Authors: Glenn Farley & Kamryn Brunner


CSI estimates that the costs of the epidemic in Arizona reached an all-time high last year: $58 billion. This staggering figure includes not only hospital, law enforcement, and other public service costs of dealing with this crisis, but also loss of quality of life and productivity amongst those suffering with addiction.

The costs of this crisis have continued rising due to ongoing medical and other price inflation, law enforcement strains, the severity of fentanyl relative to other opioids, and the continued crisis on Arizona’s southern border enabling the primary pathway for fentanyl into America.

While the roots of the opioid crisis go back to the mid-90’s, its severity in terms of both human and social costs didn’t really take off until after 2015. This surge is attributable to the particular severity of fentanyl abuse, its low cost, and its relatively high availability. An unfortunate fact of three independent but concurrent policy changes whose roots can be traced to the late-2010’s – the overprescribing and subsequent crackdown on prescription drugs, the relaxation of criminal enforcement of America’s drug laws, and the collapse in security along the border with Mexico – has been to enable both supply and demand for fentanyl and other illegal opioids. This experiment in hindsight was clearly a failure.

Over the last decade, fatal opioid overdoses in Arizona have more than doubled. Seizures of fentanyl and other opioids inside Arizona remain at record levels. The DEA has identified the greater Phoenix area – whose violent crime is up about 50% over the past decade – as a central distribution hub for fentanyl into the greater United States.

This update to CSI’s  2022 study of what led to this crisis, and how it has continued evolving over the past two years, continues to be about not repeating the mistakes of the past and better-informing policy going forward.

Key Findings

  • CSI estimates that the cost of the fentanyl crisis to Arizona’s economy today is $58 billion – for context, the annual GDP of the state of Arizona is $521 billion. In 2017, the CDC estimated the national opioid epidemic cost nearly $1 trillion – or $22 billion in Arizona alone. But since then, the problem has only gotten worse.
  • While opioid-related fatal overdoses appear to have peaked, they remain near all-time highs; declines have been modest and it is premature to assume success in dealing with this crisis. In fact, despite opioid-related deaths in Arizona falling last year, CSI estimates the cost of this epidemic reached a new high.
  • Total seizures of fentanyl in the United States by the DEA have increased from approximately 6,800 pounds in 2019[i] to more than 29,200 pounds today[ii] – a 320% increase. Given that as little as 2 mg of pure fentanyl can be fatal, DEA seizures in Arizona alone last year were enough to kill every Arizonan 14 times over. Because it is a border state, Arizona is central to the current crisis.
  • In 2015, Arizona’s Department of Health Services reported 41,400 opioid-related encounters by Arizona hospitals, resulting in $305 million in encounter costs. By 2019, though, encounters had risen to 56,600 (+37%) but encounter costs had increased a staggering 120% (to $676 million). 

Fentanyl Is Deadlier Than Other Drugs

Fentanyl is much more dangerous than other drugs – even including peer opioids. According to the CDC, fentanyl is up to 50 times stronger than heroin and 100 times stronger than morphine.[iii] It can be fatal at smaller doses, and its illicit uses in counterfeit prescription pills puts users at high risk of accidental overdose.

Across the U.S, there are 150 deaths every day from overdoses related to synthetic opioids like fentanyl.[iv] In Arizona, as recently as 2017 fentanyl was involved in just 4% of reported non-fatal opioid overdose events; prescription drugs were involved in 92% of events.[v] Today, fentanyl is involved in a majority of overdose events (57%), while prescription drugs are found in only 36% of cases. Over the same period, the number of fatal opioid-related overdoses in Arizona more than doubled.

In 2023 alone – and assuming both that each pill contains an average of 1 mg of fentanyl and that a fatal dose is at least 2 mg of a fentanyl – the DEA seized enough fentanyl in Arizona to kill every Arizonan 14 times over.

