IT IS ESTIMATED THAT THERE ARE NOW APPROXIMATELY 500,000 HEROIN ADDICTS IN THE UNITED STATES, OF WHICH 290,000 ARE IN TREATMENT. TWO-THIRDS OF PERSONS IN FEDERALLY-FUNDED TREATMENT PROGRAMS ARE UNEMPLOYED. THE NATIONAL INSTITUTE ON DRUG ABUSE CURRENTLY FUNDS 102,000 DRUG ABUSE TREATMENT PROGRAMS SERVICING 161,000 PERSONS ANNUALLY; THEIR EXPENDITURES FOR 1978 EXCEEDED $250 MILLION. IN SPITE OF THE FEDERAL EFFORT IN TREATMENT, RECIDIVISM, DROPOUT RATES, AND UNEMPLOYMENT REMAIN UNSOLVED PROBLEMS. TESTIMONY IS PRESENTED BY SEVERAL PHYSICIANS; THE ADMINISTRATOR OF THE ALCOHOL, DRUG ABUSE, AND MENTAL HEALTH ADMINISTRATION OF THE DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE (DHEW) THE CHAIRPERSON FOR THE NATIONAL ASSOCIATION FOR CITY DRUG COORDINATION OF BOSTON, MASS., AND THE DEPUTY DIRECTOR, NATIONAL INSTITUTE ON DRUG ABUSE. IT IS EMPHASIZED THAT TREATMENT PROGRAMS FOR DRUG ABUSERS BE ENHANCED, THAT THE BASE OF KNOWLEDGE REGARDING SUCCESSFUL APPROACHES BE BROADENED, AND THAT THE TRADITIONAL HEALTH-CARE DELIVERY SYSTEM BE EXTENDED TO SERVICE DRUG ABUSERS. IT IS ANTICIPATED THAT DHEW WILL PLAY AN INCREASINGLY ACTIVE ROLE IN COORDINATING ITS PROGRAMS AND IN WORKING WITH OTHER INVOLVED FEDERAL AGENCIES. BIOMEDICAL RESEARCH CONTINUES TO BE AN IMPORTANT FOCUS. OF SPECIAL CONCERN IS DRUG ABUSE AMONG YOUTH AND MINORITIES. TABULAR DATA AND GRAPHS ARE PROVIDED. (LWM)