NCSL RELACS Seminar, October 2018 Timeline Prior to and ... · Bill Case Study: Delaware’s Opioid...

Bill Case Study: Delaware’s Opioid Impact Fee

NCSL RELACS Seminar, October 2018

Timeline

Prior to and through February 2018

• State agencies addressing opioid addiction epidemic through creation of Prescription Monitoring

Program (PMP), Prescription Drug Action Committee, new regulations regarding prescribing opioids,

medical provider and consumer education, expanding the availability of naloxone, etc.

• atTAcK addiction advocates for opioid fee to create a stewardship fund.

• In 2017, the Addiction Action Committee and the Behavioral Health Consortium are created by the

General Assembly, both groups are discussing solutions to opioid epidemic.

• Research on similar initiatives in other states (Legislative Fellows).

• Delaware Department of Justice files suit against manufacturers, distributers, and retailers of

prescription opioid drugs, alleging that their failures to meet their legal obligations have fueled an opioid

addiction epidemic that is devastating individuals, families, and communities across Delaware. The

lawsuit seeks to hold them financially responsible for the harm they have caused to the State and its

citizens and to require them to change their conduct to help end the epidemic.

March

• Researched Constitutional fee issues.

• Fee or Tax, to determine if legislation could start in Senate.

• Result was to draft as an impact fee.

• Researched information for whereas clauses, to support impact fee.

• Suggestion received to base the fee on data in the PMP because know each dose of every opioid

dispensed in Delaware, by manufacturer and data does not include opioids used to treat addiction,

dispensed by hospice, or dispensed by veterinarians.

• While drafting, Legislative Attorney had discussions with

• Sponsor while drafting. Sponsor is a land use attorney, so familiar with impact fees.

• Office of Controller General to identify similar models in Delaware law & estimate revenue.

• DPR, the state agency that regulates pharmacies, pharmacists, and maintains PMP.

• HB 358 Introduced.

• Creates a 10% tax on purchase price of opioids, an Opiate Stewardship Fund, an opioid

addiction policy advisor in Governor’s Office, & establishes the Opiate Stewardship Advisory Council.

April

• Discussions with sponsor while drafting.

• SB 176 Introduced.

• Creates a Prescription Opioid Impact Fee of 1 penny per MME that is assessed quarterly based

upon dispensing data in Prescription Monitoring Program database, paid by pharmaceutical

manufacturers and a Prescription Opioid Impact Fund, revenue allocated by DHSS Secretary with input

from Addiction Action Committee and the Behavioral Health Consortium. Uses whereas clauses to

establish the basis for the impact fee.

• SB 176 Fiscal Note released.

• FY 19 costs $10,400 (to be reimbursed from Fund), $0 costs thereafter.

• Anticipated Revenue: FY 19, $8,550,000; FY 20, $8,122,500; FY 21, $7,716,375.

• Discussed concerns with pharmaceutical manufacturers.

• Federal judge grants the state’s request to remand the DOJ lawsuit against opioid manufacturers,

distributors, and drugstores back to state court.

May

• Sponsor hosted meeting with DPH, DPR, PHARMA, emergency department physician, House Democrat

sponsor of HB 358.

• Senate sponsor of SB 176 had discussions with House sponsors of HB 358.

• Sponsor met separately with AMA, Lt. Governor, pharmaceutical manufacturers, State agency

representatives, pharmacists. (Legislative Attorney attended).

• Physicians: 4th Circuit decision about price control, want drug formulary transparency,

potential price increase for patients, and should not impact opioids used for treating addiction.

• Senate Health Committee hearing, Released.

Issues raised at hearing and in discussions:

• Governor: Want comprehensive revenue package, not separate fees. Legal and practical

concerns regarding taxing out of state manufacturer – nexus requirement, can State license out of state

manufacturers & distributers, might not send to correct address, and they might not pay the invoice.

May increase price of the product. Instead, rely on national class action for funds.

• DHSS: Operational concerns – cost, staffing. No difference in fee for brand name & generics,

don’t want to pass along higher costs to people with high deductible plans. Need more detail on

reporting requirements.

• Attorney General: Dormant Commerce Clause, 4th Circuit prescription drug price & Supreme

Court decision pending in Wayfair, sales tax cases: sufficient nexus with state and ability to prohibit

consumer price increase. Have expertise on consumer drug prices from lawsuit.

• Pharmaceutical companies: Prescription drugs should not be taxed, want to partner to identify

other sources of funding, have drugs in pipeline to treat pain & addiction. Already addressing addiction

issues by creating foundation or distributing disposal kits.

• Pharmacists: Prices to consumers and concern they will have to absorb a price increase.

• Patients: Prescription prices may increase for consumers.

• Parents, addiction treatment providers, emergency department physician: State desperately

needs increased revenue to improve access to immediate, longer, and different levels of treatment.

Money should be distributed by a group with no State budget responsibility so revenue is not used to

supplant current funding, used to balance budget.

• Sponsor: We are already paying for this epidemic, through health insurance, taxes to pay for

programs, criminal justice system, anguish of loved ones. Only ones not paying for this crisis are those

“fueling the fire.” Need to be careful as navigate legal issues but that doesn’t mean wait.

• Sponsor hosted 2 meetings with AG and State agencies with concerns (DOF, DHSS). Second meeting

included a Republican senator. (Legislative Attorney attended).

June

• Legislative attorney exchanged drafts and had long conversations with AG Office attorneys.

• Sponsor hosted meeting regarding final draft of a substitute bill, included the Republican House

sponsor of HB 358, advocates, Medical Society, AG, DPR.

• SS 1 for SB 176 Introduced.

Substantive changes from SB 176:

• Synopsis explains that PMP data does not include opioids administered in hospitals, provided

to patients by hospice, or dispensed by veterinarians.

• Fee is calculated at rate of 1 penny per brand-name prescription opioid dispensed and at ¼ of

a penny per generic prescription opioid dispensed.

• Places responsibility for fee at Department of State and responsibility for allocating funds to

the Addiction Action Committee.

• Restricts how funds can be spent.

• Removes prohibition on raising price to consumer.

• Revises whereas clauses to address commerce clause concerns.

• Adds specific authority to use PMP for this purpose.

• SS 1 for SB 176 Fiscal Impact released.

• Anticipated revenue: FY 19, $3,026,976; FY 20, $2,875,627; FY 21, $2,731,846.

• Worked with CGO staff to develop specific examples of the amount of the fee.

• New concerns raised over who should allocate the funds, General Assembly and General Assembly’s

ability to delegate spending authority.

• Sponsor held strategy meeting with AG and supportive Republican Senator.

• SS 1 for SB 176 Laid On Table in Senate after speech by sponsor and testimony by expert regarding

why prescription drug prices would not significantly increase as a result of the new Opioid Impact Fee.

August - October

• Discussions continue.

• Sponsor running for re-election.

