New Mexico Congresswoman Reintroduces Opioid Tax

By Pat Anson, Editor

A New Mexico congresswoman has reintroduced a bill that would require pharmaceutical companies to pay a tax on all opioid pain medication they make or import. The money raised would be earmarked for addiction treatment, prevention and research.

Democratic Rep. Michelle Lujan Grisham first introduced the Heroin and Opioid Abuse Prevention and Treatment Act last December. The bill went nowhere, but was quietly reintroduced by Lujan Grisham last month. It’s been referred to the House Committee on Ways and Means.

The legislation, which is very similar to a bill introduced last year by West Virginia Sen. Joe Manchin (D), would raise an estimated $2 billion annually by levying a one cent excise tax on every milligram of opioid pain medication. Excise taxes are not paid directly by consumers, but are levied on producers or merchants, who often pass the tax on to customers by including it in a product’s price.

Sen. Manchin’s bill – dubbed the LifeBOAT Act – would have placed the opioid tax directly on consumers. It was co-sponsored by several Democratic senators and endorsed by Democratic presidential nominee Hillary Clinton, but was not supported by any Republicans and died in the GOP controlled Senate.   

REP. MICHELLE LUJAN GRISHAM

Rep. Lujan Grisham says her legislation would create a “permanent source of funding” to treat addicts, prevent opioid addiction, and develop new pain management techniques. It is co-sponsored by Reps. David Cicilline (D-RI), Katherine Clark (D-MA), Raul Grijalva (D-AZ), and Collin Peterson (D-MN).

“The opioid epidemic has killed too many people, ripped too many families apart, and destroyed too many communities,” Rep. Lujan Grisham said in a press release when her bill was first introduced last year. “Our law enforcement agencies and health care providers are already overburdened and stretched to their limits. People are dying because they do not have the help they need. My bill will help fund the programs necessary to fight this epidemic.” 

In 2015, New Mexico had the eighth highest opioid death rate in the country – a rate that includes overdoses from illegal opioids such as heroin and illicit fentanyl, as well as prescription opioids. The state was recently awarded $9.5 million in federal funding to fight opioid and heroin abuse.

Rep. Lujan Grisham is a lawyer who served as New Mexico’s Secretary of Health under former Gov. Bill Richardson.  She was first elected to Congress in 2012 and was easily re-elected last year by a 2 to 1 margin. Lujan Grisham has announced plans to run for governor in 2018.

EpiPen Price Scandal Overshadows Opioid Tax

By Pat Anson, Editor

The high cost of prescription drugs has been a hot topic this year for many Americans struggling to pay the soaring cost of healthcare. But a scandal over the price of a lifesaving medication provides a lesson on how tangled money, family and politics can get -– and how low the price of opioid painkillers ranks on the totem pole of public outrage.

The scandal involves the CEO of Mylan Pharmaceuticals -- who happens to be the daughter of a U.S. senator – whose financial compensation has ballooned right alongside the inflated price of the EpiPen, a drug injector that reverses allergic reactions to things like peanuts and bee stings.

According to NBC News, Mylan CEO Heather Bresch took home nearly $19 million in salary, stock and other compensation last year, amounting to almost a 700% raise over eight years.

During the same time period, Mylan jacked up the price of the EpiPen by over 400%. The pocket sized injector that sold for $56 in 2007 now costs $317 wholesale.

sen. joe manchin

Bresch is the daughter of West Virginia Senator Joe Manchin (D), perhaps the biggest critic of opioid prescribing in Congress, who has alleged that pharmaceutical companies that make opioids have too cozy a relationship with the Food and Drug Administration.   

According to OpenSecrets.org, Manchin has accepted over $127,000 in campaign contributions from donors affiliated with Mylan, making the company the senator’s second largest corporate contributor. Mylan makes a wide variety of pharmaceutical products, including opioids.

There is no indication Manchin has ever acted on behalf of Mylan while in Congress, but his daughter’s involvement in the EpiPen scandal has created an embarrassing situation for the senator with many colleagues, including fellow Democrats.