The Economic Costs of the Arizona Opioid Epidemic

Figure 1

In its 2017 report, State-Level Economic Costs of Opioid Use Disorder and Fatal Opioid Overdose, the CDC estimated the total economic cost of the opioid epidemic in the United States at the time at $1 trillion. Arizona’s share of those costs was nearly $22 billion.

Since then, by all accounts, the incidence of opioid use disorder in Arizona has only increased, and associated healthcare and other social and economic costs have also risen. Critically, though, it is likely that the shift since 2017 from prescription opioid abuse to consumption of street fentanyl and counterfeit prescription drugs often laced with fentanyl has increased the severity of individual cases leading to higher overall economic costs.

In addition to the CDC model of economic costs associated with use-disorder and fatal overdose, Arizona’s Department of Health Services (DHS) has for years reported hospital encounter and facility costs associated with those experiencing opioid overdose. In 2019, for example, DHS reported over 56,600 hospital encounters at a total system cost of $676 million – or approximately $12,000 per encounter.

Finally, border states have begun to experiment with enforcement of border security – a role traditionally filled by federal authorities. For example, Texas has allocated more than $5 billion towards securing its border with Mexico, including with physical barriers.[viii] While investment in Arizona appears to have peaked in 2022 at $560 million (and since fallen to about $30 million annually), and while this remains a relatively small share of total costs to the state, CSI continues to track it here due to its novelty and relevance to the larger issue. Note also that this year Arizona voters will consider legislation that would expand the role of state and local law enforcement in policing border-related activities;[ix] if passed this may increase total border-security costs borne by Arizona taxpayers as state policymakers continue trying to fill in for the gaps created by reduced federal enforcement since 2020.

Considering these figures through 2023 and based on state-reported changes in the rate of opioid use and overdose, inflation, and other cost changes, CSI estimates that the cost of the opioid epidemic in Arizona reached an all-time high last year – a staggering $58 billion. This is more than double the $22.5 billion estimated by the CDC in 2017 when then-Gov. Doug Ducey declared the opioid epidemic a public health emergency. The surge appears almost entirely attributable to the rise in fentanyl abuse since then, the source of which appears to be Arizona’s porous southern border.

America’s Prescription Drug Crisis

While opioids – including heroin, morphine, and other compounds chemically isolated from the poppy plant – have been available for legitimate and illicit use in the United States since at least the 19th century, the development of synthetic and semi-synthetic opioids accelerated in the early 1900’s (beginning with the development of oxycodone in 1916).[x] In 1959, fentanyl was synthesized in pharmaceutical laboratories and quickly became popular for both its increased potency and low cost relative to other opioids.[xi]

Following the rise of illicit use and abuse of opioids (including heroin but also synthetic opioids and pharmaceutical drugs) the United States enacted a series of reforms intended to restrict their availability throughout the 1970’s and 1980’s, including with enactment of the Controlled Substances Act of 1970 – which standardized the categorization and regulation of drugs based on the balanced consideration of both harmfulness and potential medical use.  Fentanyl and other potent opioids are classified under Schedule II – drugs with an accepted medical use but high potential for abuse – and their prescription and distribution has been highly regulated.

By the 1990’s, attitudes had begun to shift. There was increasing belief in the medical community that pain was a distinct and undertreated condition,[xii] and that the development of addiction among otherwise healthy and drug-free patients from the temporary use of prescription opioids to manage pain was rare.[xiii] This led to increased availability of prescription opioids in the American healthcare system.

In 1991, there were approximately 76 million prescriptions for opioids in the United States. By 1999, that had increased to 116 million (+53%)

Unintended Consequences & The Fentanyl Crisis

Figure 2

In response to the perceived abuse of the nation’s prescription painkiller system by both providers and patients[xv], a national crackdown at both the state and federal levels by a variety of regulatory agencies began in the mid-2010’s. In 2016, the U.S. Centers for Disease Control & Prevention (CDC) issued new guidelines on when and how to appropriately prescribe opioid painkillers. Massachusetts became the first state to restrict initial opioid prescription painkiller supplies[xvi]; today 36 U.S. states have policies limiting the availability of prescription opioids[xvii].

