State Senate approves surcharge on opioids

DOVER­­­ – The Delaware Senate on Tuesday passed a bill that would make Delaware the first state in the nation to establish a surcharge on opioids.

The measure, which was approved 17-4, now goes to the House.

Senate Bill 34 would add a fee of 1 cent per morphine milligram equivalent for name-brand opioids and ¼ cent for generics. Under the legislation, a 10mg pill of oxycodone would cost an extra 15 (brand-name) or 4 cents (generic).

Should it pass, the fee would raise an estimated $2.8 million in the first year. That money could be used for various addiction-related services such as sober living facilities, medication like naloxone that can reverse the effects of an overdose and care for addicts without health insurance. No more than 15 percent could be used for administrative purposes.

The fund would be overseen by the Department of Health and Social Services.

The legislation does not apply to opioids administered in hospitals, used to treat addiction, provided directly to patients by a hospice or dispensed by veterinarians. A manufacturer would only have to pay the surcharge if it dispenses the equivalent of more than 100,000 morphine milligrams in Delaware in a quarter.

The measure is sorely needed, the main sponsor argued during a 45-minute debate, noting drug deaths have skyrocketed in recent years. According to DHSS, 419 people fatally overdosed last year, up from 345 the year prior, while the Centers for Disease Control and Prevention ranked Delaware sixth in the country in overdose mortality rate in 2017.

Stephanie Hansen

“The argument that you’ve heard from the pharmaceutical companies is that this is wrong-headed because we don’t tax other medications. First of all, it isn’t a tax, it’s an impact fee,” Sen. Stephanie Hansen, D-Middletown, said.

“Second, government has not had to step up and provide millions of dollars, taxpayer dollars from all of us, for increased law enforcement costs, criminal justice costs, emergency medical costs, social service costs, the cost of setting up an entirely new system of care and facilities to deal with addiction for other medications.”

The issue has been referred to by many as one of the defining health problems of the 21st century, and the federal government declared the situation a public health emergency in 2017. The number of overdose deaths in the United States increased more than fourfold from 1999 to 2017, when it surpassed 70,000.

But while everyone agrees the epidemic needs to be stopped, some lawmakers believe the proposal would simply drive up the cost of vital drugs and discourage manufacturers or distributers from doing business in Delaware.

“No one’s ever taxed themselves out of any sort of drug crisis as far as I know,” said Sen. Colin Bonini, R-Dover.

Supporters countered that the market will prevent prices from increasing too much.

But a few remained unconvinced, with Sens. Dave Lawson, R-Marydel; Bryant Richardson, R-Laurel; and Dave Wilson, R-Bridgeville, joining Sen. Bonini in opposing the bill.

Several Republicans questioned whether $2.8 million would be enough to make a difference, with Sen. Bonini describing it as “stunningly naïve” to think so.

Sen. Hansen fired back, passionately defending her bill.

“For the last two years, I have been boots on the ground on this issue,” she said. “I have taken people through this process. I have visited our centers that do detox. I have talked to the people that run these programs. I’ve talked to people that have gone through a revolving door over and over again about what’s the problem. I’ve talked to our first responders about them not having enough money for naloxone to give out to all the people that need it.”

The added surcharge will save lives, she pledged.

The difference in the additional cost for brand-name versus generic drugs, Sen. Hansen explained after the vote, is because of pricing differences between the two. According to a fiscal estimate attached to the bill, about 85 percent of opioids are believed to be generic.

New York attempted to add a surcharge to opioids last year but was blocked from doing so by a federal judge due to a provision in the law that sought to prevent companies from passing costs along to users and was deemed unconstitutional.

Delaware lawmakers introduced several versions of an opioid fee bill in 2018, but all of them failed to advance through the legislature. A measure from Sen. Hansen would have prohibited manufacturers from raising their prices to make up for lost revenue due to the surcharge. That portion is not present in Senate Bill 34.

While Gov. John Carney supports the concept, he is wary of increased costs being passed along to consumers, according to a spokesman.

The last word on the bill before the vote Tuesday came from Sen. Jack Walsh, D-Stanton.

“When you have a loved one that you drop off at one of these treatment facilities and you don’t get to see them for seven days, you don’t know what’s going on, you’ll know what this is all about,” he told his colleagues. “This affects all of us.”

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