New York does not levy sales tax on either over-the-counter or prescription medication, and it shouldn’t. The people who most need such drugs to address their health or ease their pain are often the ones least able to afford them.
But a bill imposing such a tax and signed last year by Gov. Andrew Cuomo did try to take that into account. The law said the estimated $100 million to be raised annually from manufacturers of opioids could not be passed on to consumers. But in December, a federal district court judge in Manhattan said the state law could unconstitutionally shift the burden of the cost to out-of-state consumers.
The law likely wasn’t going to be nearly as helpful in funding addiction treatment and prevention programs as many hoped. It designated only $20 million of that $100 million to be raised each year to address the drug-addiction crisis, with no specific plan for getting that help to those who needed it. The rest of the money would go to the state’s general fund.
Cuomo is trying it again, with a new bill in this year’s budget, and it’s worse. This time the tax can be passed on to the consumer, making the law more likely to survive a legal challenge but worse for New Yorkers.
The state has done a good job of cracking down on a number of painkiller prescriptions for people who shouldn’t have them because of its I-STOP oversight system. As dangerous and powerful as opioids are, most people getting them legally need them and shouldn’t have to pay a surcharge on top of their out-of-pocket costs. And since users only pay a fraction of a drug’s costs, the higher tax on manufacturers means insurance premiums for all New Yorkers would climb.
Drug companies that were complicit in fueling opioid addiction must be made to pay to address that problem. But New York already is seeking that remedy in the courts. Increasing costs for all New Yorkers will only make the affordability crisis in health care even worse.