This led to pressure at all levels of the American healthcare system to reduce opioid prescriptions. Insurance companies, hospital systems, licensing boards, and non-profit professional associations all adopted new rules and structures around the dispensing of opioids by their providers. The pressure worked: a late-2016 survey of Sermo member physicians found over half had reduced opioid prescriptions, and 1 in 10 had stopped prescribing opioids altogether.[xviii] Today, the number of opioid prescriptions in the United States has fallen to just 132 million – about half its peak level.

Unfortunately, this shift in policy left many opioid-dependents without a source of legal painkillers.[xix] Because of the rapidity of the national change, patients in chronic-pain or with opioid dependency were desperate for alternatives. Coincidentally, China beginning in the 1990’s was developing the world’s largest pharmaceutical and chemical industries; according to the U.S. Department of State, 70% of the worlds illicit fentanyl production in 2021 was occurring in China.[xx] This became a cheap and available illegal supply for American drug consumers following the loss of access to legal or semi-legal prescription painkillers, and beginning in the late-2010’s opioid-related overdose deaths were surging despite (or perhaps more because of) the collapse in opioid prescriptions. Though cheap and available, illicit opioids – often principally or laced-with fentanyl – have proved far more dangerous than their prescription-market counterparts.

In the 1980’s, overdose deaths related to illicit fentanyl use in the United States occurred only “sporadically”.[xxi] According to the CDC, in 2013 when opioid prescriptions peaked there were only about 1.0 deaths per 100,000 people in the United States from synthetic opioid use. By 2022, the rate had surged to 22.7 deaths per 100,000 people.[xxii]

The Southern Border’s Role in America’s Drug Problem

In 2018-2019, the U.S. Drug Enforcement Agency (DEA), Customs & Border Patrol (CBP), and other federal law-enforcement agencies began putting particular emphasis on combatting the illicit flow of grey- and black-market fentanyl into the United States from foreign countries (particularly China) via international trade. Also in 2019, China announced sweeping and novel domestic restrictions on the production and distribution of all types of fentanyl.[xxiii] As a result, seizures of synthetic opioids (including fentanyl) in international U.S. mail fell from over 150 pounds in 2018 to an estimated just 10.5 pounds by 2020.[xxiv] [xxv]

Figure 3 – Authentic (top) and counterfeit (bottom) oxycodone tablets. The counterfeit pills contain fentanyl.

However, while data seems to support the thesis that direct shipments of fentanyl and equivalents from China to the United States appear to have declined, other evidence suggests that the flow of fentanyl has shifted rather than been stymied. Total seizures of the drug in the United States by the DEA have increased from approximately 6,800 pounds in 2019[xxvi] to more than 29,200 pounds today[xxvii] – a 320% increase.

As documented extensively in CSI’s original 2022 report, stakeholders and experts report that the primary source of illicit fentanyl in the United States today is smuggling of the finished drug across the southern border with Mexico, and that production of it is enabled with chemical and equipment sourced by Mexican drug manufacturers from the Chinese pharmaceutical industry.[xxviii] In its National Drug Threat Assessment 2024, the DEA again reports that: “Fentanyl manufactured by the Mexican cartels is the main driver behind the ongoing epidemic of drug poisoning deaths in the United States… China-based chemical suppliers are the main source of the chemicals used in the production of illicit fentanyl.”[xxix]

