As Connecticut proposes opioid tax, distributors push back.

Connecticut is making plans to include a new tax on opioids in its state budget.  But this effort has been met with opposition from the pharmaceutical industry.  A national coalition of pharmaceutical distributors warned the tax ultimately would be paid by patients, many of whom need prescription-opioid medications to manage chronic pain.

“By adopting the opioid tax, the state of Connecticut would be increasing health care costs for thousands of patients who need these medications for a number of conditions and surgical procedures, including the treatment of cancer and end-of-life hospice care,” wrote John Gray, president and CEO of the Healthcare Distribution Alliance.

House Speaker Joe Aresimowicz, D-Berlin, predicted the tax would be included in the budget, but did not identify a specific rate.  The tax would be imposed at every level of the distribution process, including at the first point of sale in Connecticut, which typically means distributors selling to health care providers.

“The producers of opioids have made a lot of money in a very inappropriate way,” Aresimowicz said. “So, it’s our intention to make sure they will be paying it, not the consumers.”

The opioid tax was recommended by Comptroller Kevin P. Lembo and a few other of Connecticut legislators recently to complement a state-sponsored health insurance option for individuals and small businesses.  It was originally part of the “Connecticut Option” bill and is estimated to bring in $20 million by the second year.  Senator Matt Lesser, D-Middletown, said it will help 26,000 low-income parents obtain Medicaid coverage.

“It seemed that the least objectionable way was to ask companies associated with the opioid epidemic to chip in a very modest amount,” Lesser said.

New York was the first state to propose taxing the sale of opioids.  It passed its tax in 2018 as part of that state’s budget, but it was struck down by a federal judge before the plan could officially be rolled out.  The judge concluded that “the provision barring manufacturers and distributors from passing the tax onto consumers violates the dormant commerce clause.”

In April 2019, New York’s Governor Andrew Cuomo approved a budget that would allow the tax to be passed along to consumers.  However, Rep. William A. Petit Jr., a physician, said this is illogical.  “It’s going to raise the cost of care for people in the worst moment of their lives,” he said.

Petit predicted the tax will increase the cost of medication, and at $20 million will likely increase health insurance premiums for every everyone by $6 or $7.  “You can’t take $20 million out of the system and expect it not to have an impact,” he added.

Senator Saud Anwar, D-South Windsor, also a doctor, said, “When somebody is getting anesthesia, when someone is having surgery, when somebody is actually going to get care in the hospital or an outpatient procedure, they will be paying a lot more than they have.  Opioids have a legitimate use and there is a legitimate risk of abuse, but in order to try and reduce that abuse we’re going to have an impact on people with a legitimate use.”

Sources:

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