Oregon - Oppose HB 3192 | Council For Citizens Against Government Waste

Oregon - Oppose HB 3192

March 29, 2019

Oregon House of Representatives
900 Court Street, N.E.
Salem, Oregon 97301

Dear Representative,

On behalf of the 32,506 members and supporters of the Council for Citizens Against Government Waste in Oregon, I urge you to oppose HB 3192, a bill that would impose a tax on opioid manufacturers of $0.01 per morphine milligram equivalent dispensed per year.

This bill would impose substantial costs on drug manufacturers in an attempt to fight the opioid crisis. Unfortunately, this bill will not solve the opioid crisis, which has numerous components that require different solutions.

In a time rife with complaints about high drug prices, taxing manufacturers is a nonsensical response. The bill requires manufacturers not to increase the wholesale or retail price of any prescription opioid to recover the increase cost due to the tax. This policy, which is a price control, would be difficult to calculate and enforce as the price of a drug could increase for many reasons, such as a shortage of a particular ingredient. The tax may also violate several federal laws like Medicare, Medicaid, the Due Process Clause, and the Commerce Clause. 

More than likely, manufacturers may choose not to sell their product in Oregon. Since 90 percent of all prescriptions dispensed are generics, these taxes would be particularly harmful to generic manufacturers, whose products behave more like commodities where prices fluctuate and have low profit margins. 

The bill also requires the Oregon Health Authority to turn extensive personal patient data to the Department of Revenue to determine an accurate tax assessment for each manufacturer. It may be necessary to turn over this information to manufacturers, so it can be reviewed for accuracy. 

According to the Center for Disease Control (CDC), the opioid prescribing rate has dropped by approximately 28 percent between 2012 and 2017. Limiting prescription quantities, implementing drug monitoring programs, and educating doctors on the proper use of opioids have helped to reduce their use, while allowing access to them by patients that desperately need the medications. However, the opioid addition problem is wide-ranging and goes beyond legal prescription drugs and patients using these drugs correctly. 

Matrix Global Advisors pointed out that approximately 36 percent of people who 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 that year were due to synthetic opioids (other than methadone), which is more deaths than from any other opioid. 

According to the Drug Enforcement Agency, 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 should not be punished for the illicit use of opioids and they should not shoulder the entire burden of addressing this crisis. These taxes and fees will ultimately hurt taxpayers and patients with higher pharmaceutical costs and less competition. 

Please oppose HB 3192.

Sincerely,

Tom Schatz
President, CCAGW

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