian research on the social costs due to alcohol, tobacco, and to a lesser extent, some illicit drugs, the national estimates are dated. For example, in 2004/05, Collins and Lapsley estimated the costs for alcohol use were $15.3 billion, the costs of tobacco use were $31.5 billion, including the cost to those impacted by involuntary smoking, and, in a combined assessment of key illicit drugs, the overall total was $8.2 billion (Collins and Lapsley, 2008). An analysis by Moore (2007) separately estimated the costs for the major illicit drugs (cannabis ($3.1 billion), cocaine ($0.3 billion), opiates ($4.6 billion) and amphetamine ($3.7 billion)). A further contribution to the field has been the focus on ‘harms to others’, exemplified by the work of Laslett and colleagues on the harms arising from the use of alcohol by other people (2011).
Subsequent to these reports being produced, there have been some important changes in substance use. For example, since the Moore analysis, there has been a been an increase in crystal methamphetamine as the preferred form of methamphetamine (Australian Institute of Health and Welfare, 2014) and a shift in the route of administration (increased use by inhalation/smoking) together with increased purity (Degenhardt et al., 2016). In relation to tobacco, the prevalence of daily smoking has declined markedly in recent decades (Department of Health, 2017), with some evidence for a decline in average alcohol consumption too, particularly in younger age groups (Australian Bureau of Statistics, 2019; Livingston et al., 2016).
Importantly, there has also been increased evidence for conditions caused by specific substances and changes in the interpretation of data. For example, low levels of alcohol use were thought to provide some benefits, such as in reducing heart disease, but most of these benefits have been contested (Sherk et al., 2019) with further conditions, including cancers, identified as being partly attributed to alcohol use (Bagnardi et al., 2015). The impact of these changes can be clearly seen in the case of alcohol attributed deaths. In 2004/05 there were 1,057 (net) deaths due to alcohol (Collins and Lapsley, 2008), but in 2017/18 there were 5,219 (net) alcohol-attributed deaths (Whetton et al., 2021). Adjusting for population growth, this gives rates of 5.27 deaths per 100,000 (2004/05) rising to 21.05 per 100,000 (2017/18). Overall, these factors provided the rationale for re-evaluating the social and economic costs of substance use.
What did we do?
In each case, the process followed a similar course: assembling a team (for methamphetamine and tobacco this included an advisory panel with diverse expertise); identifying evidence on harms; accessing relevant data; estimating costs; and, final review by an external expert. Cost were separated into tangible and intangible costs, with the latter being items that cannot be traded, for example, lost quality of life. Importantly, in each analysis, there were costs that were clearly incurred, but for which a reliable estimate could not be made. In these instances, we either noted that we were unable to calculate a cost, or provided an estimate but excluded it from the overall total.
What did we find?
Examining the Social and Economic Costs of Alcohol Use in Australia reported on the costs incurred during the 2017/18 financial year (Whetton et al., 2021). Overall, the cost of alcohol use was estimated at $66.8 billion, with 5,219 deaths caused by alcohol in the target year. Tangible costs accounted for $18.2 billion, with intangible costs amounting to $48.6 billion. The major domains for tangible costs were workplace ($4.0 billion from absenteeism and injury), crime ($3.1 billion), health care ($2.8 billion, in particular through in-patient care) and road traffic crashes ($2.4 billion). A further $2.6 billion was attributed to the tangible costs of premature death. The intangible costs of alcohol were dominated by premature mortality, with the lost years of life valued at $25.9 billion, with a further $20.7 billion from the lost quality of life for those with alcohol dependence.
The Social Costs of Cannabis Use to Australia analysis reported on costs incurred in the 2015/16 financial year (Whetton et al., 2020a). Overall, the cost of cannabis use was estimated at $4.5 billion: $4.4 billion in direct tangible costs, including through crime and criminal justice, hospital and other health care costs, reduced productivity and worker absence, and road traffic crashes. The criminal justice system accounted for more than half of all tangible costs. A further $100 million was estimated for intangible costs due to premature death, mostly through cannabis-related road traffic crashes, resulting in more than 850 years of life lost.
