Renée Sunde: Raising costs on health care products will not solve opioid crisis
Most businesses today struggle to keep up with rising health care costs, and these same challenges are falling on employees and their families. Washington’s employers do their part to slow the growing cost of health insurance and premiums, but it has become increasingly difficult to maintain these efforts as lawmakers seek punitive fees on the health care supply chain.
SB 5988, a bill currently included in the Senate’s budget proposal, is aiming to increase taxes on companies that warehouse pharmaceutical products – primary wholesale distributors – to raise $38.5 million for state coffers. Presumably designed to address the opioid epidemic, this bill completely misfires at the root causes of the rampant addiction that we are now facing, and it threatens to increase health care and prescription drug costs across the state even further.
Wholesale distributors are responsible for managing the security and integrity of our state’s health care infrastructure, and they help it function efficiently. Working as the logistics arm of the supply chain, this critical and robust workforce is equipped with the necessary equipment and warehousing facilities to enable the quick, safe, and affordable delivery of all medical products to health care settings across the state and country. Wholesale distributors’ major function is to ensure licensed caregivers can serve patients and consumers have access to rightful care each and every day.
These companies do not market individual drugs, manufacture medication or medical products – including prescription opioids – and they do not control prescribing patterns. Squeezing their bottom line for treatment funds simply will not lessen opioid addiction and abuse. It will, however, have significant unintended consequences on healthcare and the economy.
No industry can absorb a nearly $40 million tax increase. This dramatic change could force wholesale distributors to make tough decisions. The price of some medications and medical procedures could increase. That means higher costs for care facilities, patients and employers. And that seems a bit counterintuitive for an industry that works so hard to reduce costs and save the entire health care system and taxpayers millions of dollars each year. It also is counter to the efforts Washington legislators have put in place to control prescription drug costs.
This misguided policy is a lose-lose situation, and it is bad for businesses, patients and everyday Washingtonians.
SB 5988, although well-intended, reflects a significant misunderstanding of the pharmaceutical supply chain and could ultimately drive up our health care costs. Punitive fees on an industry almost never work as intended, and it is everyday citizens that end up footing the bill. Instead, lawmakers need to look for solutions to the opioid epidemic that promote the use of opioid-free pain relievers, raise public awareness about the risks associated with opioids, and bring real, life-altering treatment to those who need it.
Washington’s business leaders understand that the opioid epidemic has brought about great social and economic peril to our communities. But residents deserve an effective response, not a slapdash effort that could do more harm than good. Legislators should head back to the drawing board and come up with a real plan that will deliver real results.
Renée Sunde is the president and CEO of the Washington Retail Association, which represents a diverse membership of some 3,500 storefronts across the state. Established in 1987, the WRA supports merchants by studying policies and legislation that advances and safeguards the well-being of the state’s retail industry.