In 1819, U.S. Supreme Court chief justice John Marshall aptly warned that “the power to tax involves the power to destroy.” Today, new state taxes on prescription opioids threaten to destroy the market for them, along with the lives of patients who depend on them for control of crippling pain. And these taxes may ultimately increase drug-overdose deaths.

Over the past three years, New York, Delaware, Minnesota, and Rhode Island have imposed taxes and fees on opioid manufacturers and pharmaceutical distributors that deliver opioids to pharmacies and hospitals in their respective states. Other states are expected to follow suit. Senator Dick Durbin (D., Ill.) has proposed a national excise tax on prescription opioids.

These taxes are intended to discourage opioid abuse and raise revenue to fund opioid treatment and deterrence programs. They have little chance of achieving these laudable objectives, however, for the following reasons: First, prescription opioids are playing a diminishing role in the opioid crisis; second, the taxes will raise prices, leading prescription opioid users to switch to cheaper, and more dangerous, illicit drugs; and third, the taxes will raise less revenue than expected.

Because of decreases in opioid prescribing and a shift by opioid abusers to illicit opioids, the new taxes come years too late to have a meaningful impact on opioid-overdose deaths. As the Centers for Disease Control (CDC) explained, the opioid epidemic evolved in three waves. Prescription opioids played a significant role in the first wave in the 1990s and 2000s, when their use increased in response to concerns that pain was being undertreated and to aggressive marketing by opioid makers that downplayed the risk of addiction. In addition, a rising market share of generic opioids and coverage of opioids by the 2006 Medicare Part D program, which provided subsidized drug coverage for the traditional elderly Medicare population and the expanding Social Security Disability Insurance population, led to lower out-of-pocket opioid prices, which lowered the price of misuse. Opioid prescriptions roughly tripled between 1991 and 2010, and overdose deaths attributable to them nearly quadrupled between 1999 and 2010.

But the importance of prescription opioids began to wane in the second and third waves, following efforts to curtail prescription-opioid abuse and as supply expansions of illicit opioids — largely heroin from Mexico and fentanyl from China — provided cheaper alternatives. The second wave began in 2010, after the introduction of abuse-resistant OxyContin, reformulation of pain-treatment guidelines by professional societies and accrediting organizations, the implementation of state electronic-prescription databases to monitor opioid prescribing and detect “doctor-shopping” by patients, and crackdowns on cash-for-pill outfits (“pill mills”). The opioid-prescription rate peaked in 2012 and has been declining ever since. Some of those addicted to pain relievers substituted cheaper heroin, resulting in rapidly rising numbers of heroin overdoses.

In the third wave, which took off in 2013, an increasing number of addicted individuals switched to cheap, and extremely potent, illicit synthetic opioids, predominantly fentanyl, triggering a precipitous rise in overdose deaths. By 2018, roughly two-thirds of opioid-overdose fatalities were attributed to these synthetic opioids. Overdose deaths from illicit opioids surpassed deaths from prescription opioids in 2013–14. Overall, drug-overdose deaths have accelerated during the COVID-19 pandemic, primarily driven by increases in deaths from illicitly manufactured fentanyl.

Prescription opioids are no longer a pressing problem. The amount of prescription opioids dispensed has declined by 60 percent since 2011. The CDC cites a range of addiction to opioid medication in chronic-pain patients from 0.7 percent to 6.1 percent, though lower and higher estimates can be found. The estimate drops to under 1 percent in patients without prior history of addiction and no concurrent problem with depression or other psychiatric conditions. In the first wave, over-prescription led to an excess supply of pills that could be diverted to abuse. Now that opioid prescriptions have decreased, there is less excess supply beyond what legitimate users need that can be diverted to illegitimate users, and so there is little reason to think taxes will significantly decrease opioid abuse.

