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Manchin’s opioids tax plan faces pushback from lobbying groups

West Virginia moderate wants the levy added to Democrats' reconciliation package

Sen. Joe Manchin, D-W. Va., holds a news conference Wednesday in the Hart Senate Office Building .
Sen. Joe Manchin, D-W. Va., holds a news conference Wednesday in the Hart Senate Office Building . (Bill Clark/CQ Roll Call)

Lobbyists are trying to block a bid by West Virginia Democratic Sen. Joe Manchin III to add a tax on prescription opioids to the reconciliation package as one of his requirements for supporting the legislation.

Manchin has long supported policies to bolster addiction treatment and prevention. West Virginia has faced some of the harshest effects of the opioid crisis. Preliminary data from the Centers for Disease Control and Prevention for the 12-month period ending in February 2021 showed drug overdose deaths rose 55.2 percent in the state.

Mingo County, in the state’s southern section, has suffered from some of the highest rates of prescription opioid-related deaths in the country. The House Energy and Commerce Committee found that distributors shipped shockingly high numbers of pills there.

But the idea of taxing prescription pills is drawing criticism from drug supply chain groups and advocates focused on chronic pain and. So far, Democratic leaders have not said whether they will accept the proposal for inclusion into the reconciliation package.

Manchin earlier this year introduced a bill that would provide permanent funding for substance use treatment by placing a small fee on prescription opioids. The 1-cent fee on each milligram of active opioid ingredient per dose would be footed by manufacturers, producers or importers, with some discounts or rebates given when prescribed to hospice and cancer patients.

It would also not apply to individuals seeking medication-assisted treatment for an opioid use disorder.

The fee would fund the Substance Abuse Prevention and Treatment Block Grant that is used to pay for things like new treatment facilities or expanding and operating treatment programs. It would also require the Department of Health and Human Services to write a report on the legislation’s effects, including the impact on the retail cost of these drugs.

Some states like Delaware and New York have implemented similar taxes on prescription opioids.

Combating the drug crisis is a bipartisan priority in both chambers, but to date, Manchin’s bill has not seen much action. Versions of the legislation have been introduced since 2015, but it has not been marked up by the Senate Finance Committee.

The bill currently has only one Republican sponsor — Sen. Mitt Romney of Utah — making it a tougher sell outside the reconciliation process, especially with lawmakers with strong ties to the pharmaceutical industry.

Rep. Donald Norcross, D-N.J., has previously introduced the House companion bill but does not have immediate plans to reintroduce it this Congress. The base text of the House reconciliation package doesn’t include the proposal. Norcross’ focus is another mental health parity bill included in the House reconciliation legislation.

Lobbying efforts

A tax on a legal drug is unusual, according to experts.

Other drugs that contribute to overdose deaths are illegal and cannot be taxed, making prescription opioids unique. Alcohol, tobacco and, in some areas, recreational marijuana are subject to a so-called sin tax but are not marketed for their medical benefits.

Two industry trade groups, the Healthcare Distribution Alliance that represents drug distributors and the Association for Accessible Medicines, both oppose taxes on opioids.

AAM, which represents generic drugmakers, including Teva Pharmaceuticals, said taxes on opioids “undermine generic competition and increase prices for patients.”

The Supreme Court on Monday declined to hear an appeal by the two groups challenging a similar New York state opioid tax law.

Manchin’s bill has seen some pushback from advocates who worry it would affect acute pain patients who are not specifically carved out in the bill.

The National Council on Independent Living is concerned the bill could create additional barriers for individuals with pain.

“While we appreciate the fact that the bill includes exceptions that are intended to protect patients from increased costs, we’re concerned that in practice, the proposed solutions won’t be workable, given the already complex system of coverage,” said Lindsay Baran, the group’s policy director, pointing to barriers like prior authorizations and complicated formularies. “The result will likely be additional administrative barriers and delays or denials of necessary care.”

She said the bill also includes language that promotes residential treatment facilities and long-term treatment, and the group worries that it excludes the full range of treatment options for patients to have control over their treatment and recovery.

Kate Nicholson, president of the National Pain Advocacy Center and a former Justice Department lawyer, said that despite the bill’s intention, similar state bills have eventually resulted in the fee being passed down to patients rather than to manufacturers and producers.

“It’s focusing on the medication, saying one class of patients is more deserving than another class of patients. And that’s problematic,” said Nicholson, who also co-wrote an op-ed in opposition to the bill in August. “Why is someone who has a substance use disorder more deserving than someone who has multiple sclerosis?”

A senior House Democratic aide said conversations are ongoing on specific requests for legislation to be included.

“I think this is a very interesting and bold concept introduced by Sen. Manchin. However, opioids have a variety of legitimate uses despite their potential for abuse,” said Andrew Kessler, founder of Slingshot Solutions, which specializes in behavioral health policy consulting. “Possibly a more detailed bill would be able to gain more support in the near future.”

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