Researchers really have no idea what causes heroin-induced leukoencephalopathy. They thought maybe it was something the heroin was contaminated with, but studies have (as of yet) failed to identify a neurotoxic contaminant or cut responsible for the brain damage after heroin vapor-inhalation.
This site says:
PATHOGENESIS
The mechanism of neurologic injury related to heroin inhalation is unknown. Since heroin leukoencephalopathy has not been observed in users who inject or snort heroin, it is possible that unknown toxins contained in the heroin pyrolysate (the product of chemical change caused by heating) are responsible for the condition [3]. However, the disease was not replicated in rats exposed to this compound [2]. Triethyl tin (TET), a component of inorganic tin, was also suspected since TET poisoning results in vacuolar white matter edema [3,5], but an etiologic role for TET is unlikely, since the TET content in aluminum foil is negligible [3].
Mitochondrial dysfunction may play a role in the development of heroin leukoencephalopathy, as suggested by mitochondrial changes on specimens from brain biopsy [2], by elevated lactate on magnetic resonance spectroscopy [3], and by the clinical improvement with antioxidant therapy that has been reported in a few patients [3].
I think it's going to be impossible to find out how prevalent heroin-enduced leukoencephalopathy really is, unfortunately. It is very likely to be under-recognized and under-reported. If someone is found dead with heroin in their system would their cause of death be presumed to be a heroin overdose? Could some people only have mild cases that didn't require hospitalization? And if someone didn't have any heroin detectable in their system at the time of being admitted to a hospital would the connection even be made with their heroin use if they themselves didn't admit to using heroin? (Just explaining why I probably can't come up with accurate info regarding how common this disease is or in what areas it currently happens).
I do know that at least 20 reported cases of heroin-induced leukoencephalopathy were identified in Vancouver, BC, Canada with onset dates between Dec 2001-Jul 2003, and at least 7 reported cases were identified in Victoria, BC, Canada between Sept 2005-Aug 2006. One person reported smoking heroin only once and developed mild symptoms, while all the other cases were hospitalized. 13 of the people died. There was a least one sample of the heroin someone had used which was tested and they were unable to identify any substances in it aside from heroin and common cutting agents. This outbreak in 2 closely related cities (Victoria generally gets it's heroin via Vancouver) is the "largest number of geographically and temporally defined reported cases in North America".
Apparently 17 people in BC developed heroin-induced leukoencephalopathy just in the first 6 months of 2003.
Heroin-induced leukoencephalopathy was first described in the Netherlands in 1982 when 47 patients with encephalopathy were found to have a common history of using heroin bought in the same neighbourhood.
I haven't been able to find much recent info on cases unfortunately. There are a few case reports published more recently but with no dates regarding onset.
Of course when you compare these numbers to the numbers of people who are known to die of heroin overdoses in the same areas it seems small, but at least we know of ways to reduce the likelihood of overdose, whereas with this disease it sounds like there is nothing you can do to protect yourself aside from not smoking heroin, and it's a pretty disturbing disease.
EDIT: Hadn't seen Chromophobia's post when I posted this, some of his links contain much of the same info I posted. I love how the BC journal article (2nd link) uses terms like "dial-a-dope", lol. I highly doubt those responsible for adulterating the heroin have detected an issue, even researchers couldn't figure out a cause and there have been cases spread out by decades across different continents. I do agree it seems likely to be
some sort of contaminant as the case reports have been clustered geographically (although it could also be a situation of doctors just making the connection more in areas where there have been publicized cases) and chronologically. It sure is mysterious whatever it is.