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SPONSOR: Sen. Hansen & Sen. Delcollo & Sen. Henry & Rep. Hudson & Rep. KeeleySens. Ennis, McDowell, Poore, Sokola, Townsend, Walsh; Reps. Bennett, Mitchell, Mulrooney, Paradee

DELAWARE STATE SENATE149th GENERAL ASSEMBLY

SENATE BILL NO. 176

AN ACT TO AMEND TITLE 16 OF THE DELAWARE CODE CREATING A PRESCRIPTION OPIOID IMPACT FUND.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Three-fifths of all members elected to each house thereof concurring therein):

1 WHEREAS, Delaware, like the rest of the United States, is in the midst of an opioid overdose epidemic; and

2 WHEREAS, in 2016, opioids killed more than 42,000 people and 40% of those deaths were from prescription

3 opioids; and

4 WHEREAS, in 2016, the number of opioid overdose deaths were 5 times higher than the number of opioid

5 overdose deaths in 1999; and

6 WHEREAS, the prescribing rates for prescription opioids among adolescents and young adults nearly doubled

7 from 1994 to 2007; and

8 WHEREAS, from 2015 to 2016, Delaware had the second highest increase in drug overdose deaths; and

9 WHEREAS, in 2016, 308 Delawareans died from drug overdoses; and

10 WHEREAS, since 2009, more people in Delaware have died from a drug overdose than from a motor vehicle

11 injury; and

12 WHEREAS, in 2016, Delaware’s prescription rate of high dose opioids was the highest in the nation; and

13 WHEREAS, in 2016, Delaware’s prescription rate of long-acting/extended-release opioid pain relievers was the

14 highest in the nation; and

15 WHEREAS, in Delaware, opioids were prescribed at a rate of 870,046 prescriptions totaling 1,104,210,408

16 morphine milligram equivalents (“MME”) in 2015; 831,021prescriptions totaling 1,050,799,858 MME in 2016; and

17 759,521 prescriptions totaling 925,238,704 MME in 2017; and

18 WHEREAS, higher dosages of opioids are associated with a higher risk of overdose and death and higher dosages

19 have not been shown to reduce pain over the long term; and

20 WHEREAS, 4 in 5 new heroin users started out misusing prescription painkillers; and

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21 WHEREAS, in 2016, 3 percent of Delaware’s eighth grade students reported using a prescription drug illegally;

22 and

23 WHEREAS, nationally, Medicaid pays for 25% of the adults who receive residential treatment for opioid

24 addiction, while 10% of the adults who receive residential treatment are unemployed; and

25 WHEREAS, nationally, Medicaid pays for 37% of the adults who receive outpatient treatment for opioid

26 addiction, while 20% of the adults who receive outpatient treatment are unemployed; and

27 WHEREAS, Buprenorphine, sold under the brand name Suboxone, is an opioid used to treat opioid addiction and

28 40% of the total Buprenorphine spending in Delaware in 2016 was by Medicaid; and

29 WHEREAS, the Behavioral Health Consortium provides oversight of behavioral healthcare and substance use

30 treatment in Delaware and includes the Addiction Action Committee, which coordinates a comprehensive approach to the

31 addiction epidemic in this State; and

32 WHEREAS, the FY19 Governor’s Recommended Budget requests $100,000 for Substance Use Disorder Services

33 and Naloxone for First Responders; $328,500 for 20 additional Sober Living Beds; and $990,000 for Emergency Room

34 Consultations.

35 NOW, THEREFORE:

36 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Three-fifths of all

37 members elected to each house thereof concurring therein):

38 Section 1. Amend Part IV, Title 16 of the Delaware Code by making deletions as shown by strike through and

39 insertions as shown by underline as follows:

40 Chapter 48B. Prescription Opioid Impact Fund.

41 § 4801B. Findings and purpose.

42 (a) It is the intent of the General Assembly that the Prescription Opioid Impact Fund be established under this

43 chapter to fund prevention and treatment of opioid addiction. In establishing the Prescription Opioid Impact Fund, the

44 General Assembly finds as follows:

45 (1) The Prescription Opioid Impact Fund is needed to prevent and respond to the dramatic increase in

46 opioid addiction in this State.

47 (2) The Prescription Opioid Impact Fund is needed to protect the public health, safety, and general

48 welfare of the citizens of this State.

49 (3) There is a direct connection to the number and strength of opioids prescribed to citizens of this State

50 and the rates of opioid addiction and overdose deaths.

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51 (4) Pharmaceutical manufacturers receive profit in exchange for the ability to sell their products in this

52 State.

53 (5) The Prescription Opioid Impact Fund will pay for a proportionate share of the cost of opioid substance

54 abuse treatment, prevention, and facilities needed to serve the population impacted by these pharmaceutical

55 products.

56 (6) By paying a proportionate share of the cost of opioid addiction treatment and prevention, the

57 pharmaceutical manufacturers receive assistance in promoting responsible product use and offset the negative

58 effect that these products have on Delaware residents.

59 (b) It is the intent of this chapter to ensure that adequate public funds are available to do all of the following:

60 (1) Prevent more individuals from becoming addicted to opioids.

61 (2) Provide funding for the Prescription Monitoring Program.

62 (3) Provide opioid addiction treatment to all Delawareans who have opioid addiction.

63 (4) Fund emergency medical assistance to treat opioid overdoses.

64 § 4802B. Definitions.

65 For purposes of this chapter:

66 (1) “Impact fee” means a payment of money imposed upon a pharmaceutical manufacturer, as a result of

67 selling a prescription opioid to an individual in Delaware, to pay for a proportionate share of the cost of preventing

68 and treating opioid addiction.

69 (2) “Morphine milligram equivalent” or “MME” means the conversion factor used to calculate the

70 strength of an opioid using morphine dosage as the comparative unit of measure.

71 (3) “Prescription opioid” means a drug that is a controlled substance under Chapter 47 of this title and

72 Title 21 of the Code of Federal Regulations and is either an opiate, derived from the opium poppy, or an opiate-

73 like synthetic drug. “Prescription opioid” does not include Buprenorphine.

74 (4) “Prescription Monitoring Program” or “PMP” means the program established under § 4798 of this

75 title.

76 (5) “Secretary” means the Secretary of the Department of Health and Social Services.

77 § 4803B. Prescription Opioid Impact Fund.

78 (a) A special fund to be known as the Prescription Opioid Impact Fund (“Fund”) is established and shall be

79 invested by the State Treasurer consistent with the investment policies established by the Cash Management Policy Board.

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80 The State Treasurer shall credit interest to the Fund on a monthly basis consistent with the rate established by the Cash

81 Management Policy Board.

82 (b) The following moneys must be deposited in the Fund:

83 (1) All impact fees collected by the State under to § 4804B of this title.

84 (2) All funds received by the State as the result of a civil action relating to opioids unless otherwise

85 specifically designated by a court order.

86 (3) Any other money appropriated or transferred to the account by the General Assembly.

87 (c) Money in the Fund may be used by the Secretary only to carry out the purposes of this chapter, including the

88 following activities:

89 (1) Opioid addiction prevention.