"I demand that Mylan take immediate action to lower the price of EpiPen's for all Americans that rely on this product for their health and safety," Connecticut Sen. Richard Blumenthal (D) wrote this week in a letter to Bresch. “My office has been contacted by dozens of concerned Connecticut residents, families, school nurses, and first responders who urgently require your life-saving product but fear that its skyrocketing price has put it out of reach.”

“This outrageous increase in the price of EpiPens is occurring at the same time that Mylan Pharmaceutical is exploiting a monopoly market advantage that has fallen into its lap,” chimed in Sen. Amy Klobuchar (D), who called for a federal investigation of Mylan.

“Patients all over the U.S. rely on these products, including my own daughter. Not only should the Judiciary Committee hold a hearing, the Federal Trade Commission should investigate these price increases immediately,” Klobuchar said in a press release that claimed the Minnesota senator has “championed efforts to address the high cost of prescription drugs.”

Klobuchar’s concern about the cost of prescription drugs only goes so far. She is co-sponsoring legislation with Sen. Manchin that would establish a tax on all opioid pain medication.

If approved, it would be the first federal tax on a prescription drug levied directly on consumers.  Eight other senators are sponsoring the Budgeting for Opioid Addiction Treatment Act, also known as the LifeBoat Act, which would raise an estimated $2 billion annually to fund addiction treatment programs.

Democratic presidential nominee Hillary Clinton is another fan of Manchin’s opioid tax. In May, during a roundtable discussion about opioid overdoses in West Virginia, Clinton called the tax “a great idea” and said it was “one of the reasons why I am such an admirer of Sen. Manchin.”

Raising prices on opioids is one thing, but hiking the cost of EpiPens is apparently another. Today Clinton called the injector price hikes “outrageous” and “the latest troubling example of a company taking advantage of its consumers.”

Several weeks ago Pain News Network asked the Donald Trump campaign where the Republican nominee stood on the opioid tax. We have yet to get a response.

EpiPen Heather Bresch's "Baby"

Sen. Manchin has been in tangled situations before involving his daughter. In 2007, the Pittsburgh Post Gazette reported that West Virginia University bent the rules to give Heather Bresch a master’s degree in business administration – even though she had only completed about half the credits needed to earn it.

There is no indication that Manchin, who was then West Virginia’s governor, pulled any strings for his daughter, but the resulting scandal led to the resignation of several school officials and Bresch’s MBA degree was revoked.

That didn’t stop Mylan from promoting her to chief operating officer, then president, and now CEO.

Manchin was further embarrassed when Mylan took advantage of a tax loophole and moved much of the company's business to the Netherlands, where there are lower taxes and Dutch law made it easier to fend off a hostile takeover from a rival drug maker. Manchin told The National Journal that what his daughter did should be illegal.

Manchin has not commented publicly about the EpiPen pricing scandal, which Bresch played a major role in starting.  According to STAT, Bresch called the EpiPen her "baby" and spearheaded efforts to widen its use.

heather bresch

Mylan spent tens of millions of dollars in lobbying and advertising efforts that culminated in passage of a federal law that gives preferential treatment to schools that stockpile EpiPen injectors.  Sales of the EpiPen soared as a result and so did its price, even though the amount of epinephrine – the generic drug inside the injector – is only worth about $1 according to Bloomberg.

The EpiPen now generates $1.2 billion in sales for Mylan, which issued a long statement that vaguely blamed the injector’s soaring price on “changes in the healthcare insurance landscape.”

“This current and ongoing shift has presented new challenges for consumers, and now they are bearing more of the cost. This new change to the industry is not an easy challenge to address, but we recognize the need and are committed to working with customers and payors to find solutions to meet the needs of the patients and families we serve,” the company said.

The EpiPen scandal has enraged so many people that a MoveOn.org petition, called Stop Immoral Price Gouging for Life-Saving EpiPen, had garnered over 150,000 signatures.

Meanwhile, a petition drive aimed at scuttling the opioid tax has drawn a little over 1,600 signatures.