Since 2020, policy priorities along the southern border have shifted dramatically. Fewer resources are devoted to the prevention of unlawful crossings; increasing resources are dedicated to processing and managing the flow of migrants. For FY 2023, the President’s Executive Budget Proposal reduced funding for Immigrations and Customs Enforcement by 8% while proposing an 800% increase in funding for “processing and care” – legal and material assistance for illegal immigrants.[xxx] In April 2022, OMB Director Shalanda Young testified that $1.9 billion appropriated for the construction of physical barriers along the southern border was reallocated to “environmental restoration” and “community consultation”.[xxxi] When border barrier construction was halted suddenly in 2020, nine large gaps in the Yuma area were left opened for over three years; some were temporarily blocked by temporary barriers erected by then-Gov. Ducey, only to be reopened after the Federal government forced their removal. Reports from the area confirm that physical barriers are effective in dissuading unauthorized border crossings; activity surged when the barriers were halted[xxxii], and has collapsed in affected sectors following their completion.[xxxiii] [xxxiv]

Figure 4

In 2018, there were 257,000 CBP encounters with undocumented migrants across the entire United States; by 2023 the number had surged to 3.2 million.[xxxv] Processing the flow requires the movement of resources away from legal ports of entry. During 2023, CBP entirely closed four ports of entry on the southern border to allocate additional resources to migrant processing.[xxxvi] The CBP has reduced the number of highway checkpoints inside the United States to redirect the manpower towards handling the migrant influx – a decision which “will severely hamper authorities’ anti-trafficking efforts”, according to CBP sources.[xxxvii] As a result of these resource shifts, the ability of CBP to prevent the smuggling of drugs like fentanyl into the United States is likely compromised; as a result, CBP seizures of drugs (excluding marijuana) has collapsed since 2020 as the migrant crisis has accelerated. It is unlikely fewer drugs being smuggled can explain the decline given the surge in the abuse of fentanyl and the shift in demand for opioids to Mexican smuggling since 2016.

The Rising Toll of Fentanyl in Arizona

Between 2020 and 2022, seizures of Fentanyl by the Arizona Department of Public Safety (DPS) increased 665% from 239 to an estimated 1,828 pounds, according to data previously shared by the Department with CSI. Over a third of all seizures were occurring in the states border counties (for reference, less than 20% of the state’s population lives in these areas). In 2021, nearly half of all seizures of fentanyl pills in the United States by the DEA occurred in the Phoenix area.[xxxviii]

Figure 5

The state lacks the resources to keep pace with the flow of drugs and other contraband across the southern border. The budget for CBP is approximately $20 billion[xxxix]; the budget for DPS is approximately $400 million for all statewide operations[xl]. Of that amount, only about $30 million is earmarked specifically for border-related duties. Arizona’s state and local law enforcement in its border areas have estimated the potential costs of enforcing border security – a traditionally federal responsibility – at hundreds of millions annually.[xli]

In 2017, then-Gov. Ducey declared opioid misuse a statewide public health emergency. At the time there were 950 fatal opioid overdoses occurring annually. Today, the number is nearly 2,000 fatal overdoses every year. Crime, too, is on the rise – in Arizona and nationally. Since 2014 the violent crime rate in Phoenix has risen 38%.[xlii] According to estimates, 25%-50% of all violent crimes are drug-related.[xliii] [xliv] [xlv] Homelessness, too, is on the rise – and despite massive investment, resources are mostly targeted towards housing and shelter, even as homelessness is highly correlated with drug abuse and dependence.[xlvi] Police resources in Arizona have failed to keep pace with the rising demands created by the border, drug, and homelessness crises – since 2010, the ratio of sworn law enforcement employees per capita in Phoenix have fallen from 2.2 officers per 1,000 residents to just 1.7 today; for Arizona as a whole the ratio is also 1.7, down from 1.9 in 2013.[xlvii] For reference, according to the Department of Justice the national average ratio is 2.5.[xlviii]

Figure 6

The Bottom Line

Though opioid-related fatal overdoses in Arizona appear to have peaked in late-2021 and have leveled off since, the cost of the epidemic in Arizona  has continued rising. Inflation, widespread availability of the drug at very-low street prices, and continued high incidence of opioid use disorder among Arizonans combined to make 2023 an all-time-high cost year for the state. The battle with fentanyl – in Arizona and nationally – is far from over.