90 (2) Opioid addiction treatment including for the following:

91 a. Residential treatment programs and facilities.

92 b. Reimbursement of State Medicaid expenditures up to no more than 25% of the money annually

93 deposited into the Fund.

94 c. Services for the under insured and uninsured.

95 d. Emergency assistance, including purchasing Naloxone.

96 (3) Research regarding opioid addiction and treatment.

97 (4) Surveillance of prescription opioids, including no greater than 10% of the money annually deposited

98 into the Fund for administering the PMP.

99 (5) The costs of administering this chapter, up to no more than 10% of the money annually deposited into

100 the Fund, except as necessary for the Attorney General to bring an action in law to address a violation of this

101 chapter.

102 (d) The Behavioral Health Consortium, as established under § 5195 of this title, in consultation with the Addiction

103 Action Committee, as established under § 5198 of this title, shall make recommendations to the Secretary regarding the

104 expenditure of money in this Fund.

105 (e) Money appropriated by the General Assembly to implement this chapter must be reimbursed from money

106 received under this section.

107 § 4804B. Prescription Opioid Impact Fee.

108 (a) Manufacturers of prescription opioids dispensed in this State must pay a Prescription Opioid Impact Fee

109 (“Fee”) of $0.01 per MME dispensed.

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110 (b) The total amount of the Fee will be calculated quarterly using the information in the PMP.

111 (c) Manufacturers of prescription opioids dispensed in this State will be sent an invoice for the Fee due under this

112 section quarterly, beginning after the close of the first full quarter after [the effective date of this Act].

113 (d) Manufacturers of prescription opioids must pay the Fee 1 month after the date of an invoice.

114 (e) When a manufacturer of prescription opioids fails to pay the Fee within 1 month after the date of an invoice,

115 the penalty is $100 a day or 10 % of the Fee due, whichever is greater. In addition, any unpaid Fee bears interest at the rate

116 of 1% a month.

117 (f) No person may increase the retail price of a prescription opioid sold in this State to recover the cost of this Fee.

118 § 4805B. Enforcement.

119 (a) Except to the extent inconsistent with specific provisions of this chapter, the provisions of Chapter 5 of Title 30

120 shall govern the collection, review, and appeal of deficiencies of the Fee imposed by this chapter, and any interest and

121 penalties thereon, and claims for refund of overpayment of the Fee imposed by this chapter.

122 (b) The Attorney General may bring an action in law to enforce this chapter or to recover direct economic damages

123 resulting from a violation, or both. Any attorney fees recovered in an action to enforce this chapter must be remitted to the

124 Fund.

125 § 4806B. Policies and procedures.

126 The Secretary shall work with the Division of Professional Regulation and the Department of Finance to develop

127 necessary policies and procedures to implement this chapter.

128 § 4807B. Annual report.

129 Beginning November 1, 2019, the Secretary shall prepare and submit to the Governor and the General Assembly a

130 report on the income and specific expenditures under this chapter. This report must include all of the following:

131 (1) The amount of money collected in Prescription Opioid Impact Fees.

132 (2) The amount and recipient of each grant or State allocation from the Prescription Opioid Impact Fund.

133 (3) The amount by which agency budget requests for money from the General Fund is reduced by money

134 from the Prescription Opioid Impact Fund.

135 (4) To the extent possible, the report must include how many individuals were assisted by the

136 expenditures.

SYNOPSIS

Delaware leads the nation in the number of prescription opioids dispensed and drug overdose deaths. Prescription opioids lead directly to opioid addiction. The dramatic increase in opioid addiction has increased the need for money to pay for prevention and treatment of opioid addiction, including residential treatment, monitoring of prescriptions, Medicaid

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costs for opioid addiction treatment, providing naloxone to emergency responders, and a general shortage of all levels of treatment for opioid addiction.

This Act creates a Prescription Opioid Impact Fund funded by a Prescription Opioid Impact Fee ("Fee") that is paid by pharmaceutical manufacturers. The Fee will be assessed quarterly in the amount of $0.01 per MME, the morphine milligram equivalent. Assessing the Fee based upon the amount of MME in each dose of the manufacturer's opioid drugs that are dispensed directly correlates the fee to the impact that manufacturer has on the need for opioid addiction prevention and treatment in this State. The amount of the Fee is determined by data already entered into the Prescription Monitoring Program, which includes all prescription opioids dispensed to individuals by pharmacists. Because the Prescription Monitoring Program data does not include prescription opioids that are administered in hospitals, used to treat addiction, or are provided directly to patients by a hospice providers, those prescription opioids are not assessed the Fee. The Fee may not be passed along to consumers.

The Fees will go to a Prescription Opioid Impact Fund ("Fund") and will be used to pay for opioid addiction and treatment. The Secretary of the Department of Health and Social Services will allocate the money from the Fund after receiving recommendations from the Addiction Action Committee and the Behavioral Health Consortium. No more than 10% of the revenue in the Fund may be used to pay for the administrative costs of implementing this Act except if funds are necessary for the Attorney General to file an action to enforce this chapter. If the Fee is not paid, it is collected under the procedure in Chapter 5 of Title 31. The Secretary must submit a report to the Governor and General Assembly by November 1 of each year, in advance of the annual budget process.

Over the past 3 years, a $0.01 per MME Fee on prescription opioids dispensed in the State would have generated approximately $11 million in 2015; $10 million in 2016; and $9 million in 2017.

Author: Senator Hansen

1681490006 Page 1 of 2 Date: April 26, 2018

149th GENERAL ASSEMBLY

FISCAL NOTE

BILL: SENATE BILL NO. 176

SPONSOR: Senator Hansen

DESCRIPTION: AN ACT TO AMEND TITLE 16 OF THE DELAWARE CODE CREATING A PRESCRIPTION OPIOID IMPACT FUND.

Assumptions:

1. This Act becomes effective upon signature by the Governor.

2. This Act creates a Prescription Opioid Impact Fund (the Fund) funded by a Prescription Opioid

Impact Fee (the Fee) paid by pharmaceutical manufacturers.

3. The Fee will be assessed quarterly in the amount of $0.01 per morphine milligram equivalent

(MME) in each dose of the manufacturer’s opioid drugs dispensed in the State.

4. The quarterly amount of MMEs dispensed is determined by data entered into the Prescription

Monitoring Program, which includes all prescription opioids dispensed to individuals by pharmacists

in the State. The Prescription Monitoring Program data does not include prescription opioids

administered by hospitals to treat addiction. The Prescription Monitoring Program is currently

administered by the Department of State, Division of Professional Regulation.

5. Money in the Fund may be used by the Secretary of the Department of Health and Social Services

for opioid addiction prevention, treatment, and research. Additionally, up to 10% of the annual

amounts deposited into the Fund may be used for administration of the Prescription Monitoring

Program, and up to 10% of the annual amounts deposited into the Fund may be used for

administration, with allowance given for additional funds, if necessary, for the Attorney General to

address violations of this Act.