Senators Propose Tax on Opioid Pain Meds

By Pat Anson, Editor

A group of U.S. Senators has introduced legislation that would establish a federal tax on all opioid pain medication. If approved, it would be the first federal tax on a prescription drug levied directly on consumers.

The bill, called the Budgeting for Opioid Addiction Treatment Act, would create a one cent fee on each milligram of an active opioid ingredient in pain medication. Money from this “permanent funding stream” would be used to provide and expand access to addiction treatment.  

“A major barrier that those suffering from opioid addiction face is insufficient access to substance abuse treatment,” said Sen. Joe Manchin (D) of West Virginia. “This legislation will bridge that gap and make sure that we can provide treatment to everyone who makes the decision to get help. I look forward to working with my colleagues to get this bill passed so we can take another step forward in the fight against opioid abuse.”

Sens. Amy Klobuchar (D-MN), Jeanne Shaheen (D-NH), Angus King (I-ME), Heidi Heitkamp (D-ND), Tammy Baldwin (D-WI) and Bill Nelson (D-FL) are co-sponsoring the bill, which has been dubbed the “LifeBOAT” Act.

“By establishing a reliable stream of funding, this bill will bolster treatment facilities across the country, increase the amount of services available, and support people as they fight back against addiction – all while doing so in a cost-effective way,” said Sen. King.

The opioid tax would raise an estimated $1.5 billion to $2 billion per year. In an interview with the Portland Press Herald, King said the fee would range between 75 cents and $3 for a 30-day prescription, depending on the dose. He claimed many patients wouldn’t have to pay the additional cost because their insurance would cover it.

King said treatment programs need funding, and tacking the cost onto the price of the drug is a fair way to do it, much like automakers are required to install seat belts and air bags in vehicles.

“The obvious way to fund this is to build it into the price of the drug,” said King. “The cost of the drug should reflect the danger of the drug.”

Although most of the press releases and public statements from the senators avoid using the word “tax” and refer to it as a fee, the bill itself doesn’t hide behind semantics. The legislation would apply to the sale of “any taxable active opioid” and would amend the Internal Revenue (IRS) Code to make it possible.

The federal government and the vast majority of states do not levy a sales tax on prescription drugs. Only two states, Illinois and Georgia, currently have a sales tax on prescription medication.

"I don't understand how, in a world where we are getting upset about the 'tampon tax' we find it perfectly socially acceptable to tax chronic pain patients to pay for addiction treatment," said Amanda Siebe, who suffers from Chronic Regional Pain Syndrome (CRPS) and is a founder of the advocacy group #PatientsNotAddicts.

"With less than 5% of chronic pain patients becoming addicted to opiates, this leave the other 95%, who are often some of the poorest in America and have nothing to do with addiction or addiction treatment, to pick up the tab for addiction treatment. I find myself truly disappointed and ashamed of our government. This tax is discriminatory and we are going to fight it."

The LifeBOAT Act would exempt buprenorphine, an opioid used to treat addiction, from taxation, as well as all over-the-counter pain relievers such as acetaminophen. Cancer and hospice patients would be exempted from the opioid tax, although they would have to apply for a rebate to get their money back.

“The discount or rebate mechanism shall be determined by the Secretary of Health and Human Services with input from relevant stakeholders, including patient advocacy groups. The discount or rebate shall be designed to ensure that the patient or family does not face an economic burden from the tax,” a fact sheet on the bill states.

Sen. Manchin told to his colleagues that there would be little or no opposition to the bill.

“There’s not one person who will lose a vote over this. Not one person. You won’t be accused of voting for a tax,” Sen. Manchin said during a news conference announcing the bill.  He noted that no Republican senators have signed on as co-sponsors.   

“This is something that’s much needed, overdue and they all recognize it, but they’re scared to death. They’ve taken the (no tax) pledge. They’re scared to death somebody will use it against them. I’ll be standing beside my Republican colleagues if any Democrat tried to attack them and said they tried to vote for a tax,” Manchin said.

To read the full text of the bill, click here.

To watch a video of the press conference, click here.