U.S. Prescription Opioid Crisis: What Are the True Costs?

Topics: Data Analytics, Financial Crime, Government, Government Fraud, Risk Management


Opioid addiction is not just a major health crisis in America, it’s also a major source of fraud that costs the government millions of dollars each year.

Overall, prescription and illicit opioids were involved in 42,249 deaths in 2016 — five times higher than the number of opioid-related deaths in 1999. More than 300,000 Americans have died from opioid drug overdoses since 2000. Currently, an average of 115 Americans die every day from an opioid overdose. Remarkably, for the second year in a row, the increase in opioid-related deaths was responsible for a decrease in overall U.S. life expectancy in 2016.

More Than Opioid-Related Deaths

However, opioid-related deaths are only part of the opioid crisis.

  • From July 2016 through September 2017, emergency department visits for suspected opioid overdoses increased 30%. During this period, opioid overdoses increased for men and women, all age groups and in all regions of the U.S. Currently, more than 1,000 people are treated every day for misusing prescription opioids.
  • From 2010-2015, hepatitis C virus (HCV) infection rates increased 294%, with the highest rates among young persons who inject drugs. HCV is a leading cause of chronic liver disease.
  • Large employer-sponsored health plans paid more than $2.6 billion in 2016 for opioid addiction and overdose treatment according to an analysis from the Kaiser Family Foundation.
  • The U.S. Council of Economic Advisors estimated that the overall economic cost of the opioid crisis was $504 billion in 2015 or 2.8% of GDP that year.

According to the Centers for Disease Control and Prevention (CDC), more than 40% of the more than 42,000 U.S. opioid overdose deaths in 2016 involved a prescription opioid. Because prescription opioids account for such a large percentage of opioid deaths and because prescription opioid addiction can lead to the abuse of illicit opioids, the federal government has focused considerable resources to prevent the overuse and abuse of prescription opioids.

Federal Government’s Response to the Opioid Crisis

In July 2017, the Department of Justice (DOJ) and the Department of Health and Human Services (HHS) announced the largest ever healthcare fraud enforcement action by the Medicare Fraud Strike Force. The action resulted in criminal charges against 412 defendants in 41 federal districts, including 115 doctors, nurses and other medical professionals for their alleged roles in healthcare fraud schemes involving $1.3 billion in false claims. More than 120 of the defendants, including physicians, were charged for their roles in prescribing and distributing opioids and other narcotics.

In August 2017, the DOJ announced the formation of the Opioid Fraud and Abuse Detection Unit. The pilot program focuses specifically on opioid-related healthcare fraud using data to identify and prosecute individuals who are contributing to the prescription opioid epidemic. The program also funded 12 experienced Assisted U.S. Attorneys for a three-year term to focus exclusively on investigating and prosecuting healthcare fraud relating to prescription opioids, including “pill mill schemes and pharmacies that unlawfully divert or dispense prescription opioids for illegitimate purposes.”

DOJ Creates Prescription Interdiction & Litigation (PIL) Task Force

In February 2018, the DOJ announced the creation of a new effort, the DOJ Prescription Interdiction & Litigation (PIL) Task Force, to fight the prescription opioid crisis. The PIL Task Force will use all available criminal and civil law enforcement tools to combat opioid overdoses in the U.S. With its focus on opioid manufacturers and distributors, the PIL Task Force will:

  •        Hold opioid manufacturers accountable for unlawful practices;
  •        Ensure opioid manufacturers are marketing their products truthfully;
  •        Examine existing state and local government lawsuits against opioid manufactures to determine what assistance federal law can provide;
  •        Seek compensation for the federal government from any party whose illegal activities contributed to the government’s costs related to the opioid crisis;
  •        Hold distributors such as pharmacies, pain management clinics, drug testing facilities and individual physicians accountable for unlawful actions;
  •        Ensure distributors and pharmacies are obeying Drug Enforcement Agency (DEA) rules designed to prevent diversion and improper prescribing of opioids; and
  •        Use the False Claims Act (FCA) to “crack down” on pain-management clinics, drug-testing facilities and physicians that make improper opioid prescriptions.

HHS’s Efforts to Protect Medicare Beneficiaries

In addition to the DOJ-led efforts to curb prescription opioid abuse, HHS Office of Inspector General (OIG) has focused its efforts to protect Medicare beneficiaries from prescription drug abuse. In 2016, Medicare Part D, which is an optional prescription drug benefit for Medicare beneficiaries, covered 43.6 million individuals.

In July 2017, the OIG reported that:

  • One in three Medicare Part D beneficiaries received a prescription opioid in 2016;
  • About 500,000 Medicare beneficiaries received high amounts of opioids;
  • Nearly 90,000 Medicare beneficiaries were identified as a “serious risk” either because they received extreme amounts of opioids or because they appeared to be doctor-shopping; and
  • About 400 prescribers were identified as having questionable opioid prescribing patterns for beneficiaries at serious risk. These questionable prescriptions cost Medicare Part D a total of $66.5 million.

As a direct result, Medicare Part D paid nearly $4.1 billion for 79.4 million opioid prescriptions in 2016.

Awareness and Treatment Alternatives

In addition to enforcement efforts, other agencies in the federal government are focusing on awareness and treatment alternatives:

  • The CDC has launched the Prescription Awareness Campaign, which features the stories of people who have lost loved ones to prescription opioid overdose and people in recovery;
  • The National Institutes of Health (NIH) is in discussions with the pharmaceutical industry to investigate non-addictive pain relievers, new addiction and overdose treatments and a potential vaccine for addiction; and
  • The Department of Defense (DOD), Department of Veterans Affairs (VA), NIH and HHS are collaborating on a six-year, $81 million joint research partnership focusing on non-drug approaches to managing pain for service members and veterans.

It appears that the increased attention to the opioid crisis has started to pay dividends. In his remarks to the Western Conservative Summit on June 8, U.S. Attorney General Jeff Sessions noted that preliminary data from the CDC showed overdose deaths from prescription opioids declined last fall.

Want to stay up-to-date on our thought leadership pieces and other topics such government fraud? Follow the Risk & Compliance Spotlight page on the Legal Executive Institute’s blog.