Quantifying the Social Costs of Pharmaceutical Opioid Misuse and Illicit Opioid Use to Australia considered the costs incurred in the 2015/16 financial year (Whetton et al., 2020b). The report addressed extra-medical opioid use, which includes the illegal use of heroin and the misuse of pharmaceutical opioids (e.g. use not as prescribed). The overall cost was $15.7 billion with extra-medical opioid use causing more than 2,200 deaths a year. There was $5.6 billion in direct tangible costs, including health care costs, reduced productivity and worker absence, crime, and road traffic crashes. Premature mortality accounted for 44% of tangible costs. With more than 2,000 deaths and 70,000 years of life lost, the value of intangible costs was estimated at $10.1 billion.
Identifying the Social Costs of Tobacco Use to Australia in 2015/16 attributed $136.9 billion in costs to tobacco use, including 20,032 premature deaths (Whetton et al., 2019). Tangible costs contributed $19.2 billion to the total, particularly through health care ($6.8 billion), workplace absenteeism and presenteeism ($5.0 billion) and tobacco purchases ($5.5 billion by those with tobacco dependence, excluding taxes). However, intangible costs accounted for 85% of costs, with the lost years of life valued at $92.1 billion and lost quality of life from ill health at $25.6 billion.
The Social Costs of Methamphetamine in Australia report relates to costs incurred in 2013/14 (Whetton et al., 2016). The overall cost was $5.0 billion, with 170 deaths attributed to methamphetamine. These deaths were responsible for $12 million through tangible costs, with a further $770 million from intangible costs, for lost years of life. The most significant overall tangible costs arose in the criminal justice domain ($3.2 billion), followed by workplace costs ($289 million), child maltreatment/protection ($260 million) and health care ($200 million).
What does it mean?
As a general rule in conducting these analyses, we have chosen not to make specific comparisons between, or ‘league tables’ of, the substances assessed, due to the sometimes subtle and other times clear differences in the available data. Thus, a comparison of the total cost of tobacco with any of the illicit drugs would differ due to their legal status, with no legal costs available to be attributed to tobacco. Nevertheless, some public comment on the relative harms could be warranted. For instance, less than 20% of respondents correctly identify tobacco as the drug which causes the greatest number of deaths (Australian Institute of Health and Welfare, 2020).
In each report we identified areas where costs were incurred but which could not reliably be quantified. For example, fetal alcohol spectrum disorder is entirely attributable to alcohol, with potentially life-long costs to the individual, carers and society, but it was not possible to estimate costs reliably due to the lack of Australian prevalence data. Increased attention on this issue should aim to reduce the burden on those affected (Department of Health, 2018), and, with better data, allow reductions in harms to be quantified to inform policy and other responses.
Similarly, in compiling the reports, the issue of attributing harms from poly-drug use was identified but not resolved, especially for the use of illicit drugs, where co-use of other licit or illicit drugs is common (e.g. about 80% of those using cannabis, cocaine, ecstasy or meth/amphetamine report co-use of alcohol (Australian Institute of Health and Welfare, 2020)). Thus, the analysis of single drug harms provides a conceptually clear approach, but at the risk of double counting some costs if the totals from separate reports are combined.
View all the reports here
- Australian Bureau of Statistics, 2019. Apparent Consumption of Alcohol, Australia, 2017–18, Cat. no. 4307.0.55.001. Canberra, ACT, ABS.
- Australian Institute of Health and Welfare, 2014. 2013 National drug strategy household survey: Detailed report, Drug Statistics Series No. 28. Cat. No. PHE 183. Canberra, ACT, AIHW.
- Australian Institute of Health and Welfare, 2020. National drug strategy household survey 2019, Drug Statistics Series No. 32. PHE 270. Canberra, ACT, AIHW.
- Bagnardi, V., Rota, M., Botteri, E., Tramacere, I., Islami, F., Fedirko, V., Scotti, L., Jenab, M., Turati, F., Pasquali, E., 2015. Alcohol consumption and site-specific cancer risk: a comprehensive dose–response meta-analysis. British Journal of Cancer 112, 580-593.
- Collins, D.J., Lapsley, H.M., 2008. The costs of tobacco, alcohol and illicit drug abuse to Australian society in 2004/05, National Drug Strategy Monograph Series No. 64. Canberra, ACT, Commonwealth of Australia.
