April 17, 2019
To: Members of the Delaware House of Representatives
From: Americans for Tax Reform
Re: ATR Opposes Senate Bill 34, Opioid Tax
On behalf of Americans for Tax Reform (ATR) and our supporters across Delaware, I urge you to oppose SB 34, which would create a direct tax on opioid medication and a Prescription Opioid Impact Fund.
The opioid crisis is a tragic and difficult public health situation that understandably is drawing attention from lawmakers in Delaware. However, the crisis cannot be taxed away, history has proven that punitive taxes do not curb addiction or abuse.
Turning to taxes will drive up costs for patients in need of pain medication, who are legitimately prescribed the medication under the supervision of a doctor. Worse, a tax could make the opioid crisis worse, even as the state spends money attempting to make the situation better.
A report by economist Alex Brill, and Women In Government, shows the damage a tax would cause: “the tax would do little to discourage inappropriate use, could have the unintended consequence of promoting illicit opioids for some, and would raise the cost of health care generally.”
The proposed fee is a tax because it raises revenue. These costs must be passed on to consumers. A federal court ruled language in New York’s opioid stewardship law barring costs from being passed on to consumers was unconstitutional.
Multiple studies show, it is not just those who are prescribed pain medicine who will pay, the costs from the tax and compliance will also be passed on to everyone in the state through higher insurance premiums. In fact, people without health insurance feel these costs as well, since they have no way to deflect higher costs if they need to buy medication.
Also, hospitals would see higher costs, and taxpayers too, as public hospitals face added costs and the state pays more for Medicaid. The state is essentially taxing itself.
Most tragically, a tax on legitimate opioid medicine ironically makes illegal synthetic drugs more attractive to people suffering from addiction. Deaths from black market fentanyl, largely from China, and Mexican cartels, spiked to 5,000 in 2014 and rocketed to over 26,000 in 2017, according to Bloomberg News. It is illicit fentanyl that is the greatest risk from the opioid crisis now, as new CDC data show.
ATR strongly urges you to oppose a tax on opioid pain medication. Taxing people who need medicine would only add to the tragedy. Instead, community-based solutions, and a focus on illicit fentanyl, are better options that have shown promise in addressing the crisis.
President, Americans for Tax Reform