May 7, 2019

House and Senate Conference Committee 
HF 400/ SF 751, Opioid Tax
1100 Minnesota Senate Building, Room 1100
95 University Avenue
Saint Paul, MN  55155

Dear Conferee,

You are conferencing SF 751 and HF 400, two bills that allegedly address the opioid crisis in Minnesota by raising taxes on pharmaceutical manufacturers and wholesalers.  While the Council for Citizens Against Government Waste (CCAGW) understands your concern over the opioid epidemic, these bills will not address the problem and would raise the cost of pharmaceuticals in your state.  On behalf of the 35,499 CCAGW members and supporters in the state of Minnesota, I ask that you oppose these bills.

It is ironic that another Minnesota legislative conference committee is meeting simultaneously to work out the differences in two pharmaceutical transparency bills in order to better “combat skyrocketing prescription drug pricing,” while your committee will tax pharmaceutical companies and wholesalers to fund an opioid advisory council, among other initiatives, that will increase the price of drugs in the state and may force some manufacturers to withdraw their products, which means less competition.  Since 90 percent of all prescriptions dispensed are generics, these taxes would be particularly harmful to generic manufacturers, whose products behave more like commodities and have low profit margins.

A January 2019 Matrix Global Advisors report pointed out where the focus on fighting opioids needs to be.  Approximately 36 percent of people that are misusing painkillers get their drugs from doctors.  The rest, 64 percent, get their drugs from a friend or relative, a drug dealer, or some other way.  A large and increasing number of people are getting their drugs from non-prescription opioids, like heroin and illegally manufactured fentanyl.  The CDC reported that in 2017, more than 28,000 deaths in 2017 were due to synthetic opioids (other than methadone), which is more deaths than from any other opioid.

According to the DEA, most of the illicit fentanyl being brought into the U.S. is coming from China and Mexico.  Fentanyl is also being mixed with other controlled substances, often being sold as a counterfeit prescription pain reliever.  On January 31, 2019, AP reported that the largest illegal shipment of fentanyl, nearly 254 pounds, was seized at the Mexican border by U.S. Customs and Border Protection officers.  And it is not just fentanyl, other drugs such as heroin, cocaine, and methamphetamine are coming in as well from Mexico.

Legitimate pharmaceutical companies and wholesalers should not be taxed due to the illicit use of opioids and they should not shoulder the entire burden of addressing this crisis. These taxes will ultimately hurt taxpayers and patients with higher pharmaceutical costs and less competition.  I urge you to oppose SF 751 and HF 400.

Sincerely,

Tom Schatz
President, CCAGW

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