Which of tobacco, alcohol or illicit drugs imposes the greatest burden on society: A comparison of the social cost

of substance abuse in Switzerland

Prof. Claude JeanrenaudSonia PellegriniGaëlle Widmer

Venice, March 18-20, 2005

FINANCING MENTAL AND ADDICTIVE DISORDERS

Institute of Economic and Regional ResearchUniversity of Neuchâtel, Switzerland

Research questions

How do tobacco, alcohol and illicit drug social cost compare?

Are the results of the Swiss study consistent withprevious work?

Vitale et al. (1998) The social cost of tobacco consumption in Switzerland, University of Neuchâtel.

Jeanrenaud et al. (2003) The social cost of alcohol abuse in Switzerland, University of Neuchâtel.

Jeanrenaud et al. (2005) The social cost of illicit drug use in Switzerland, University of Neuchâtel.

Three recent works on the social cost of substance abusein Switzerland have been commissioned by the Swiss Federal Office of Public Health.

The same analytical framework and the same methodology were applied in the three studies. However, the reference year is 1995 for the tobacco work, 1998 for the alcohol study and 2000 for the study on illicit drug. We didn’t adjust the results for change in the price level. The price increase has been very moderate between 1995 and 2000.

What does “social cost”of substance abuse really mean?

All health and non health implications of substance abuse.

Adverse effect are borne by users, by users’ relatives, by the community at large.

Tangible and intangible effects are part of the social burden.

Social cost of substance abuse reflect a loss in welfare for the population.

Main cost categories

Direct costs: they correspond to the resources that are diverted to medical treatment, therapy, law enforcement, prevention, and are thus no longer available for other beneficial use.

Indirect costs: they reflect the value of the production that is not made available to the society as a consequence of work impairment or premature death. Indirect costs correspond to the value of the forgone production.

Most previous studies on drugs only value direct and indirect cost when estimating the social cost of substance abuse. The assessment of these (tangible) cost categories is straightforward, as we can use market prices to estimate the value of the resources used or foregone.

A change in health state with its consequences on the quality of life of drug users and their relatives is a significant part of the social burden of drug use. It is not possible to rely on some market price to express intangible cost in monetary terms.

Direct cost Indirect cost

Intangible (or human) cost

forgoneresources

Divertedresources

non resource cost

Cost assessment method

Two broad categories of method : preference-based (or willingness-to-pay) vs. non preference-based (or production based-method).

Direct cost : treatment cost method, replacement cost method.

Indirect cost : human capital (discounted value of actual and future forgone production).

Human cost : contingent valuation method is a willingness-to-pay method based on a hypothetical market.

When using simultaneously production based-methods and a willingness-to-pay method there is a risk of double counting.

The contingent valuation method measures the maximum amount that an individual is prepared to pay in order to reduce a specific health risk and avoid its consequences, including a drop in income or additional out-of-pocket payments for medical treatment.

The contingent valuation survey has to be carefully designed in order to limit the assessment of quality-of-life change.

Epidemiological data

Tobacco Alcohol Illicit drugs

Prevalence* 1 950 000 357 000 30 000Premature death 8 300 2 137 322Loss of productive life years** 49 700 28 500 11 300Average loss of life year 6.0 13.3 35.1

** Up to 74

* Tobacco : use ; Alcohol : harmful use and dependency; illicit drugs : dependency to heroïn and cocaine.

Epidemiological data

Premature death caused by illicit drugs affect young people (average age 31.8 years).

Approximately 35 productive life years lost on average per drug attributable death.

Average life years lost per case attributable to alcohol is 13,3 (the leading cause of acute premature death caused by alcohol is motor vehicle accident).

The average the average loss of life years per death attributable to smoking is 6 years, which means than on the average, people die from smoking after the official age of retirement (64 for women and 65 for men).

Result: direct cost

Is the product turnover a part of the social cost?

Is money spent for prevention to be added to the social cost?

Tobacco Alcohol Illicit drugs

Medical cost

HIV/AIDS treatment - -

Dependency treatment no

Harm reduction - -

Property damage no noLaw enforcement cost no no

Other public policy cost*

Product turnover no no no* Prevention and research

Direct cost

For different reasons, treatment cost for tobacco and alcohol related diagnoses are underestimated.

There are no estimate of fire smoking-related fire losses.

Responsibility of alcohol in car accident is often not reported.

Limited resources are devoted to prevention.

Illicit drug policy clearly set priority on repression.

Tobacco Alcohol Illicit drugsTreatment* 1 211.8 594.8 560.8

Material dammages 111.9

Public policy cost Prevention 9.0 20.0 14.6

Law enforcement costs 19.7 798.4

Total 1 220.8 746.4 1 373.8

*Medical treatment and depency therapy

Direct costs, CHF million

Result: production losses

Mortality : paid production loss Mortalité : domestic production loss Morbidity : paid production loss Morbidity : domestic production loss Forgone production of criminals - - no

Indirect (production loss)

Mortality cost is the present value of lost earnings (or production) due to premature death.