[1] In more recent periods, DHS has reported new (higher) encounter cost figures than historically due to apparent methodological changes (reflecting billed charges rather than adjusted or reimbursed costs); to maintain consistency across the historical data series our report continues using the 2019 DHS cost figures, estimated for future years.

[i]2020 National Drug Threat Assessment,” Drug Enforcement Administration, March 2021.

[ii]National Drug Threat Assessment 2024,” Drug Enforcement Administration, 2024.

[iii]Fentanyl Facts,” Center for Disease Control April 2, 2024.

[iv]Provisional Drug Overdose Death Counts,” Center for Disease Control, February 15, 2023.

[v]Opioid Prevention,” Arizona Department of Health Services, 2024.

[vi] Sood, Sarika, “Year in Review: DEA Phoenix Fentanyl Seizures,” NBC News 4 Tucson, January 18, 2024.

[vii]2019 Opioid Deaths and Hospitalizations,” Arizona Department of Health Services, 2019.

[viii]Governor Abbott Signs Sweeping Package of Border Security Legislation,” Office of the Texas Governor, June 8, 2023.

[ix] Stern, Ray, “Arizona Voters to Decide Fate of Texas-Style Immigration Bill After GOP Lawmakers’ Approval,” AZCentral, June 7, 2024.

[x] Shafi, Abu, Berry, Alex, Sumnall, Harry, Wood, David, Tracy, Derek, “Synthetic Opioids: a Review and Clinical Update,” Ther Adv Psychopharmacol, December 20, 2022.

[xi] Pardo, Bryce, Taylor, Jirka, Caulkins, Jonathan, Kilmer, Beau, Reuter, Peter, Stein, Bradley, “Understanding America’s Surge in Fentanyl and Other Synthetic Opioids,” RAND, October 7, 2019.

[xii] Moghe, Sonia, “Opioid History: From ‘Wonder Drug’ to Abuse Epidemic,” CNN, October 14, 2016.

[xiii] Porter, Jan, Jick, Herschel, “Addiction Rare in Patients Treated With Narcotics,” Boston Collaborative Drug Surveillance Program, Boston University Medical Center, Accessed June 7, 2024.

[xiv] Volkow, Nora, “America’s Addiction to Opioids: Heroin and Prescription Drug Abuse,” Senate Caucus on International Narcotics Control, May 14, 2014.

[xv]Prescription Painkiller Abuse: Attitudes Among Adults in Massachusetts and the United States,” the Boston Globe, Harvard T.H. Chan School of Public Health, May 2015.

[xvi]Opioid Prescription Limits and Policies By State,” Ballotpedia, April 4, 2022.

[xvii] Farley, Glenn, “Fentanyl, Crime, and Arizona’s Southern Border,” Common Sense Institute Arizona, August 2022.

[xviii]U.S. Physicians Discuss Curtailing Opioid Prescriptions,” Sermo, January 9, 2017.

[xix] McCoy, Terrence, “’Unintended Consequences’ Inside the Fallout of America’s Crackdown on Opioids,” Washington Post, May 31, 2018.

[xx] Wang, Chao, Lassi, Nicholas, Zhang, Xiaohan, Sharma, Vinay, “The Evolving Regulatory Landscape for Fentanyl: China, India, and Global Drug Governance,” Int J Environ Res Public Health, February 12, 2022.

[xxi] Han, Ying, Yan, Wei, Zheng, Yongbo, Khan, Muhammad, Yuan, Kai, Lu, Lin, “The Rising Crisis of Illicit Fentanyl uns, Overdose, and Potential Therapeutic Strategies,” Transi Psychiatry, November 11, 2019.

