Lower Prices Contributed to Opioid Crisis, According to White House Report

By Kelly Burch 05/02/19

A new report by the President’s Council of Economic Advisers examined the driving forces of the national opioid epidemic.

drug prices played a role in opioid epidemic
Cheaper means more access. Volodymyr Maksymchuk | Dreamstime.com

A drop in out-of-pocket expenses for prescription opioids helped drive the first wave of the opioid epidemic, according to a new report released by the White House.

The report, written by the President’s Council of Economic Advisers, found that increased insurance coverage for opioids resulted in lower costs on the legal market and the black market.

“Out-of-pocket prices for prescription opioids declined by an estimated 81 percent between 2001 and 2010,” report authors wrote. “The falling prices were a consequence of the expansion of government health care coverage, which increased access to all prescription drugs—including opioids. We argue that these falling out-of-pocket prices effectively reduced the price of opioid use not only in the primary market but also in the secondary (black) market for diverted opioids, from which most people who misuse prescription opioids obtain their drugs.”

During this time, more people had their prescription drugs covered by government insurance programs through Medicare and Medicaid. In 2001, 17 percent of prescription opioids were covered using government insurance. That rose to 63 percent by 2015.

This increased access made opioid use more affordable.

“A person on Medicare would only pay $9.78 per gram, or between $1,785 and $3,570 per year (in 2007 dollars), to fund an opioid addiction," the report authors note.

The authors estimate that lower prices can account for between 31 and 83 percent of the rise in opioid deaths between 2001 and 2010, but other factors were also at play during this first wave of the opioid epidemic.

“Falling out-of-pocket prices could not have led to a major rise in opioid misuse and overdose deaths without the increased availability of prescription opioids resulting from changes in pain-management practice guidelines that encouraged liberalized dispensing practices by doctors, illicit ‘pill mills,’ increased marketing and promotion efforts from industry, and inadequate monitoring or control against drug diversion,” they wrote.

Cost also played a part in the second wave of the epidemic, when people who had become hooked on pills turned to even less expensive street drugs, including heroin and fentanyl, to get their fix.

“The reduction in prescription opioid misuse had the unintended consequence of raising demand for cheaper, more readily available substitutes in the illicit market and thus opened a market opportunity for illicit drug suppliers to fill,” report authors wrote.

Today, access to opioids is tightly controlled for people on Medicare, following legislation passed in 2018. 

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Kelly Burch writes about addiction and mental health issues, particularly as they affect families. Follow her on TwitterFacebook, and LinkedIn.