Senate Bill Proposes Tax on Opioid Medications

Sen. Joe Manchin (D-WV) introduced a bill that would look to impose a tax on all opioid medications.  The bill, co-sponsored by Sens. Amy Klobuchar (D-MN), Jeanne Shaheen (D-NH), Angus King (I-ME), Heidi Heitkamp (D-ND), Tammy Baldwin (D-WI), and Bill Nelson (D-FL), calls for a one cent tax on each milligram of active ingredient.  Other ingredients found within the medications would be exempt from the tax.  Revenue generated from this bill, called the Budgeting for Opioid Addiction Treatment Act, or LifeBOAT, would be used exclusively for substance abuse treatment efforts including the construction of new treatment facilities and expanding access to substance abuse programs.  The bill would exempt opioids used in the treatment of addictions, and patients would be eligible for a rebate on taxes paid when the medications are used for cancer treatment or hospice care.

The effects of this new legislation on the workers’ compensation system could be quite significant.  Opioids continue to be the most highly prescribed class of medication for work-related injuries, and including a 1 cent tax per each milligram of active ingredient within the medications will result in a substantial increase in prescription costs for an employer and/or carrier.  While the passing of this bill is not a sure thing, it does provide an opportunity to take a quick inventory of cost control measures that may or may not be in place within your program. 

Legacy claims continue to be a huge cost driver in any workers’ compensation program, and prescription medications are a big reason why.  It would be a smart decision to tackle these claims before they get out of hand, and if they have spiraled out of control, a plan must be put together to mitigate the exposure and settle the claim.  Legacy Claim Solutions stands ready to assist any self-insured employer, TPA, or insurer devise and implement a settlement strategy to mitigate the exposure caused by legacy files and escalating prescription costs.

To read the LifeBOAT bill in its entirety, please click here.