The following paper consists of detailed extracts from a paper which analyses carefully the costs and benefits of effective drug prevention initiatives. I makes sobering reading when the costs to society of substance abuse are revealed. Good drug prevention clearly benefits the whole of society – and especially tax-payers – not just the individual.
Whilst this document relates to the United States there is no doubt that similar results would be attainable in the United Kingdom.

1. Executive Summary
Policymakers and other stakeholders can use cost-benefit analysis as an informative tool for decision making for substance abuse prevention. This report reveals the importance of supporting effective prevention programs as part of a comprehensive substance abuse prevention strategy. The following patterns of use, their attendant costs, and the potential cost savings are analyzed:
Extent of substance abuse among youth
• Costs of substance abuse to the Nation and to States
• Cost savings that could be gained if effective prevention policies, programs, and services were implemented nationwide
• Programs and policies that are most cost beneficial

1.1. Costs of Substance Abuse
Studies have shown the annual cost of substance abuse to the Nation to be $510.8 billion in 1999 (Harwood, 2000). More specifically,

• Alcohol abuse cost the Nation $191.6 billion.

• Tobacco use cost the Nation $167.8 billion.

• Drug abuse cost the Nation $151.4 billion.

Substance abuse clearly is among the most costly health problems in the United States. Among national estimates of the costs of illness for 33 diseases and conditions, alcohol ranked second, tobacco ranked sixth, and drug disorders ranked seventh (National Institutes of Health [NIH], 2000). This report shows that programs designed to prevent substance abuse can reduce these costs.

1.2. Savings From Effective School-Based Substance Abuse Prevention
If effective prevention programs were implemented nationwide, substance abuse initiation would decline for 1.5 million youth and be delayed for 2 years on average. It has been well established that a delay in onset reduces subsequent problems later in life (Grant & Dawson, 1997; Lynskey et al., 2003). In 2003, an estimated:
• 8 percent fewer youth ages 13 to 15 would not have engaged in binge drinking
• 11.5 percent fewer youth would not have used marijuana
• 45.8 percent fewer youth would not have used cocaine
• 10.7 percent fewer youth would not have smoked regularly

The average effective school-based program in 2002 costs $220 per pupil including materials and teacher training, and these programs could save an estimated $18 per $1 invested if implemented nationwide. Nationwide, full implementation of school-based effective programming in 2002 would have had the following fiscal impact:
• Saved State and local governments $1.3 billion, including $1.05 billion in educational costs within 2 years
• Reduced social costs of substance-abuse–related medical care, other resources, and lost productivity over a lifetime by an estimated $33.5 billion
• Preserved the quality of life over a lifetime valued at $65 billion

Although 80 percent of American youth reported participation in school-based prevention in 2005 (SAMHSA, 2004), only 20 percent were exposed to effective prevention programs (Flewelling et al., 2005). Given this level of participation, it is possible that some expected benefits already exist for these students, and the estimates in this paper are adjusted for these probable benefits. These cost-benefit estimates show that effective school-based programs could save $18 for every $1 spent on these programs.

Table A1 in the appendix lists 35 effective prevention programs and strategies and the estimated cost-benefit ratios for each program. The array of demonstrated effectiveness among prevention programs and strategies is impressive. Of the 35 substance abuse prevention programs, practices, or related interventions, 15 reduced medical, criminal justice, and other spending by more than the cost to implement the program.

1.3. Conclusion
The cost of substance abuse could be offset by a nationwide implementation of effective prevention policies and programs. SAMHSA’s Strategic Prevention Framework should include a planning step that considers cost-benefit ratios. Communities should consider a comprehensive prevention strategy based on their unique needs and characteristics and use cost-benefit ratios to help guide their decisions. Model programs should include data on costs and estimated cost-benefit ratios to help guide prevention planning.

