July 15, 2022

The United States is experiencing not one but two epidemics: The opioid crisis persists despite the Covid-19 pandemic. The Centers for Disease Control and Prevention (CDC) just announced that the number of opioid-related deaths increased by 30 percent to 93,000 in 2020, primarily due to fentanyl, a potent synthetic opioid trafficked from Mexico and China. Urgent federal action is required to assist Americans in combating substance abuse.
The new bipartisan Senate bill, The Life Budgeting for Opioid Addiction Treatment (LifeBOAT) Act, imposes a sin tax that robs pain patient Peter in order to treat addiction patient Paul.
The bill, introduced by Senator Joe Manchin (D-West Virginia) with ten co-sponsors including Senators Mitt Romney (R-Utah), Elizabeth Warren (D-Mass.), and Amy Klobuchar (D-Minn.), would impose a one-cent-per-milligram stewardship fee on the sale of opioids. The funds would be designated for drug treatment.
New York State attempted a sin tax on opioids, but the results were disappointing. In 2019, the government imposed taxes and fees on opioid manufacturers and pharmaceutical distributors who distribute opioids to pharmacies and hospitals. According to Kaiser Health News, dozens of manufacturers and wholesalers have ceased selling opioids in New York, including manufacturers Epic Pharma and Independent Pharmacy Cooperative. The pharmaceutical companies AvKARE and Lupin no longer ship to New York.
Incapable of recovering their increased expenses from insurers, some pharmacies increased prices, while others discontinued carrying the medication. Patients with chronic pain who relied on these medications had difficulty filling their prescriptions.
A tax of one cent per milligram may not seem excessive, but it will cost many patients hundreds or even thousands of dollars annually. According to IQVIA data, approximately one-third of people receiving opioids in the United States take a daily dose of 90 mg or more. Considering that 5.4% of all adults take opioids for chronic pain, millions of people will pay a surcharge for their care.
These fees have proven to be significantly more effective at reducing access to pain medications than at increasing drug treatment revenue. In 2020, New York’s expected $100 million fell short by seventy percent. A similar tax imposed by Delaware in 2019 generated $1 million in the first year, a modest beginning to the $8 million anticipated by 2022.
A sin tax on opioids is distinct from, say, a sin tax on sugary beverages to subsidize the cost of insulin for diabetics. Percocet, Vicodin, and morphine are considered medical products; ginger ale is not.
Taxing opioids would exacerbate the obstacles that legitimate medical users must overcome to obtain pain relief. As the CDC itself has acknowledged, the 2016 CDC guidelines were widely misconstrued by physicians as a federal mandate to reduce or eliminate opioid medication for patients. According to a survey, 71 percent of patients with chronic pain were receiving a lower dose or were discontinued entirely. Eight out of ten respondents reported worsening pain and quality of life.
Human Rights Watch has referred to the restrictions imposed on pain patients as a humanitarian crisis. The American Medical Association has also expressed concern regarding the dangers that opioid-dependent patients face.
Taxes on opioids could even undermine the bill’s objective of combating addiction by driving users to the cheaper black market. In a 2021 online survey of nearly 4,000 pain patients, nine percent reported illegally seeking opioids when they were unable to obtain their medication through standard medical channels, thereby risking addiction.
No one can dispute that Purdue Pharma’s aggressive marketing of OxyContin caused significant harm to the nation. Nor the harm caused when providers routinely prescribe a month’s worth of painkillers for a temporary condition. However, excessive prescribing decreased 60% between 2011 and 2020. This did not prevent the overdose death rate from doubling during the same time period, with illegally produced fentanyl being the primary driver. Politicians appear to have confused the corporate misconduct of Big Pharma with the problem of pain, which affects 50 million Americans and renders nearly 20 million disabled.
Some patients who are prescribed opioids may benefit from alternative methods of pain management; however, few alternatives are widely accessible and poorly covered by insurers. Doctors treat patients with the instruments they possess, not with those they wish they had.
Urgently needed is drug treatment for opioid addiction, but Congress can and should fund it from other revenue sources. The House passed an appropriations bill for 2022 on July 29 (awaiting Senate action) that would increase funding for the Substance Abuse Prevention, Treatment, and Recovery Block Grant by more than 50 percent and increase funding for other treatment programs. This is a much better strategy. Those battling addiction require our assistance, but so do those suffering from pain. The lifeboat can accommodate both passengers.

Conclusion

Why a sin tax on opioids is not like a sin tax on sugary drinks.

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