6. Quarterly invoices will be sent to pharmaceutical manufacturers after the close of the first full

quarter after the effective date of this Act. The costs associated with administration (billing

services) include $2,400 for mailing and supplies and $8,000 for contractual services (staff)

annually. Any administration costs incurred prior to collection of the Fee will be reimbursed by the

Fund when deposits are received.

7. According to data collected by the Prescription Monitoring Program, if the Fee had been applied in

calendar years 2015, 2016, and 2017, approximately $11 million, $10 million, and $9 million would

have been collected each year, respectively. Because this data shows a downward trend, which

will continue if prescription opioid use decreases, a 5% reduction is included in the fee collection

projection to account for this trend, as well as any lags or impediments that may occur in

collection.

1681490006 Page 2 of 2 Date: April 26, 2018

Cost:

Fiscal Year 2019: $10,400 (All costs will be reimbursed by the Fund upon fee collection)

Fiscal Year 2020: $0 (All costs will be paid by the Fund)

Fiscal Year 2021: $0 (All costs will be paid by the Fund)

Fee Collection:

Fiscal Year 2019: $8,550,000

Fiscal Year 2020: $8,122,500

Fiscal Year 2021: $7,716,375

Prepared by Ruth Ann Jones

Office of the Controller General

Issues Raised

Access

• Will drug prices increase?

• Some drugs may no longer be available in Delaware

Constitutional

Federal:

• Commerce Clause

• Need sufficient nexus with state

• Prohibiting price increase for consumers.

State:

• Is it an impact fee?

• Taxes must start in House

• Authority to spend the funds collected

Philosophical

• Shouldn’t tax medication

• Should have comprehensive approach to solving State revenue shortfalls, not piecemeal

• Those responsible should pay the costs for treatment & prevention

• Economic forecasting: relationship between fee and price of product.

• Tax name brand and generics at the same rate?

• Should rely on national class action for additional funds

Implementation

• Won’t know correct person and address to use to send invoice

• DHSS didn’t want to decide how money should be spent. Who decides? General Assembly, existing

stakeholder group, new governing body?

• DHSS wanted specific reporting requirements

• Might need to build computer infrastructure to implement

• Need appeal process

• Enforcement: out of state collections & prohibited price increase for consumers

Need to Address Crisis

• State also has costs in courts, prisons, foster care, insurance costs, lost employment, and the impact

on families and loss of life.

• Need more treatment beds and a full continuum of levels of service.

• Federal funds available – SAMHSA and Medicaid

• Pharmaceutical companies already addressing through foundation, disposal kits, donated naloxone,

have drugs in pipeline to treat pain and addiction, and will assist in identifying other sources of funding.

Senate Substitute No. 1 for Senate Bill No. 176: Creating a Prescription Opioid Impact Fund

What it does:

It creates a Prescription Opioid Impact Fund (“Fund”) through a prescription opioid impact fee (“Fee”) that is

assessed on manufacturers of prescription opioids as follows:

1. The fee is based on the total of the Morphine Milligram Equivalent (“MME”) in each manufacturer’s

products dispensed in Delaware, based upon data already reported to the Prescription Monitoring Program

(“PMP”).

2. The fee is assessed against manufacturers who exceed a threshold of 100,000 MMEs dispensed each

quarter.

3. The Fee is assessed as follows:

a. One penny per MME for a prescription opioid dispensed and reported in the PMP.

b. One-quarter of a penny per MME for a prescription opioid that is a generic.

With these changes, the anticipated revenue from the Fee is $3 million.

The money in the Fund must be spent on the following activities:

1. Opioid addiction prevention.

2. Opioid addiction services, including the following:

a. Inpatient and outpatient treatment programs and facilities, including short-term and long-term

residential treatment programs and sober living facilities.

b. Treating substance use disorder for the under-insured and uninsured.

c. Emergency assistance relating to prescription opioids, including purchasing Naloxone.

3. Research regarding opioid addiction and treatment.

4. Administrative costs of implementing the Fee and Fund, up to 15% of the amount in the Fund.

The Addiction Action Committee will award grants and contracts from the money in the Fund, based upon

priorities developed in consultation with the Behavioral Health Consortium. A standing subcommittee of the

Addiction Action Committee that does not contain any State employees will make the recommendations

regarding the awards of the grants and contracts.

The PMP data contains the mandatory reports by pharmacists of every prescription opioid dispensed in the

State. The PMP data does not include prescription opioids administered in hospitals, provided directly to

patients by hospice, or dispensed by veterinarians.

Key changes in the Substitute:

• Revises SB 176 to put the State on firm legal ground to defend a challenge to the Fee under the Commerce

Clause of the U.S. Constitution.

• Assesses a Fee on manufacturers of generic drugs that is lower than that on brand name drugs.

• Lowers the anticipated revenue from the Fee, but doing so significantly increases the legal defensibility of the

Act.

• Makes the Addiction Action Committee responsible for administering the Fund.

• Explicitly provides a mechanism and due process if a manufacturer wants to challenge the amount of the Fee

they are assessed.

• Removes the restriction on raising the retail price to consumers. This increases the defensibility of the Fee

without substantially increasing the price of prescription drugs to Delaware consumers, because pharmaceutical

prices are set nationally and the Fee assessed on generics is lowered by three-quarters.

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SPONSOR: Sen. Hansen & Sen. Henry & Rep. Keeley & Rep. HudsonSens. Ennis, McDowell, Poore, Sokola, Townsend, Walsh; Reps. Bennett, Hensley, Mitchell, Mulrooney, Paradee

DELAWARE STATE SENATE149th GENERAL ASSEMBLY

SENATE SUBSTITUTE NO. 1FOR

SENATE BILL NO. 176

AN ACT TO AMEND TITLE 16 OF THE DELAWARE CODE CREATING A PRESCRIPTION OPIOID IMPACT FUND.


1 WHEREAS, Delaware, like the rest of the United States, is in the midst of an opioid overdose epidemic; and

2 WHEREAS, in 2016, opioids killed more than 42,000 people and 40% of those deaths were from prescription

3 opioids; and

4 WHEREAS, in 2016, the number of opioid overdose deaths were 5 times higher than the number of opioid

5 overdose deaths in 1999; and

6 WHEREAS, the prescribing rates for prescription opioids among adolescents and young adults nearly doubled

7 from 1994 to 2007; and

8 WHEREAS, from 2015 to 2016, Delaware had the second highest increase in drug overdose deaths; and

9 WHEREAS, in 2016, 308 Delawareans died from drug overdoses; and

10 WHEREAS, since 2009, more people in Delaware have died from a drug overdose than from a motor vehicle

11 injury; and

12 WHEREAS, according to the Centers for Disease Control and Prevention’s 2017 Annual Surveillance Report of

13 Drug-Related Risks and Outcomes, Delaware’s prescription rate of high dose opioids and prescription rate of long-

14 acting/extended-release opioid pain relievers were both the highest in the nation; and