[xxii] Spencer, Merianne, Garnett, Matthew, Minio, Arialdi, “Drug Overdose Deaths in the United States, 2002-2022,” U.S. Center for Disease Control, March 2024.

[xxiii] Myers, Steven lee, “China Bans All Types of Fentanyl, Fulfilling Pledge to Trump,” The New York Times, April 1, 2019.

[xxiv]Oversight of Federal Efforts to Combat the Spread of Illicit Fentanyl,” U.S. House Energy and Commerce Committee, 2019

[xxv] Katz, Eric, “Report: DHS, USPS, Failing in Their Requirements to Screen for Opioids in the Mail,” Government Executive, October 3, 2023.

[xxvi]2020 National Drug Threat Assessment,” Drug Enforcement Administration, March 2021.

[xxvii]National Drug Threat Assessment 2024,” Drug Enforcement Administration, 2024.

[xxviii] Farley, Glenn, “Fentanyl, Crime, and Arizona’s Southern Border,” Common Sense Institute Arizona, August 2022.

[xxix]National Drug Threat Assessment 2024,” Drug Enforcement Administration, 2024.

[xxx]Budget of the U.S. Government FY 2024,” U.S. Office of Management and Budget, March 2023.

[xxxi]OMB Dir. Shalanda Young Testifies on 2023 Budget Request,” CSPAN, April 2, 2022.

[xxxii]US to Fill Border Wall Gaps at Open Area Near Yuma, Arizona,” KTAR News, July 28, 2022.

[xxxiii] Dana, Joe, “It’s been a Year Since Border Restrictions Were Eased. Here’s What You Need to Know,” KPNX-TV Phoenix, May 2024.

[xxxiv] Rangel, Alexandra, “Yuma Feeling Impacts of migrant Surge at Border,” Arizona’s Family, December 14, 2023.

[xxxv]Nationwide Encounters,” U.S. Customs and Border Patrol, May 15, 2024.

[xxxvi] Gutierrez, Gabe, Ainsley, Julia, Lebowitz, Megan,”Biden Administration to Reopen Four Ports of Entry at Southern Border,” NBS News, January 2, 2024.

[xxxvii] Shaw, Adam, Hasson, Peter, “CBP Shuts Down Highway Checkpoints as Overwhelmed Agency Struggles to handle Border Surge,” Fox News, March 9, 2021.

[xxxviii] Miller, Joshua Rhett, ”Authorities Seize Record 1.7 Million Fentanyl Pills in Arizona,” The New York Post, December 17, 2021.

[xxxix]FY 2025 U.S. Customs and Border Patrol Budget Overview,” Department of Homeland Security, 2024.

[xl]Arizona Department of Public Safety Appropriations Report FY 2023,” Joint Legislative Budget Committee, 2022.

[xli] Stern, Ray, “Arizona Republicans Want Voter-Backed Border Crackdown. Law Enforcement Say It’s Complicated,” AZCentral, June , 2024.

[xlii]Crime Statistics and Maps,” City of Phoenix, Accessed June 7, 2024.

[xliii] Goldstein, Paul, “The Drugs/Violence Nexus: a Tripartite Conceptual Framework,” APA Psychnet, 1985

[xliv] Bronson, Jennifer, Stroop, Jessica, Zimmer, Stephanie, Berzofsky, Marcus, “Drug Use, Dependence, and Abuse Among State Prisoners and Jail Inmates, 2007-2009,” U.S. Department of Justice, August 10, 2020.

[xlv] Murphy, Edmund, “Alcohol, Drugs, and Crime,” Recovered, June 7, 2024.

[xlvi] Farley, Glenn, Milne, Zachary, “Homelessness Spending Tops $1 Billion in Arizona,” Common Sense Institute Arizona, February 27, 2024.

[xlvii]Crime Data Explorer,” Federal Bureau of Investigation, Accessed June 7, 2024.

[xlviii]5 Myths About Police Metrics,” ICMA, October 2, 2017.