The Business Council strongly opposes the adoption of S.1509 / A.2009 Article VII Revenue, Part XX, as added in the Governor’s 30-day amendments to the Executive Budget Proposal. This legislation would create a costly new excise tax on the first sale of an opioid in the State and would drive up the costs of prescriptions, as well as a host of other unintended negative ramifications for New Yorkers.
This legislation creates greater financial penalties on every entity involved in the wholesaling, distribution and sale of legal prescription drugs, prescribed by physicians under the already stringent opioid prescribing laws and regulations of the State. Thus, this tax will work to limit access to prescribed medications while simultaneously driving their costs up.
The legislation plainly states that “the tax may be passed down to the purchaser,” which means that this unfair tax will unquestionably be felt by patients and consumers such as hospice organizations and hospitals as well as vulnerable patients in need of pain relief for legitimate health issues. This is a regressive tax in the most egregious sense of the term. The Business Council has consistently pleaded with the Legislature to create policies to address the endless growth of the cost of healthcare. This proposal would do the very opposite by raising the price of pharmaceuticals and exacerbating the problem for every New Yorker who pays for health coverage.
The impetus of this proposal’s predecessor legislation, which was found to be unconstitutional, was and remains to aid in the State’s opioid epidemic. However, this legislation does nothing to address the causes of the opioid epidemic. In fact, it may actually worsen the crisis and lead to greater suffering and even death.
In a recent study on the impacts of this legislation by Union College Economic Professor Lewis Davis, PhD., and co-author, Jia Gao, PhD., an assistant professor of economics at Union College, the professors concluded that among other things, “by increasing the cost of prescription opioids, the proposed tax will encourage New York residents suffering from opioid dependence to switch to cheaper illegal opioids, including heroin and illegally sourced fentanyl, with dramatically increased overdose risks. As a result, the proposed tax may actually increase the rate of opioid-related deaths in New York State.”
This tax is bad for manufacturers, distributors, pharmacies, clinics, hospice providers, hospitals, patients and health insurance premium payers – this legislation is bad for New York. The unfair excise tax may help close the State’s budget gap, but leave in its wake a tremendous amount of needless suffering.
For these reasons, The Business Council strongly opposes S.1509 / A.2009 Article VII Revenue, Part XX, and urges its rejection by the Senate and Assembly.