15 WHEREAS, in Delaware, opioids were prescribed at a rate of 870,046 prescriptions totaling 1,104,210,408

16 morphine milligram equivalents (“MME”) in 2015, 831,021 prescriptions totaling 1,050,799,858 MME in 2016, and

17 759,521 prescriptions totaling 925,238,704 MME in 2017; and

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18 WHEREAS, higher dosages of opioids are associated with a higher risk of overdose and death and higher dosages

19 have not been shown to reduce pain over the long term; and

20 WHEREAS, 4 in 5 new heroin users started out misusing prescription painkillers; and

21 WHEREAS, in 2016, 3% of Delaware’s eighth grade students reported using a prescription drug illegally; and

22 WHEREAS, nationally, Medicaid pays for 25% of the adults who receive residential treatment for opioid

23 addiction, while 10% of the adults who receive residential treatment are unemployed; and

24 WHEREAS, nationally, Medicaid pays for 37% of the adults who receive outpatient treatment for opioid

25 addiction, while 20% of the adults who receive outpatient treatment are unemployed; and

26 WHEREAS, buprenorphine, sold under the brand name Suboxone, is an opioid used to treat opioid addiction and

27 40% of the total buprenorphine spending in Delaware in 2016 was by Medicaid; and

28 WHEREAS, the Behavioral Health Consortium provides oversight of behavioral healthcare and substance use

29 treatment in Delaware and includes the Chair of the Addiction Action Committee, and the Addiction Action Committee

30 coordinates a comprehensive approach to the addiction epidemic in this State; and

31 WHEREAS, the Prescription Monitoring Program does not include prescription opioids that are administered in

32 hospitals, used to treat addiction, provided directly to patients by a hospice providers, or prescribed or dispensed by

33 veterinarians; and

34 WHEREAS, a 1 penny or 1/4 of a penny fee on the MME dispensed in this State will not substantially increase the

35 price of the prescription drug to Delaware consumers because pharmaceutical prices are set nationally; and

36 WHEREAS, the FY19 Governor’s Recommended Budget requests $100,000 for Substance Use Disorder Services

37 and Naloxone for First Responders, $328,500 for 20 additional Sober Living Beds, and $990,000 for Emergency Room

38 Consultations.

39 NOW, THEREFORE:

40 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Three-fifths of all

41 members elected to each house thereof concurring therein):

42 Section 1. Amend Part IV, Title 16 of the Delaware Code by making deletions as shown by strike through and


44 Chapter 48B. Prescription Opioid Impact Fund.

45 § 4801B. Findings and purpose.

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46 (a) It is the intent of the General Assembly that the Prescription Opioid Impact Fund be established under this

47 chapter to fund prevention and treatment of opioid addiction. In establishing the Prescription Opioid Impact Fund, the

48 General Assembly finds as follows:

49 (1) The Prescription Opioid Impact Fund is needed to prevent and respond to the dramatic increase in

50 opioid addiction in this State.

51 (2) The Prescription Opioid Impact Fund is needed to protect the public health, safety, and general

52 welfare of the citizens of this State.

53 (3) In the 3 years prior to the creation of the Prescription Opioid Impact Fund, prescription opioids were

54 dispensed to Delaware residents as follows:

55 a. In 2015, 870,046 prescriptions for 59,198,611 individual doses totaling 1,104,210,40 MMEs.

56 b. In 2016, 831,021 prescriptions for 56,502,249 individual doses totaling 1,050,799,858 MMEs.

57 c. In 2017, 759,521 prescriptions for 50,339,666 individual doses totaling 925,238,704 MMEs.

58 (4) There is a direct connection between the quantity and strength of opioids prescribed to citizens of this

59 State and the rates of opioid addiction and overdose deaths.

60 (5) There is a substantial nexus between the opioid manufacturers subject to the impact fee and the State

61 of Delaware, in part because only those manufacturers whose prescription opioids are dispensed in the State in

62 amounts sufficient to meet the quarterly threshold in § 4804B(b) of this chapter are subject to the impact fee.

63 (6) Opioid manufacturers receive revenues in connection with prescription opioids dispensed in in this

64 State.

65 (6) The Prescription Opioid Impact Fund will pay for a share of the cost incurred by the State of opioid

66 substance abuse treatment and prevention.

67 (8) The impact fee does not discriminate against interstate commerce, because both in-state and out-of-

68 state opioid manufacturers are equally subject to its provisions.

69 (9) The impact fee is fairly apportioned because it is based upon the volume of an opioid manufacturer’s

70 product dispensed within Delaware, with recognition of the fact that some manufacturers’ products have different

71 underlying costs and are sold at substantially different prices.

72 (10) By paying a share of the cost of opioid addiction treatment and prevention, the opioid manufacturers

73 receive assistance in promoting responsible product use and offset negative effect that these products have on

74 Delaware residents.

75 (b) It is the intent of this chapter to ensure that adequate public funds are available to do all of the following:

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76 (1) Prevent more individuals from becoming addicted to opioids.

77 (2) Provide funding to defray expenses incurred by the Prescription Monitoring Program under this

78 chapter.

79 (3) Provide opioid addiction treatment to all Delawareans who have opioid addiction.

80 (4) Fund emergency medical assistance to treat opioid overdoses.

81 § 4802B. Definitions.


83 (1) “Impact fee” means a payment of money imposed upon an opioid manufacturer, as a result of the

84 provisions of this chapter, to pay for a share of the cost of preventing and treating opioid addiction.

85 (2) “Generic substitution” means a drug that is the same active ingredient, equivalent in strength to the

86 strength written on the prescription, and is classified as being therapeutically equivalent to another drug in the

87 latest edition or supplement of the Federal Food and Drug Administration Approved Drug Products with

88 Therapeutic Equivalence Evaluations, sometimes referred to as the "Orange Book”.

89 (3) “Manufacturer of prescription opioids” or “opioid manufacturer” means a person who is engaged in

90 manufacturing, preparing, propagating, compounding, processing, packaging, repackaging, or labeling of a

91 prescription opioid drug, but does not include a person who is engaged in the preparation and dispensing of a drug

92 pursuant to a prescription.

93 (4) “Morphine milligram equivalent” or “MME” means the conversion factor used to calculate the

94 strength of an opioid using morphine dosage as the comparative unit of measure.

95 (5) “Prescription opioid” means a drug that is a controlled substance under Chapter 47 of this title and is

96 either an opiate, derived from the opium poppy, or an opiate-like synthetic drug. “Prescription opioid” does not

97 include buprenorphine.

98 (6) “Prescription Monitoring Program” or “PMP” means the program established under § 4798 of this

99 title.

100 (7) “Secretary” means the Secretary of the Department of State.

101 § 4803B. Prescription Opioid Impact Fund.

102 (a) A special fund known as the Prescription Opioid Impact Fund (“Fund”) is established and the State Treasurer

103 shall invest the Fund consistent with the investment policies established by the Cash Management Policy Board. The State

104 Treasurer shall credit interest to the Fund on a monthly basis consistent with the rate established by the Cash Management

105 Policy Board.

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106 (b) The following moneys must be deposited in the Fund:

107 (1) All impact fees collected by the State under to § 4804B of this title.