These new taxes will, however, inflict suffering on people who use prescription opioids appropriately. Unlike most products on which taxes are levied to discourage use — cigarettes, for example — opioids have important medical uses, providing vital pain relief for people with various acute- and chronic-pain syndromes. Although there are some non-opioid pain-management alternatives, they may not be reliably covered by insurance, and they are not easily obtained even when they are covered. And some patients fare best on opioids or require them as an adjunct to other medications or interventions.

The new taxes pose a direct threat to the availability of prescription opioids for pain relief. In the short run, manufacturers and suppliers subject to the tax may be unable to raise prices because of existing contracts with insurers. They may markedly reduce or even cut off supplies of the taxed opioids, blocking patients from obtaining pain relief. The tighter supply will drive up prices, posing an additional obstacle to patients who need pain relief.

This alarming scenario is already playing out in New York. A number of opioid manufacturers and distributors no longer sell opioids there, which has led to higher prices for New York pharmacies. Unable to recover their higher costs from insurers in the short run, some pharmacies have stopped carrying the taxed opioids. Legitimate patients are struggling to find prescription opioids.

Eventually, the supply limitations will ease as manufacturers and distributors renegotiate their agreements to pass the tax increase along as higher prices. Those increases will be paid in full by uninsured patients and partially paid by insured patients, who are increasingly being required to share costs through coinsurance. A majority of Medicare Part D prescription-drug plans, which have become the largest payers for prescription opioids, are subject to coinsurance rather than fixed copays. Of course, the higher costs will make opioids less affordable for many legitimate users.

The taxes are exacerbating an ongoing calamity. Even before the taxes, new prescribing guidelines, government oversight, and public backlash against opioid manufacturers and over-prescribing had made physicians reluctant to prescribe opioids, even for legitimate users. A 2017 survey of 3,108 chronic-pain patients revealed that 71 percent could no longer get needed opioid prescriptions or were getting a lower dose; eight out of ten said their pain and quality of life were worse; and more than 40 percent said they considered suicide as a way to end their pain. One in ten resorted to illegal opioids for pain relief. Primary-care clinics are reluctant to take on chronic-pain patients, and many pain specialists have been required to reduce the quantity or dose of opioids prescribed for chronic pain.

As occurred in the second and third waves of the crisis, supply limitations and increased prices of prescription opioids resulting from the taxes will increase demand for illicit opioid substitutes. Patients with legitimate opioid needs and opioid abusers alike may turn to street pain relievers that have variable purity and potency, increasing the risk of accidental overdose. Increasingly, drug dealers are pressing fentanyl — estimated to be 50 times as potent as heroin — into pill shape to make counterfeit opioid pills that can kill the unsuspecting.

Aside from its cost in human lives, the switch to untaxed, illegal drugs will reduce the taxes’ revenue yields. The revenue yield will be further diminished as opioid users fill their prescriptions in neighboring states where the prescription drugs are more available and cheaper. As a result, the taxes will fail to raise the revenue intended to fund opioid-treatment and -deterrence programs. The New York tax has reportedly generated far less than anticipated, and the state did not increase funding for drug-treatment programs.

In sum, state opioid taxes will be counterproductive, even deadly. Prescription opioids are no longer the main driver of the opioid crisis, but they remain an indispensable therapeutic resource for patients with chronic and acute pain. Taxes will raise prices for those patients, denying them pain relief or leading them to switch to far riskier, and potentially deadly, illicit opioids. Treatment and deterrence programs should be financed by existing general taxes, not taxes that destroy legitimate prescription-opioid use.

— Sally Satel, M.D., is a visiting professor of psychiatry at Columbia University’s Vagelos College of Physicians and Surgeons and a resident scholar at the American Enterprise Institute. Joel Zinberg, M.D., J.D., is a senior fellow at the Competitive Enterprise Institute and an associate clinical professor of surgery at the Icahn Mount Sinai School of Medicine. He was general counsel and a senior economist at the White House Council of Economic Advisers from 2017 to 2019.