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Opioid crisis to cost $2.15 trillion? ‘No amount of money can ever compensate for the pain’

Alexis Keenan and Adriana Belmonte

U.S. states are claiming that opioid manufacturers, distributors, and others who fueled the country’s decades-long opioid crisis will cost the economy at least $2.15 trillion by the year 2040. 

The figure was reported in a filing made public Monday in the Southern District of New York in the bankruptcy case for OxyContin maker Purdue Pharmaceutical. 

“The opioid epidemic has ravaged this country as a single family has made billions profiting from the destruction it caused,” New York Attorney General Letitia James said in a statement emailed to Yahoo Finance. “The millions of families that have suffered as the result of addiction, ailments, and death can never be repaid for their losses, and no amount of money can ever compensate for the pain that so many now know.”

U.S. first lady Melania Trump visits a field of American flags, each flag representing a child in the foster system in Cabell County, WV, most of them due to the opioid crisis, on July 8, 2019. (Photo: REUTERS/Al Drago)
U.S. first lady Melania Trump visits a field of American flags, each flag representing a child in the foster system in Cabell County, WV, most of them due to the opioid crisis, on July 8, 2019. (Photo: REUTERS/Al Drago)

Between 2007 and 2019, the states estimated that their systems took a $630 billion hit. Anticipated costs of $1.53 trillion from 2020 to 2040 are estimated to run up the rest of the tab.

“As expected,” a Purdue spokesperson stated, “claims have been filed by a variety of private and public entities, including the states and territories, and it is typical for claims to be filed in amounts substantially larger than what is ultimately allowed by the court.”

The company, which filed for bankruptcy in September amid mounting lawsuits against opioid supply chain participants, proposed delivering more than $10 billion in value — including 100% of Purdue’s assets — toward claimants, communities, opioid addiction treatment, and overdose reversal medicines.

‘An extraordinary number of people are taking opioids’

In December 1995, the FDA approved a new opioid known as Oxycodone. Subsequently, according to the National Institute on Drug Abuse, “pharmaceutical companies reassured the medical community that patients would not become addicted to prescription opioid pain relievers, and health care providers began to prescribe them at greater rates.”

The cost of millions of Americans becoming addicted to prescription opioids on the country’s economy has not gone unnoticed. Last year, while testifying before the House Financial Services Committee, Federal Reserve Chair Jerome Powell spoke of its effects on the workforce. 

“An extraordinary number of people are taking opioids in one form or another and it weighs on labor force participation,” Powell said. “It’s a national crisis, really. The humanitarian crisis of it is completely compelling but the economic impact is also quite substantial.”

Opioid prescribing rates, county-level U.S., 2014. (Source: CDC)
Opioid prescribing rates, county-level U.S., 2014. (Source: CDC)

The crisis has also cost a fortune in lost tax revenue: Between 2000 and 2016, “opioid misuse cost state governments $11.8 billion, including $1.7 billion in lost sales tax revenue and $10.1 billion in lost income tax revenue,” according to a study conducted by researchers at Penn State University. The study also found that the federal government lost $26 billion in income tax revenue during that time span. 

With the exception of Oklahoma, which reached a settlement with Purdue in 2019, and claims from Kentucky prior to 2016, the more than $2 trillion represents the estimated past and future financial toll that U.S. states, the District of Columbia, and U.S. territories believe distributors and manufacturers have inflicted on the country’s health care, criminal justice, child welfare, educational, and workforce infrastructures

A breakdown of the numbers

Harvard Law School professor Mark Roe said the states’ claims, if validated by the bankruptcy court, would share proportionately with all other claims on Purdue. He added that the large size of the claim could signal sizable demands in cases pending against other opioid defendants, which in turn would leave fewer funds for individual plaintiffs.

“That would mean that the plaintiffs will eventually get less than they thought they would yesterday because they would have to share with the states,” Roe said.

And while the states recognize that their financial damage claims far outweigh any realizable remuneration achievable through Purdue’s bankruptcy or otherwise, the data will undoubtedly catch the attention of the cast of opioid supply chain participants embroiled in pending lawsuits across the country.

On Monday, the Wall Street Journal reported that opioid distributors McKesson (MCK), AmerisourceBergen (ABC) and Cardinal Health (CAH), along with opioid manufacturer Johnson & Johnson (JNJ), made a combined $26.4 billion offer to settle with an unidentified number of states. It was previously reported that 21 states turned down an $18 billion settlement offer from the three distributor defendants.

Members of P.A.I.N. (Prescription Addiction Intervention Now) and Truth Pharm staged a protest on Sept. 12, 2019 outside Purdue Pharma headquarters in Stamford, CT. (Photo by Erik McGregor/LightRocket via Getty Images)
Members of P.A.I.N. (Prescription Addiction Intervention Now) and Truth Pharm staged a protest on Sept. 12, 2019 outside Purdue Pharma headquarters in Stamford, CT. (Photo by Erik McGregor/LightRocket via Getty Images)

The financial costs in the current claim vary by state — New York and California are the only two states to top $100 billion at $165.8 billion and $192.1 billion, respectively. 

Below are the financial costs claimed by each state and U.S. territory. The claims do not include amounts unknown or unforeseen to the states at the time of the filing.

Alabama -- $35,331,000,000

Alaska -- $8,942,000,000

Arizona -- $55,792,000,000

Arkansas -- $20,983,000,000

California -- $192,092,000,000

Colorado -- $39,886,000,000

Connecticut -- $50,686,000,000

Delaware -- $15,756,000,000

District of Columbia -- $9,490,000,000

Florida -- $130,480,000,000

Georgia -- $49,828,000,000

Hawaii -- $7,754,000,000

Idaho -- $16,129,000,000

Illinois -- $64,552,000,000

Indiana -- $58,009,000,000

Iowa -- $20,408,000,000

Kansas -- $15,423,000,000

Kentucky -- $42,831,000,000

Louisiana -- $28,061,000,000

Maine -- $14,913,000,000

Maryland -- $49,145,000,000

Massachusetts -- $90,406,000,000

Michigan -- $72,552,000,000

Minnesota -- $32,656,000,000

Mississippi -- $22,154,000,000

Missouri -- $31,860,000,000

Montana -- $8,321,000,000

Nebraska -- $8,321,000,000

Nevada -- $28,692,000,000

New Hampshire -- $8,272,000,000

New Jersey -- $60,526,000,000

New Mexico -- $17,703,000,000

New York -- $165,773,000,000

North Carolina -- $68,208,000,000

North Dakota -- $5,236,000,000

Ohio -- $95,859,000,000

Oregon -- $37,054,000,000

Pennsylvania -- $90,197,000,000

Rhode Island -- $12,189,133,000

South Carolina -- $27,983,000,000

South Dakota -- $5,018,000,000

Tennessee -- $53,629,000,000

Texas -- $87,243,000,000

Utah -- $19,049,000,000

Vermont -- $8,822,000,000

Virginia -- $57,450,000,000

Washington -- $55,155,000,000

West Virginia -- $44,286,000,000

Wisconsin -- $33,417,000,000

Wyoming -- $3,604,000,000

American Samoa -- $105,396,000

Guam -- $415,398,000

Northern Mariana Islands -- $36,668,000

Puerto Rico -- $4,710,000,000

U.S. Virgin Islands -- $283,868,000

Alexis and Adriana are reporters for Yahoo Finance. Follow them on Twitter @alexiskweed and @adrianambells.

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