108 (2) All funds received by the State as the result of a civil action relating to opioids unless otherwise

109 specifically designated by a court order or written agreement arising from the civil action.

110 (3) Any other money appropriated or transferred to the Fund by the General Assembly.

111 (c) Money in the Fund must be used for activities in one or more of the following categories:

112 (1) Opioid addiction prevention.

113 (2) The following opioid addiction services:

114 a. Inpatient and outpatient treatment programs and facilities, including short-term and long-term

115 residential treatment programs and sober living facilities.

116 b. Services relating to treating substance use disorder for the under-insured and uninsured.

117 c. Emergency assistance relating to prescription opioids, including purchasing Naloxone.

118 (3) Research regarding opioid addiction and treatment.

119 (4) The cost of administering this chapter, as follows:

120 a. No more than 15% of the money annually deposited into the Fund may be used for administering

121 this chapter, including expenses incurred by the Prescription Monitoring Program under this chapter.

122 b. Entering into contracts to implement this chapter, including contracts entered into by the Secretary

123 for administration of this chapter.

124 c. Costs incurred by the Attorney General to bring an action to enforce this chapter shall be covered

125 by the Fund and are not subject to or included in the 15% cap on administrative expenses.

126 (d) Money in the Fund may not be used to supplant existing State funding.

127 (e)(1) The Addiction Action Committee (“AAC”), as established under § 5198 of this title, in consultation with

128 respect to priorities with the Behavioral Health Consortium, shall appropriate the money in this Fund by awarding grants

129 and entering into contracts.

130 (2) The ACC shall create a standing subcommittee to make recommendations regarding appropriations

131 under this section. A member of the standing subcommittee may not be an employee or officer of this State.

132 (3) Grants and contracts made pursuant to this section must be made exclusively by the AAC in

133 accordance with § 6982(b) of Title 29 or its successor provision.

134 (f) Money appropriated by the General Assembly to implement this chapter must be reimbursed from money

135 received under this section.

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136 § 4804B. Prescription opioid impact fee.

137 (a) A manufacturer of a prescription opioid must pay a prescription opioid impact fee to the State of Delaware if

138 more than 100,000 MME of the manufacturer’s prescription opioid products are dispensed in this State in a quarter.

139 (b) The prescription opioid impact fee is calculated as follows:

140 (1) The impact fee is $0.01 per MME for a prescription opioid dispensed and reported in the PMP.

141 (2) The impact fee is $0.0025 per MME for a prescription opioid that is a generic substitution.

142 (c) The Secretary shall calculate the total amount of the impact fee on a quarterly basis using the information in the

143 PMP.

144 (d) The Secretary shall send an invoice to manufacturers of prescription opioids dispensed in this State for the

145 impact fee due under this section quarterly, beginning after the close of the first full quarter after [the effective date of this

146 Act].

147 (e) Manufacturers of prescription opioids shall pay the impact fee 1 month after the date of an invoice.

148 (f) When a manufacturer of prescription opioids fails to pay the impact fee within 1 month after the date of an

149 invoice, the penalty is $100 a day or 10% of the impact fee due, whichever is greater. In addition, any unpaid impact fee

150 bears interest at the rate of 1% a month.

151 (g) A manufacturer who disputes the amount an invoice sent under this chapter may request a hearing under §

152 4736 of this title.

153 § 4805B. Enforcement.

154 The Attorney General may bring an action on behalf of the State to enforce this chapter. The Attorney General

155 may recover interest and reasonable attorney fees and expenses as a result of a successful action to enforce this chapter.

156 Any attorney fees recovered in an action to enforce this chapter must be remitted to the Fund.

157 § 4806B. Policies and procedures.

158 (a) The Secretary shall develop necessary policies and procedures and promulgate necessary regulations to

159 implement § 4804B of this title.

160 (b) The Secretary of the Department of Health and Social Services shall work with the AAC to develop necessary

161 policies and procedures and promulgate necessary regulations to implement § 4803B of this title.

162 § 4807B. Annual report.

163 Beginning November 1, 2019, the AAC shall prepare and submit to the Governor and the General Assembly a

164 report on the income and specific expenditures of the Fund.

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165 Section 2. Amend § 4798, Title 16 of the Delaware Code by making deletions as shown by strike through and


167 § 4798. The Delaware Prescription Monitoring Program.

168 (l ) The Office of Controlled Substances shall maintain procedures to ensure that the privacy and confidentiality of

169 patients and patient information collected, recorded, transmitted, and maintained is not disclosed, except as provided for in

170 this section.

171 (2) The Office of Controlled Substances may provide data in the prescription monitoring program in the

172 form of a report to the following persons:

173 n. The Addiction Action Committee, the Secretary of State, and the Attorney General for purposes of

174 administering and enforcing the Prescription Opioid Impact Fund under Chapter 48B of this title.

SYNOPSIS

This Act creates a Prescription Opioid Impact Fund (“Fund”) through a prescription opioid impact fee (“Fee”) that is assessed on manufacturers of prescription opioids as follows:

1. The fee is based on the total of the Morphine Milligram Equivalent (“MME”) in each manufacturer’s products dispensed in Delaware, based upon data already reported to the Prescription Monitoring Program (“PMP”). The PMP data contains the mandatory reports by pharmacists of every prescription opioid dispensed in the State. The PMP data does not include prescription opioids administered in hospitals, provided directly to patients by hospice, or dispensed by veterinarians.

2. The fee is assessed against manufacturers who exceed a threshold of MME dispensed each quarter.3. The Fee is assessed as follows:• One penny per MME for a prescription opioid dispensed and reported in the PMP.• One-quarter of a penny per MME for a prescription opioid that is a generic.

The money in the Prescription Opioid Impact Fund must be spent on the following activities:1. Opioid addiction prevention.2. The following opioid addiction services:• Inpatient and outpatient treatment programs and facilities, including short-term and long-term residential

treatment programs and sober living facilities.• Treating substance use disorder for the under-insured and uninsured.• Emergency assistance relating to prescription opioids, including purchasing Naloxone.3. Research regarding opioid addiction and treatment.4. Administrative costs of implementing the Fee and Fund, up to 15% of the amount in the Fund.

The Addiction Action Committee will award grants and contracts from the money in the Fund, based upon priorities developed in consultation with the Behavioral Health Consortium. A standing subcommittee of the Addiction Action Committee that does not contain any State employees will make the recommendations regarding the awards of the grants and contracts.

This Substitute Bill differs from Senate Bill No. 176 as follows:• Adds additional whereas clauses to further explain the background for the Fund and Fee.• Gives responsibility for the Fee to the Secretary of State instead of the Secretary of the Department of Health and

Social Services, because the PMP and the Controlled Substances Act are under the Secretary of State.• Removes the ability to use the funds from the Fee for Medicaid, and restricts appropriations to specifically-listed

activities.• Prohibits using the Fund to supplant existing State funding.• Permits a manufacturer to challenge an invoice for a prescription opioid impact fee through the existing appeal

process under the Controlled Substances Act.• Gives responsibility for appropriating funds from the Fund to the Addiction Action Committee.