Increasingly, the American public supports investment in prevention programs as a strategy for dealing with America’s substance abuse problems (Blendon & Young, 1998; Maguire & Pastore, 1996). Research demonstrates that substance abuse prevention programs work: they can reduce rates of substance use and can delay the age of first use. Studies also have shown that prevention programs not only prevent substance abuse; they can contribute to cost savings (Aos et al., 2004; Caulkins et al., 2002; Miller & Hendrie, 2005; Swisher et al., 2003).

As well as reporting the ratio of benefits to costs, a cost-benefit analysis typically provides a net benefits estimate, which is computed by subtracting the cost of intervention from the benefits of the intervention (Mishan, 1988). For example, the All Stars program has a cost-benefit ratio of 34:1 which means it returns $34 dollars in savings for every dollar invested, yielding net benefits of $4,670 per pupil ($4,810 in social cost savings minus $140 in program costs). By comparison, the Life Skills Training program has a cost-benefit ratio of 21:1 and yields net benefits of $4,380 per pupil.

Although the All Stars and Project Northland programs save more than it costs to develop and deliver them, the return on investment in All Stars is 34:1, and the return on Project Northland is just 17:1. However, other factors should be considered, e.g., the level of outcome and long-term effects. For example, Project Northland also involves developing a community coalition that remains after the program and can address related issues without additional costs. In allocating resources, analysts often trade off the most efficient investments—those with the highest cost-benefit ratios against those with a broader reach that can produce a larger total benefit.

Direct Economic Impact of Substance Abuse
NIH ranks alcohol second, tobacco sixth, and drug disorders seventh among estimated costs of illness for 33 diseases and conditions (NIH, 2000). The year 1999 is the most recent year, with estimates available for all three categories of substance abuse. Despite a smaller number of deaths from alcohol use, alcohol-related costs are greater than tobacco costs because alcohol-related mortality tends to occur at younger ages than smoking-related mortality.
The categories used to develop the alcohol and drug abuse estimates include specialty alcohol and drug services; medical consequences; lost earnings due to premature death; lost earnings due to substance-abuse–related illness; goods or services related to crashes, fires, criminal justice, other; and lost earnings resulting from crime. The categories used to develop the smoking estimates were medical consequences and lost earnings due to morbidity and premature death. Tobacco prevention costs are excluded; the largest share of these prevention costs, State spending, averages $600 million annually (Campaign for Tobacco-Free Kids, 2004).

The social cost of alcohol, tobacco, and drug abuse in the United States by substance are as follows:. Alcohol abuse was responsible for $191.6 billion (37.5 percent) of the $510.8 billion, tobacco use was responsible for $167.8 billion (32.9 percent), and drug abuse was responsible for $151.4 billion (29.6 percent).

Loss of potential productivity and earnings: Smoking accounted for almost 440,000 deaths in 1999 (Fellows et al., 2002), alcohol abuse accounted for 42,000 (Harwood, 2000) to 76,000 deaths (Midanik et al., 2004), and drug abuse accounted for an additional 23,000 deaths (Harwood & Bouchery, 2001). Additional productivity losses occurred when individuals who abused substance

Lost productivity makes up two-thirds of the costs of substance abuse. Lifetime wage and household work lost to premature death is the largest component of these costs, followed closely by work lost to acute and chronic illness and injury. Incarceration results in $32 billion in earnings losses. Almost $25 billion more is lost when people who abuse substances pursue criminal careers rather than enter the labor force.

These estimates are conservative; they omit some costs that result from substance abuse. Specifically, they exclude (1) the impact on the quality of life of those who abuse substances and the people they harm and (2) the health care costs and work losses of victims who were involved in alcohol-attributable crashes even though they had not been drinking. These estimates also exclude the impact on the quality of life.

