New York Tries To Tax Prescription Opioids Again

By Kelly Burch 04/03/19

Some people argue that the tax could push people to use illegal alternatives if prescription opioids become more expensive.

New York doctor holding a bottle of prescription opioids

New York state has passed a measure to tax opioid prescriptions in an attempt to fund addiction-recovery efforts, despite the fact that a court ruled a similar measure unconstitutional last year. 

According to WXXI, the state said that the measure, part of the state budget, is intended to raise additional funds to pay for the response to the opioid crisis by taxing manufacturers.

However, some people argue that the tax could have unintended effects, pushing people to use illegal substances if prescription opioids become more expensive. 

“While the language of the proposed law attempts to place the burden of the tax on drug manufacturers, in practice market forces determine how the burden of the tax is shared between producers and consumers,” Lewis Davis, professor of economics at Union College, wrote in a report.

The report was prepared last year and paid for by a pharmaceutical lobbying group, but echoed concerns shared by other organizations including the American Cancer Society Action Network.

Davis pointed out that the tax policy could have a number of negative side effects. 

“Most of the tax will be paid by non-consuming NY residents in the form of higher insurance premiums and higher taxes to cover public health programs. Second, to the extent that the cost of the tax is passed on to consumers, it will have a high cost to society in terms of reduced access to medically appropriate use of opioids,” he wrote. “Third, by increasing the cost of prescription opioids, the proposed tax will encourage NY residents suffering from opioid dependence to switch to cheaper illegal opioids, including heroin and fentanyl, with increased rates of accidental overdose.”

He continued, “Because it fails to target opioid abuse, the proposed tax is poorly designed policy for addressing the opioid crisis.”

Last year, a federal court struck down the tax because it would violate interstate commerce laws by treating New York residents differently from consumers in other states. The 2019 version of the bill works around that and should stand up in court, according to the state. 

Freeman Klopott, a spokesperson for the state budget office, said that New Yorkers who use prescription opioids won’t be affected by the measure, since most of the cost for the tax will be shouldered by insurance companies and drug manufacturers. 

“We expect no significant change in the availability of these pharmaceuticals or any diversion to illicit alternatives,” said Klopott.

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Kelly Burch writes about addiction and mental health issues, particularly as they affect families. Follow her on TwitterFacebook, and LinkedIn.