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• Lowers the amount of the impact fee for generic drugs.• Establishes a minimum threshold before manufacturers are assessed the Fee.• Removes the restriction on raising prices to consumers because the Fee is unlikely to materially increase the

price of prescription drugs because those prices are set on a national basis.• Provides explicitly that the Attorney General may recover interest and reasonable attorney fees and costs in a

successful lawsuit to enforce this Act.• Clarifies that the Secretary of State develops the rules and regulations for implementing the Fee. And the

Addiction Action Committee, with the Secretary of the Department of Health and Social Services, develops the rules and regulations for implementing the Fund.

• Revises the reporting requirements on how money from the Fund is spent.• Provides clear permission to share the PMP data with the Addiction Action Committee, Secretary of State, and

Attorney General for the purposes of administering and enforcing this chapter.Author: Senator Hansen

1681490011 Page 1 of 2 Date: June 20, 2018

149th GENERAL ASSEMBLY

FEE IMPACT

BILL: SENATE SUBSTITUTE NO. 1 TO SENATE BILL NO. 176

SPONSOR: Senator Hansen

DESCRIPTION: AN ACT TO AMEND TITLE 16 OF THE DELAWARE CODE CREATING A PRESCRIPTION OPIOID IMPACT FUND.

In accordance with 29 Del. C. §913, the following information is provided relating to licenses and fees.

Description of the Legislation: This Act creates a Prescription Opioid Impact Fund (the Fund) funded by a Prescription Opioid Impact Fee (the Fee) paid by pharmaceutical manufacturers. The Fee will be assessed on manufacturers who have dispensed more than 100,000 morphine milligram equivalents (MME) in a quarter. The Fee will be assessed quarterly in the amount of $0.01 per MME on the manufacturer’s opioid drugs dispensed in the State. For generic substitution prescription opioids, the fee will be assessed at $0.0025 per MME. An estimated 85% of dispensed prescription opioids are generic substitutions. The quarterly amount of MMEs dispensed is determined by data entered into the Prescription Monitoring Program (PMP), which includes all prescription opioids dispensed to individuals by pharmacists in the State. The PMP data does not include prescription opioids administered by hospitals to treat addiction. The PMP is currently administered by the Department of State, Division of Professional Regulation.

Affected Entities: The Department of State, Division of Professional Regulation, pharmaceutical manufacturers, the Addiction Action Committee, the Attorney General, and the Department of Health and Social Services.

Fiscal Impact: According to data collected by the PMP, if the Fee had been applied in calendar years 2015, 2016, and 2017, approximately $4 million, $3.8 million, and $3.3 million would have been collected each year, respectively. Because this data shows a downward trend, which will continue if prescription opioid use decreases, a 5% annual reduction is included in the fee collection projection to account for this trend, as well as any lags or impediments that may occur in collection. The projected fee collection amounts are:

Fiscal Year 2019: $3,026,976

Fiscal Year 2020: $2,875,627

Fiscal Year 2021: $2,731,846

Quarterly invoices will be sent to pharmaceutical manufacturers after the close of the first full quarter after the effective date of this Act. The Department of State’s initial costs associated with administration (billing services) include $2,400 for mailing and supplies and $8,000 for contractual services (staff) annually. Administration costs will be paid by a 15% administrative allowance on the fund.

1681490011 Page 2 of 2 Date: June 20, 2018

Intended Use of Revenue:

Money in the Fund may be used for opioid addiction prevention, treatment, emergency assistance, including purchasing Naloxone, and research. The Addiction Action Committee, in consultation with the Behavioral Health Consortium, shall appropriate the money in the Fund. Additionally, up to 15% of the annual amounts deposited into the Fund may be used for administration, including expenses incurred by the PMP, with allowance given for additional funds, if necessary, for the Attorney General to address violations of this Act.

Prepared by Ruth Ann Jones

Office of the Controller General

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SPONSOR: Rep. Hudson & Sen. CloutierReps. Hensley, Ramone, D. Short, Wilson

HOUSE OF REPRESENTATIVES149th GENERAL ASSEMBLY

HOUSE BILL NO. 358

AN ACT TO AMEND TITLES 30 AND 16 OF THE DELAWARE CODE RELATING TO OPIOID TAX, OPIATE STEWARDSHIP FUND, OPIATE ADVISORY COUNCIL, AND OPIATE SETTLEMENT PROCEEDS.


1 Section 1. Amend Title 30 of the Delaware Code by making deletions as shown by strikethrough and insertions as

2 shown by underline as follows:

3 Subchapter 56. Opioid tax

4 § 5601. Definitions.


6 (1) “Covered entity” means any manufacturer, producer, importer, or distributor of a taxable active opioid.

7 (2) “Purchase price” means the total value of anything paid or delivered, or promised to be paid or delivered,

8 money or otherwise, in complete performance of a sale or purchase without any deduction on account of the cost or value

9 of the property sold, cost or value of transportation, cost or value of labor service, interest or discount paid or allowed after

10 the sale is consummated, any tax imposed by the State or any other expense.

11 (3) “Taxable active opioid” means any opiate or opioid having an addiction-forming or addiction-sustaining

12 liability similar to morphine or being capable of conversion into a drug having an addiction-forming or addiction-sustaining

13 liability. It does not include a prescription drug that is used exclusively for the treatment of opioid addiction as part of a

14 medically assisted treatment effort.

15 § 5602. Administration of opioid tax.

16 (a) A tax is imposed and assessed on the gross receipts from the sale of taxable active opioids, to be paid by a

17 covered entity, at the rate of 10% of the purchase price. The tax imposed by this section shall be charged against and paid

18 by the covered entity and shall not be added as a separate charge or line item on any sales slip, invoice, receipt, or other

19 statement or memorandum of the price given to the retail customer.

20 (b) The tax shall be imposed the first time a taxable active opioid is sold in this State and shall be collected and

21 remitted by the seller pursuant to this chapter.

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22 (c) The tax shall not be imposed on opioid products in the following circumstances:

23 (1) The product is exported for sale or use outside the State.

24 (2) The product is not subject to taxation by the State under any federal law.

25 (d) All taxes, interest, and penalties collected or received under this chapter shall be deposited with the State

26 Treasurer to be held in the Opiate Stewardship Fund.

27 § 5603. License requirements.

28 Any covered entity desiring to engage in the sale of taxable active opioids in this State shall first obtain a license

29 from the Department of Finance and pay therefor a fee of $80. Such license shall be valid until January 1 at which time it

30 may be renewed for a full year and every year thereafter, provided that the covered entity complies with the requirements of

31 § 5604 of this chapter and makes application therefor and payment of $80.

32 § 5604. Monthly report; collection of tax.