Costs and Benefits of Preventing Substance Abuse
This section uses the percentage of youth who might have started using substances in the United States and published estimates of prevention effectiveness to analyze the probable impact of a nationwide implementation of effective school-based substance abuse prevention programming. The following were estimated:
• Potential reduction in substance use and abuse as a result of providing effective school-based prevention interventions to all U.S. youth ages 12–14 in middle school
• Potential social cost savings as a result of providing effective school-based prevention interventions to all U.S. youth ages 12–14
• Social return on investment in preventive intervention measured in terms of costs and benefits
• Potential State government savings in juvenile justice and education costs as a result of providing effective school-based prevention interventions to all U.S. youth ages 12–14

The analyses primarily draw on data from the following sources:
• A report by Caulkins and colleagues (1999) for RAND titled An Ounce of Prevention, a Pound of Uncertainty: The Cost-Effectiveness of School-Based Drug Prevention Programs
• The NCASA report titled Shoveling Up: The Impact of Substance Abuse on State Budgets (NCASA, 2001)
• National Survey on Drug Use and Health (NSDUH) (SAMHSA, 2004))
• Youth Risk Behavior Survey (YRBS) (Centers for Disease Control and Prevention, 2003)
Two meta-analyses on the effectiveness of school-based youth substance abuse prevention programs (Aos et al., 2004; Hansen et al., 2004)

4.1. Youth Delaying or Never Using Substances
Nearly every youth ages 12–14 is at risk for trying alcohol, tobacco, and drugs and may be aware of social norms and feel peer pressure to start using these substances. The initial analysis involved estimating the number of youth who would not have tried or would not regularly use these substances if effective school-based prevention programs were in place nationwide. To determine these estimates, the number of youth ages 12–14 was multiplied by three factors: the low, medium, and high estimates of the percentage of youth who would delay initiating use of each substance if they received effective school-based prevention programming. The effectiveness estimates were drawn from two meta-analyses on the effectiveness of school-based youth substance abuse prevention programs (Aos et al., 2004; Hansen et al., 2004

The midrange estimates of youth receiving effective school-based prevention services across intervention programs are as follows:
• 4.7 percent will delay using alcohol
• 4.1 percent will delay using marijuana
• 2.7 percent will delay using cocaine
• 4.7 percent will delay smoking

These estimates represent the mean values from an array of school-based prevention programs that evaluations found significantly (>.05) delayed or prevented initiation of youth substance use. The individual estimates of effectiveness were derived from meta-analyses that generally excluded evaluations that did not use some sort of comparison or control group. Prevention programs for cocaine use had the smallest range of effectiveness from 2.3 percent to 5.3 percent of youth delaying or never initiating use. Prevention programs that delayed or prevented initiation of alcohol use had the greatest range of 1 percent to 10.3 percent.

Table 4 shows a range of estimates of the number of youth who would delay substance use if they received effective school-based prevention programming. For all youth ages 12–14, universal prevention programming in 2002 would have delayed 1.5 million initiations of substance use, with a range from 0.7 to 3 million. The largest absolute impact would be on drinking, with 446,000 youth delaying their first drink, followed closely by smoking with 436,000 youth delaying their first smoke. (A youth who delays both smoking and drinking is counted in both categories.
For drug abuse, the corresponding estimates are 247,000 youth delaying their first cocaine use and 389,000 delaying their first use of marijuana.

The rationale for this analysis is that when youth delay onset of substance use, on average, two years less of lifetime use occurs. When prevention programs delay the onset of substance use, the number of future dependent users also decreases (Grant & Dawson, 1997), but the analysis does not estimate that further saving.

Effective nationwide school-based prevention programming for youth ages 12–14 in 2002 would have prevented 267,000 youth from drinking during 2003, 183,000 from using marijuana, 138,000 from using cocaine, and 205,000 from using tobacco . Prevention programming also would have prevented 169,000 youth from binge drinking in 2003, and 72,000 youth from smoking regularly.

Effective prevention programs would reduce binge drinking by 8 percent, marijuana use by 11.5 percent, cocaine use by 45.8 percent, and regular smoking by 10.7 percent

The impact of substance abuse prevention may extend over a lifetime and is most obvious when prevention fails to deter an individual from substance abuse, and the abuse results in premature death. Substance abuse may last many years and often entails periods of recovery and relapse. Furthermore, the effects of substance abuse may continue well beyond the period of time when an individual is actively abusing substances.