- Degenhardt, L., Sara, G., McKetin, R., Roxburgh, A., Dobbins, T., Farrell, M., Burns, L., Hall, W., 2016. Crystalline methamphetamine use and methamphetamine-related harms in Australia. Drug and Alcohol Review, 10.1111/dar.12426.
- Department of Health, 2017. Tobacco Control Key Facts and Figures: Smoking prevalence rates. Australian Government. Accessed 08 May 2018. http://www.health.gov.au/internet/publications/publishing.nsf/Content/tobacco-control-toc~smoking-rates.
- Department of Health, 2018. National Fetal Alcohol Spectrum Disorder Strategic Action Plan. Canberra, ACT, Commonwealth of Australia.
- Laslett, A.-M., Room, R., Ferris, J., Wilkinson, C., Livingston, M., Mugavin, J., 2011. Surveying the range and magnitude of alcohol's harm to others in Australia. Addiction 106, 1603-1611.
- Livingston, M., Raninen, J., Slade, T., Swift, W., Lloyd, B., Dietze, P., 2016. Understanding trends in Australian alcohol consumption—an age–period–cohort model. Addiction 111, 1590-1598.
- Moore, T.J., 2007. Working estimates of the social costs per gram and per user for cannabis, cocaine, opiates and amphetamines, Drug Policy Modelling Project Monograph Series No. 14, Sydney, National Drug and Alcohol Research Centre, UNSW.
- Sherk, A., Gilmore, W., Churchill, S., Lensvelt, E., Stockwell, T., Chikritzhs, T., 2019. Implications of cardioprotective assumptions for national drinking guidelines and alcohol harm monitoring systems. International Journal of Environmental Research and Public Health 16, 4956.
- Whetton, S., Shanahan, M., Cartwright, K., Duraisingam, V., Ferrante, A., Gray, D., Kaye, S., Kostadinov, V., McKetin, R., Pidd, K., Roche, A., Tait, R.J., Allsop, S., 2016. The Social Costs of Methamphetamine in Australia 2013/14, Tait, R.J., Allsop, S. (Eds.). Perth, WA, National Drug Research Institute, Curtin University.
- Whetton, S., Tait, R.J., Scollo, M., Banks, E., Chapman, J., Dey, T., Halim, S.A., Makate, M., McEntee, A., Muhktar, A., Norman, R., Pidd, K., Roche, A., Allsop, S., 2019. Identifying the Social Costs of Tobacco Use to Australia in 2015/16, Tait, R.J., Allsop, S. (Eds.). Perth, Australia, NDRI.
- Whetton, S., Tait, R.J., Chrzanowska, A., Donnelly, N., McEntee, A., Muhktar, A., Zahra, E., Campbell, G., Degenhardt, L., Dey, T., Abdul Halim, S., Hall, W., Makate, M., Norman, R., Peacock, A., Roche, A., Allsop, S., 2020a. Quantifying the Social Costs of Cannabis use to Australia In 2015/16, Tait, R.J., Allsop, S. (Eds.). ISBN 978-0-6487367-4-5, Perth, WA, National Drug Research Institute, Curtin University.
- Whetton, S., Tait, R.J., Chrzanowska, A., Donnelly, N., McEntee, A., Muhktar, A., Zahra, E., Campbell, G., Degenhardt, L., Dey, T., Abdul Halim, S., Hall, W., Makate, M., Norman, R., Peacock, A., Roche, A., Allsop, S., 2020b. Quantifying the Social Costs of Pharmaceutical Opioid Misuse and Illicit Opioid Use to Australia in 2015/16, Tait, R.J., Allsop, S. (Eds.). ISBN 978-0-6487367-0-7, Perth, WA, National Drug Research Institute, Curtin University.
- Whetton, S., Tait, R.J., Gilmore, W., Dey, T., Halim, S.A., McEntee, A., Mukhtar, A., Roche, A., Allsop, S., Chikritzhs, T., 2021. Examining the Social and Economic Costs of Alcohol Use in Australia: 2017/18, Tait, R.J., Allsop, S. (Eds.). ISBN 978-0-6487367-5-2, Perth, WA, National Drug Research Institute, Curtin University.