Morbidity cost is the production lost through work impairment, reduced efficiency at work or a higher risk of being unemployed.

Illicit drugs morbidity cost are four times higher than those related to alcohol.

In the Swiss study data on short or long term work impairment caused by alcohol related diagnoses were not available ; the morbidity cost is then a very conservative value.

Tobacco Alcohol Illicit drugs

Indirect mortality cost 1 829.0 1 261.6 637.6Indirect morbidity cost 2 587.0 430.0 1 781.8

Indirect cost total 4 416.0 1 691.6 2 419.4

Indirect cost, CHF million

Result: loss in quality of life

Valuing quality of life change

Method : contingent valuation survey.

Face to face interviews.

Framing : ex-ante insurance-based question (tobacco, alcohol) and ex-post user-based question (alcohol, illicit drug).

Elicitation techniques : paiement cards.

ex-ante ex-postinsurance-based question user-based question

Tobacco all intangible

Alcohol damage to the bodypsychosocial and behavioural

effects

Illicit drugs all intangible

Framing

Quality of life cost

Human cost correspond to the monetary equivalent of the quality of life change for the consumer and his or her relatives.

Quality of life loss per case for alcohol (CHF 12’000) and illicit drug (CHF 13’040) are quite similar.

Households would be willing to accept a significant reduction in income for a (hypothetical) perfect treatment for a member of the household.

The lower cost per case for tobacco (CHF 2’540) was expected.

Tobacco Alcohol Illicit drugs*

Physiopathological effects 4 961.0 2 539.1Psychosocial and behavioural effects - 1 749.6Total 4 961.0 4 288.7 391.3

* Dependency to heroïne and cocaïne** Psychosocial and behavioural effects : alcohol dependant person only

391.3

Human cost : loss in quality of life

How do social burden of tobacco, alcoholand illicit drug compare

Tobacco Alcohol Illicit drugs

Direct cost 1 220 726 1 374Indirect cost 3 809 1 465 2 314Human cost 4 961 4 288 391

Social cost 9 990 6 480 4 079

Social cost of substance abuse in CHF million

The highest global burden is caused by tobacco (almost CHF 10 billions).

Part of the difference between alcohol and tobacco global burden is due to the lack of quantitative data on behavioural effect of alcohol (productivity at work, violence…).

There are three main reasons for the relatively high burden caused bye illicit drugs: the huge resources devoted to law enforcement, the high proportion of drug dependant individuals who are not working for many years, most death are of young man or woman (on average just over 30).

Cost per case

The marginal benefit of a prevention program is the highestfor illicit drug, followed by alcohol and tobacco.

Tobacco Alcohol Illicit drug

Prevalence* 1 950 000 357 000 30 000Attributable cost, CHFmillion per year 9 982 4 900 3 510Cost per case, CHF 1000 per year** 5.1 13.7 117.0

** Cost per case for illicit drug without law enforcement : CHF 103.7 thousands

Cost per case

* Tobacco : use ; Alcohol : harmful use and dependency ; Illicit drug : dependency on heroin and cocaine)

Comparison with previous work

Tobacco Alcohol Illicit drugs

Switzerland

Tangible costs 1.4 0.6 0.9 All costs 2.7 1.7 1.0United States - 2.4 1.6(Harwood et al. 1998)Australia

(Collins and Lapsley 2002) Tangible costs 1.3 1.0 0.9 All costs 3.7 1.3 1.1Canada(Single et al. 1998) 1.4 1.1 0.2Scottland(Varney and Guest 2002) - - 1.5France(Kopp et al. 2002) 1.1 1.2 0.2

Cross country comparison : cost of substance abuse as a % of GDP

The values need not be the same as the prevalence of substance use vary significantly across countries.

The convergence is good for tobacco (tangible cost make between 1.1 and 1.4 percent of GDP).

The alcohol-related costs for Australia, Canada, and France are very close (between 1.0 and 1.2 of GDP for tangible).

Switzerland (low value for alcohol-related cost) and United States (high value) are outliers.

Discussion

The social cost of substance abuse is an issue of key interest to policy makers.

The priorities in health policies and the allocation of resources (to prevention, research, dependence therapy) should reflect the importance substance use as a public health problem.

Social cost is a central element to evaluate the severity of a public health problem.

Are the cost estimates reliable? Is the burden of smoking really 50% higher than the burden of alcohol abuse?

Is there not a risk of bias in the estimate due to the unequal availability of data (frequency and impact)?

It would mean that the burden of alcohol and illicit drug is underestimated.

The severity of a health problem also depends of the availability of effective methods to deal with the problem. The proper indicator would then be the avoidable cost rather than the social cost.