The following cost factors were considered:
• Medical costs
• Other resource costs, ranging from property damage to police, criminal justice, litigation, and insurance administration expenses
• Lost wage and household work
• Value of pain, suffering, and loss in quality of life

Cost-Benefit Ratios
To achieve these savings school-based prevention programming would cost an estimated $220 per pupil nationwide. This cost represents the average across the 11 school-based prevention programs analyzed in this section. Knowledge of program costs makes it possible to estimate the cost-benefit measures defined in Section 2. The return on investment in school-based prevention services would range between $7.40 and $36 per dollar invested, with a medium estimate of $18 The best estimate equates to a net saving of $3,740 per youth served, including a $74 net savings in medical and other resource costs ($294–$220). Since expected medical and other resource cost savings exceed program costs, the program would yield net cost savings to society. School-based substance abuse prevention programming that effectively addresses substance abuse appears to be an excellent investment and is likely to pay for itself in resource cost savings alone.

For every dollar spent per pupil, society would save $18.

SAMHSA’s continuum of care suggests some overlap in prevention programs (i.e., universal, selected, and indicated). For example, when the Strengthening Families Program prevents a youth from adopting multi-risk behavior, it clearly is prevention. Similarly, when Project Northland prevents a youth from ever trying cocaine or delays initiation of cocaine use, it unambiguously prevents illicit substance use. Indicated prevention programs can also work to prevent an increase or expansion of early experimental substance use behaviors. When the topic is preventing the costs of substance abuse, the distinction blurs between programs that prevent binge drinking per se and those that prevent costly adverse consequences attributable to substance abuse (e.g., programs to prevent drinking and driving).

Universal preventive interventions are targeted to the general public or a segment of the entire population with an average probability of developing a disorder, risk, or condition. Selected preventive interventions are targeted to specific populations whose risk of a disorder is significantly higher than average, either imminently or over a lifetime. Indicated preventive interventions are targeted to designated individuals who have minimal but detectable signs or symptoms suggesting a disorder or who carry biological markers for a disorder often referred to as high risk. Youth ages 12–17 who abuse substances constitute approximately 11 percent of people who engage in binge drinking and 15 percent of people involved in illicit drug use in the United States

Family-centered interventions with a school component generally are more costly than school-based life skills training, but they offer larger benefits per youth assisted. The most effective programs strengthen youth bonds to family, school, and community, increasing protective factors while reducing risk factors. These include Adolescent Transitions, Strengthening Families, Guiding Good Choices, Project Northland, and SOAR. Although family-centered programs achieve more in terms of bonding and protective factors, some narrower life skills programs offer larger returns per dollar invested. With a limited budget, life skills programs allow a school system to reach the most children. However, the same money probably would yield greater benefits per youth assisted if spent targeting the broader family-centered programs and related mentoring to the schools at highest risk.

As these findings indicate, the costs of substance abuse to society are significant, and cost savings may offset the cost of providing effective prevention

Substance abuse has a wide range of adverse consequences. In order to optimally reduce consumption and its adverse consequences, a comprehensive package of prevention programs and strategies is required. No single intervention will reduce the problem so dramatically that no further public action is desirable. Given the number and diversity of proven interventions, optimal resource allocation requires selecting the most complementary, politically feasible, and culturally and demographically appropriate set to maximize a return on investment within the available funding. Of critical concern is to identify a sensible package of interventions that complements existing interventions. Policymakers selecting substance abuse interventions can apply a series of filters. The estimates in this report provide the first filter: eliminating interventions that offer a questionable return on investment.

