The U.S. has already suffered more than one million deaths (as of June 2022) in the context of Covid-19. However, this is not the only health crisis America is fighting. Since the late 1990s, more than half a million people have died from an opioid overdose. A recently published paper, on which this article is based, examines how this could have come to be.
The numbers are speaking for themselves: In 2019, more people died from opioids (49,860) than in motor vehicle accidents (38,800) or from breast cancer (42,281) and the number has drastically increased since then.1 Most affected by this epidemic are areas with historical manufacturing employment and areas with obesity-related health problems. The situation is so dramatic, that opioid is even a major reason for recent declines in life expectancy.
No revolutionary wonder drug
It all started so hopefully. In 1996, Purdue Pharma brought a new drug on the market. Its name: OxyContin. OxyContin should - in contrast to antecedent opioids - be released slowly into the body and thus ensure longer pain relief and decline the potential for addiction. It was portrayed as nothing less than a revolutionary wonder drug.
Unfortunately, this was not the case. In contrast, patients’ pain came back sooner and stronger than expected. Furthermore, people built up tolerances, which led them to consume more and higher doses.
The consequences are severe
In 2011, restrictions on the use of opioids begun to bind, and prescriptions started to fall. However, the damage was already done. People were addicted to OxyContin and consequently forced to turn to illegal opioids such as heroin or fentanyl. With regular consumption of these even harsher opioid variants, dying of an overdose is just a matter of time.
Figure 1 (left)
Drug and opioid deaths began to increase more heavily after the implementation of OxyContin in 1996 than in the previous years. When the use of the latter was restricted in 2011, people instead turned to replacements such as heroin or fentanyl, letting the number of deaths increase even more (Cutler and Glaeser 2021).
Figure 2 (right)
While the share of people having at least two painful conditions increased between 2001-2002 and 2009-2010 (bars, left scale), the share of people who have at least two opioid prescriptions rose by even more (lines, right scale). It can be concluded the lion’s share of the increase in opioid use came from the rising number of prescriptions (Cutler and Glaeser 2021).
How could it have come thus far?
First of all, the FDA (Food and Drug Administration) approved OxyContin, although no clinical trials could prove its above-mentioned safety or efficacy. Furthermore, the DEA (Drug Enforcement Agency) was similarly lax and approved production quota increases for opioids even when the epidemic was already obvious. A major reason for this state failure were the strong personal ties Perdue Pharma used to have to the regulator.
Unfortunately, states had moved away from monitoring prescriptions before the crisis started and the restrictions and requirements from private insurers were quite low too. Besides, the financial interest of pharmaceutical distributors and dispensers must have been greater than their legal obligation to watch for diversion of products. Lastly, individual physicians often imprudently prescribed the drug.
However, the most important issue was undoubtedly the behavior and greed of Purdue Pharma and its founding family, the Sacklers. With an aggressive advertising strategy and direct selling methods to doctors, Purdue Pharma managed to get OxyContin prescribed not only for cancer patents (for whom the drug was initially intended to be for), but also for people with chronic pain.2
TV tip: Dopesick
Dopesick is an eight-episode miniseries released in 2021 (on Hulu) dealing with the opioid epidemic in the USA. It is based on the book “Dopesick: Dealers, Doctors and the Drug Company that Addicted America” by Beth Macy and focuses in particular on individuals and families affected by OxyContin, from the introduction of the drug up to the legal case against Purdue Pharma.
Demand-side factors are of minor importance
The paper «When Innovation Goes Wrong: Technological Regress and the Opioid Epidemic» analyses the factors that have shaped this crisis to date.3 In a convincing way, the authors show that the rise of opioid use and deaths is only a small part due to demand, meaning that the rise of physical pain, depression, despair, and social isolation can only explain a fraction of the misery.
However, an increased supply is more likely to be the actual driver of the crisis: After the modest technological but strong marketing innovations in the legal sector, opioids in the illegal sector flooded the market.
Meanwhile, Purdue Pharma filed for bankruptcy and was sentenced by a Bankruptcy Court to pay 4.5 billion dollars. Because this settlement also included a provision that protected the Sackler family from civil liability, which is unusual, several objectors (including eight US federal states) filed a complaint. After a federal judge overturned the settlement, the Members of the Sackler family increased their offer to about 6 billion dollars. However, they insist on the extraordinary protection of their private wealth. The new agreement must still be approved by judge.
According to an analysis on which the objectors rely, the Sackler family had taken more than 10 billion dollars out of the company between 2008 and 2017. The funds from the settlement will be used to pay victims and finance campaigns to alleviate the crisis.4
 It is estimated that between April 2020 and April 2021 more than 100,000 Americans died of overdoses.
 More about the Sackler family, their methods, and how they refuse to take responsibility for the crisis is shown in the Last Week Tonight episode “Opioids III: The Sacklers” as well as the Financial Times article “Empire of Pain — the story of the Sacklers and OxyContin”.
 The paper has been published in fall 2021 in the Journal of Economic Perspectives. It is openly accessible under the following link.
 See the article “Sackler owners offer up to $6bn to settle Purdue Pharma bankruptcy” as well as “Judge overturns $4.5bn opioid-related settlement in Purdue Pharma bankruptcy” in the Financial Times.