33 (a) A covered entity shall file with the Department of Finance, a monthly report on a form prepared by the

34 Department, which shall show the quantity of taxable active opioid products sold in the State, and such other information as

35 the Department may require.

36 (b) The report, together with any tax due under this chapter shall be returned by the twenty-fifth day of each

37 calendar month.

38 (c) The Department of Finance may require the filing of reports and the remittance of tax on a less frequent basis

39 at its discretion.

40 Section 2. Amend Title 16 of the Delaware Code by making deletions as shown by strikethrough and insertions as

41 shown by underline as follows:

42 Chapter 48B. Opiate Stewardship Fund and Advisory Council.

43 § 4801B. Opiate Stewardship Fund created.

44 The General Assembly, in order to provide funding to address the many issues created by opiate abuse, hereby

45 creates a special “Opiate Stewardship Fund”.

46 § 4802B. Source of funds.

47 (a) All taxes, interest, and penalties collected or received under § 5602 of Title 30 shall be deposited to the Opiate

48 Stewardship Fund.

49 (b) All settlement proceeds under § 4806B of this chapter shall be deposited to the Opiate Stewardship Fund.

50 § 4803B. Use of fund.

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51 (a) The State Treasurer shall have the power to invest the assets of the Opiate Stewardship Fund in a prudent

52 manner. Any profits, interest, and dividends from such investments shall remain in the Fund and become part of the

53 principal thereof.

54 (b) The funds in the Opiate Stewardship Fund shall be used only as authorized under this chapter.

55 § 4804B. Opiate Stewardship Advisory Council.

56 (a) The Opiate Stewardship Advisory Council is established to confront the opioid addiction and overdose

57 epidemic in this State and shall focus on:

58 (1) Emergency care and treatment resources relating to opioid overdose, including expanding access to

59 naloxone or similar medications as may be available;

60 (2) A continuum of care and counseling for opioid-related substance use disorders

61 (3) Prevention and education, including public education and awareness, prescriber education, and

62 development of sustainable opioid overdose prevention programs; and

63 (4) Services to ensure overdose prevention, public safety, community well-being, access to naloxone, or

64 similar medication as may be available, and providing social services to families affected by opioid overdose events.

65 (b) The Council shall:

66 (1) Review all local, state, and federal initiatives, programs, and activities related to education,

67 prevention, and services for individuals and families affected by opioid abuse;

68 (2) Ensure optimal allocation of available funding and alignment of existing state and federal funding to

69 achieve the greatest impact;

70 (3) Establish priorities and actions to address the State’s opioid epidemic for purposes of allocating funds

71 and resources;

72 (4) Develop criteria and procedures to be used in awarding grants and allocating available funds from the

73 Opiate Stewardship Fund; and

74 (5) Develop measurable outcomes to determine the effectiveness of the funds allocated under this

75 chapter.

76 (c) The Council shall determine how funds from the Opiate Stewardship Fund are used.

77 § 4805B. Opiate Stewardship Advisory Council membership.

78 (a) The Opiate Stewardship Advisory Council shall consist of the following 15 members, or a designee appointed

79 in writing and in advance of a particular scheduled meeting or on a permanent basis by the member serving by virtue of

80 position to serve at that member’s pleasure:

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81 (1) 2 members of the House of Representatives, 1 from the majority party appointed by the Speaker of

82 the House, and 1 from the minority party appointed by the Minority Leader;

83 (2) 2 members of the Senate, 1 from the majority party appointed by the President Pro Tempore, and 1

84 from the minority party appointed by the Minority Leader;

85 (3) 1 member appointed by the Board of Pharmacy;

86 (4) 1 member appointed by the President of the Delaware Board of Medical Licensure and Discipline

87 who is an emergency room physician;

88 (5) 1 member representing opioid treatment facilities appointed by the Governor;

89 (6) 1 member who is a paramedic appointed by the Governor;

90 (7) 1 member representing the Delaware Judiciary appointed by the Chief Justice of Delaware Supreme

91 Court;

92 (8) 1 member of the Delaware Police Chief’s Council appointed by the Governor;

93 (9) 1 public member who is a resident of Delaware and who has been impacted by the opioid epidemic

94 appointed by the Governor. This member shall be selected by the Governor and serve as Policy Advisor to the

95 Governor on behalf of the Advisory Council. This person shall also serve as Chair of the Advisory Council and

96 shall, upon appointment, become a full-time employee of the State entitled to such compensation and benefits as

97 determined in the annual budget act, provided, however, all such expense shall be paid from the funds collected in

98 the Opiate Stewardship Fund;

99 (10) 1 member appointed by AtTack Addiction;

100 (11) 1 member representing a manufacturer of opiates appointed by the Governor;

101 (12) the Secretary of the Department of Safety and Homeland Security; and

102 (13) the Secretary of Delaware Health and Social Services.

103 (b) The Chair must convene the Advisory Council at least quarterly, and may convene other meetings as deemed

104 necessary.

105 (c) Delaware Health and Social Services shall provide staff for administrative services for the Advisory Council

106 and Chair until such time as the annual budget act determines staffing and resources necessary to support the Advisory

107 Council and Chair.

108 (d) Except as determined in paragraph (a)(9) of this section, the members of the Advisory Council shall receive no

109 compensation but may be reimbursed for reasonable expenses.

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110 (e) All members shall serve until their replacement is appointed or they no longer hold the designated office

111 necessary to be a member of the Advisory Council.

112 § 4806B. Opioid Settlement Proceeds.

113 All funds resulting from the settlement of any civil legal matter relating to opioids, whether under a court order or

114 a negotiated settlement out of court, that resolves such matter on behalf of the State of Delaware shall be deposited with the

115 State Treasurer to be held in the Opiate Stewardship Fund unless otherwise specifically designated in a court order.

116 Section 3. This Act shall take effect 180 days after its enactment into law.

SYNOPSIS

In 2016, according to the Division of Forensic Science, 308 people died from overdoses in Delaware. To address the devastating effects that the opioid epidemic has had on the citizens and families of the state of Delaware, this Act will:

1.) Impose a tax on the first sale of opioids in the State at a rate of 10% of the purchase price. Revenue generated from the tax will be used to support opioid addiction treatment options in Delaware, including residential programs, as well as to educate the public on the dangers of opioid addiction and available treatment options in Delaware;

2.) Direct civil legal settlement proceeds resulting from matters related to opioids be deposited to the Opiate Stewardship Fund;

3.) Authorize the Governor to appoint and fund the position of the newly-created Policy Advisor. The full-time Policy Advisor will serve at the pleasure of the Governor and will be tasked with addressing only opioid addiction-related matters; and

4.) Establish the Opiate Stewardship Advisory Council. The council will be charged with prioritizing where revenue generated from the opioid tax is best spent in order to assist those who are addicted, as well as their families. This council – building on the progress made by the Behavioral Health Consortium and other related medical and state agency committees – will be a separate entity that is responsible solely for advising in the treatment-related tasks of the newly-created Policy Advisor.

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