However, new and improved versions of the original DARE program, Here’s Looking At You (Farley & Associates 2002) and the Adolescent Substance Abuse Prevention Study (Sloboda & Hawthorne, 2003) have produced better results and consequently better cost-benefit ratios and should not be dismissed arbitrarily. This financial information should be used as only one of an array of measures in selecting effective programs. Additional filters that policymakers can use in selecting interventions are political feasibility, local priorities, appropriateness for the target population, cultural sensitivity, affordability, and the immediacy of the impact (weeks versus years). Political feasibility is especially important. A slightly less cost-beneficial program can be superior if the alternative with the higher return has a lower chance of widespread implementation or involves a long delay in implementation. As the subsections that follow describe, all things are not equal when selecting a package that yields the maximum gains at the lowest possible price. Other factors, such as aggregate benefits obtained, overlapping effects, spillover costs and benefits, and government cost can and should weigh into the decision process.

Conclusion
If effective prevention programs were implemented nationwide, substance abuse initiation would decline for 1.5 million youth and be delayed for 2 years on average. In 2003, an estimated:
• 8 percent fewer youth ages 13–15 would not have engaged in binge drinking
• 11.5 percent fewer youth would not have used marijuana
• 45.8 percent fewer youth would not have used cocaine
• 10.7 percent fewer youth would not have smoked regularly

The average effective school-based program costs $220 per pupil. It would save an estimated $18 per $1 invested if implemented nationwide. Nationwide school-based effective programming in 2002 would have had the following fiscal impact:
• Saved State and local governments $1.3 billion, including $1.05 billion in educational costs during 2003 and 2004
• Reduced social costs of substance-abuse–related medical care, other resources, and lost productivity over a lifetime by an estimated $33.5 billion
• Preserved the quality of life over a lifetime valued at $65 billion

These cost-benefit estimates show that effective school-based programs pay for themselves and more. For every dollar spent on these programs, an average of $18 dollars per student would be saved over their lifetime. Among 10 effective school-based life skills programs, the average return on investment exceeded $15 to 1. That is, every dollar spent on these programs returned an average of $15 dollars per student. The probable costs and cost savings involved in implementing a composite of these programs for middle school youth ages 12–14 nationwide were estimated. The average program would delay more than a million initiations of alcohol, cocaine, marijuana, or tobacco use by youth for an average of 2 years. Its cost would be $220 per pupil.29
The out-of-pocket expenses would be repaid by savings to the education system alone in less than 2 years. The program would offer additional savings to State and local governments by reducing spending on Medicaid, police, and other criminal justice services. School-based programs that offer a particularly large return on investment include All Stars, Family Matters, Keepin’ It Real, Life Skills Training, and Project Northland. Although Project TND and STARS for Families yielded lesser returns than competing NREPP programs, they still yielded $4 in savings per $1 invested. Programs designed to strengthen families generally cost more than the school-based life skills programs. Several of them also were highly cost-beneficial and offered much larger returns in the aggregate per youth served than the school-based life skills programs.
In a program targeting families with low income, intensive home visitation, coupled with preschool enrichment, reduced infant/toddler abuse (Aos et al., 1999; Karoly et al., 1998). As these toddlers reach adolescence and adulthood, visitation programs also can reduce a range of problems including substance abuse and violence. However, the net returns are often realized in the long term (for actual longitudinal cost-benefit results see Karoly, et al., 1998; Schweinhart, et al., 1993). The proven interventions often cover different aspects of the problem (such as youth drug use initiation, impaired driving, and violence), which make a complementary set of interventions more beneficial. Several interventions are best directed toward different aspects of the problem. If they are massed against the same aspect, the size of that aspect will shrink, and the return on added interventions will decline below the levels shown in this study. Taken as a whole, the benefits of substance abuse prevention well outweigh the costs of providing that service. Cost-benefit ratios can guide the selection of an optimal intervention package within the available resources. Political feasibility, cultural and demographic differences, and local priorities also must be considered.

Source: Miller, T. and Hendrie, D. Substance Abuse Prevention Dollars and Cents: A Cost-Benefit Analysis, DHHS Pub. No. (SMA) 07-4298. 2008