I hate to say it, but you're friend is right. I would not send him money, but maybe a care package with food, blankets, winter clothing. Tell him you love him, but most importantly, take care of yourself.
I've had numerous junkie friends. There is no reasoning with them. If he wants to use he will use. Even if he doesn't want to use he will likely use unless he gets help and takes it seriously. He will make his choices until he either cleans out or dies. I've lost friends who overdosed, and I know people who got clean. That is the honest and harsh truth.
Breathe. It is what it is. Talk to a counselor for yourself, for your anxiety, and for your panic attacks. You feel helpless and it is out of your hands.