Drug Companies to Pay for Addiction Treatment
By The Orlando Recovery Center
Last Updated: April 10, 2023
Editorial Policy | Research Policy
In response to the opioid crisis taking place in his state, Minnesota Governor Mark Dayton has put forward an Opioid Action Plan that would provide about $20 million annually to help communities in Minnesota fund opioid prevention, treatment and recovery strategies. Known as the “Penny-a-Pill” plan, this initiative enacts a one-cent fee for each unit of dispensed opioids by pharmacies. The fee would increase for different concentrations of opioid drugs. Funds from this plan would also apply to emergency services that respond to opioid-related incidents. This Opioid Stewardship Plan aims to monitor prescription practices and support law enforcement and public health.
Some of the strategies this plan adopts include:
- Supporting at-risk populations, including native peoples
- Prescription practice monitoring with the Minnesota Board of Pharmacy
- Enhanced addiction screening tools
- More opioid addiction treatment in medical care contexts
- Increased access to Naloxone, a reversal medicine for opioid overdose
- Local law enforcement training and research
- Access to addiction recovery at incarceration facilities
Legislation like Minnesota’s aims to end the opioid epidemic, which claims thousands of American lives each year and affects public health.
Do States Have Taxes or Fees for Opioids?
Taxing opioids has been a shared idea among state lawmakers throughout the country. In April 2019, Delaware proposed a Prescription Opioid Impact Fund that would require pharmaceutical manufacturers to pay a portion of the costs associated with opioid addiction and treatment. The state of West Virginia put forward a public health bill that placed strict standards on pain management clinics and opioid prescriptions, even requiring a contract in some cases for dispensing narcotics.
New York Governor Cuomo signed into law a budget bill in January 2018 that requires opioid drug manufacturers and distributors to pay a portion of the annual opioid stewardship payment. These funds must be used for treatment, education, prevention and recovery services. New York will also use these funds to support their prescription monitoring registry. Many other states are following suit and proposing or negotiating legislation that would place financial restrictions or requirements on pharmaceutical companies that manufacture and sell opioids.
Similar tactics to Minnesota’s have been proposed at the federal level. On February 7, 2019, Senator Manchin from West Virginia introduced the Budgeting for Opioid Addiction Treatment Act. This bill would add a one-cent-per-milligram fee on opioid sales. These funds would be used for opioid abuse prevention, training and treatment.
Does Taxing Opioids Reduce Misuse?
Placing taxes or fees on pharmaceutical companies who manufacture and distribute opioid drugs is meant to help prevent misuse that leads to opioid addiction. But does taxing or imposing fees on pharmaceutical companies actually reduce misuse and addiction?
Taxing addictive or misused substances has been practiced before in the United States. In 1993, stringent taxes were applied to tobacco products, which generated significant revenue for anti-smoking ads and education. Part of this strategy was a purchasing deterrent as well as taxes and fees made tobacco products more expensive.
Opiates, on the other hand, occupy a different category as they are controlled substances. Unlike the case of tobacco products, taxes on opioid drugs cannot be applied directly to the consumer. So, lawmakers have been taking the strategy instead to apply taxes and fees directly on the manufacturers. Lawmakers are hopeful that these fees could result in:
- Pharmaceutical companies investing more research in opiate alternatives
- Prescribers choosing alternative courses of treatment
- Decreased stock and availability of opiates
Some people oppose these initiatives and remind lawmakers that, when used correctly, opiates and opioids are very effective and essential for people with chronic pain conditions. However, people who support these bills argue that the benefits of combating the opioid crisis and reducing the availability and use of these highly addictive substances outweigh the drawbacks. Regardless of which strategies are adopted, every citizen can be a part of ending opioid addiction by understanding and supporting prevention and recovery efforts in their community.
Congress.gov. “S.425 – Budgeting for Opioid Addiction Treatment Act.” Introduced February 7, 2019. Accessed June 23, 2019.
Delaware State Senate 149th General Assembly. “Senate Bill No. 176 An Act to Amend Titl[…]n Opioid Impact Fund.” Released April 19, 2018. Accessed June 23, 2019.
National Center for Biotechnology Information. “Tobacco Taxation in the United States.” Published 1994. Accessed June 23, 2019.