Drugmakers push back against lawmakers’ calls to tax opioids HOW STATES PROPOSE RAISING MONEY FROM OPIOID SALES
ST. PAUL, MINN. >> Facing a rising death toll from drug overdoses, state lawmakers across the country are testing a strategy to boost treatment for opioid addicts: Force drug manufacturers and their distributors to pay for it.
Bills introduced in at least 15 states would impose taxes or fees on prescription painkillers. Several of the measures have bipartisan support and would funnel millions of dollars toward treatment and prevention programs.
In Montana, state Sen. Roger Webb, a Republican, sees the approach as a way to hold drugmakers accountable for an overdose epidemic that in 2016 claimed 42,000 lives in the U.S., a record.
“You’re creating the problem,” he said. “You’re going to fix it.”
Opioids include prescription painkillers such as Vicodin and OxyContin as well as illegal drugs such as heroin and illicit versions of fentanyl. Public health experts said the crisis started because of overprescribing and aggressive marketing of the drugs that began in the 1990s. The death toll has continued to rise even as prescribing has started to drop.
A Pennsylvania opioid tax bill was introduced in 2015 and a federal version was introduced a year later, but most of the proposals arose during the past year. The majority of them have yet to get very far, with lawmakers facing intense pressure from the pharmaceutical industry to scuttle or soften the legislation.
Drugmakers and distributors argue that it would be wrong to tax prescription drugs, that the cost increases would eventually be absorbed by patients or taxpayers, and that there are other ways to pay for addiction treatment and prevention.
“We have been engaged with states to help move forward comprehensive solutions to this complex public health crisis and in many cases have seen successes,” Priscilla VanderVeer, a spokeswoman for Pharmaceutical Research and Manufacturers of America, said in a statement. “However, we do not believe levying a tax on prescribed medicines that meet legitimate medical needs is an appropriate funding mechanism for a state’s budget.”
Two drug companies that deployed lobbyists — Purdue Pharma and Pfizer — responded to questions with similar statements.
A spokesman for the Healthcare Distribution Alliance, which represents drug distributors, said a tax would mean that cancer patients and those in end-oflife
care might not be able to get the prescriptions they need.
The pharmaceutical industry has emphasized that the name-brand drug companies that make up its members already give rebates to states for drugs funded by Medicaid. Those rebates amount to billions of dollars nationwide that states could use to address opioid addiction, the trade group says.
State legislation to tax opioids comes as manufacturers and distributors are defending themselves in hundreds of lawsuits filed by state and local governments seeking damages for the toll the overdose epidemic has taken on communities.
David Humes, whose son died from a heroin overdose in 2012, has been pushing for an opioid tax in Delaware, which did not increase funding for addiction treatment last year as it struggles to balance its budget.
“When you think about the fact that each year more people are dying, if you leave the money the same, you’re not keeping up with this public health crisis,” he said.
Humes, a board member of the advocacy group AtTAck Addiction, supports legislation that would dedicate opioid tax revenue for addiction services.
The lead sponsor of an opioids tax bill, state Sen. Stephanie Hansen, said drug companies told her they already were contributing $500,000 to anti-addiction
WHAT WOULD BE TAXED: The bills propose taxing sales of prescription opioid painkillers, generally at the wholesale level. Some spell out that the wholesaler would be the entity required to pay the state. Other versions do not have as much detail. Most of the bills have not advanced far and could be amended.
HOW TO DO IT: Several of the proposals call for taxes based on the potency of the opioid. That tab could be 10 to 15 cents per pill for many opioids; more for some, less for others. Another approach used in Pennsylvania legislation would charge 10 percent of the purchase price of the first sale of a drug in the state. In the only one of the opioid taxes to be adopted so far, New York went with another method. It’s charging distributors and manufacturers a total of $100 million a year based on their market share of opioids.
HOW MUCH MONEY: This varies widely. Bill sponsors say the Delaware bill, using last year’s opioid sales data, would have brought in more than $9 million and that West Virginia’s would bring in $24 million. In most states, it would go into funds to pay for addiction treatment and prevention, and to recover other costs related to the addiction crisis, such as rising costs for child-welfare systems dealing with the growing numbers of kids whose parents are addicts. The Kentucky measure that failed in March would have been used to boost the general fund for the cash-strapped state.
THE CRITICISM: Drug industry groups are pushing back against the proposals. Among other arguments, they say the higher prices would be passed on to insurance customers or taxpayers despite measures in several of the bills intended to prevent that. They also say it’s bad policy to tax prescription drugs. The only statewide tax on them now is in Illinois, where the rate is 1 percent. Other groups such as hospice organizations have opposed the bills, saying they would hurt the organizations and their patients. Some legislation waives the tax for drugs used in hospice care.
STATES: Bills seeking to tax opioids have been introduced in Alaska, California, Delaware, Idaho, Iowa, Kentucky, Maine, Massachusetts, Minnesota, Montana, New Jersey, New York, Pennsylvania, Tennessee and West Virginia.