Rep. Davis bill will close pharma warehouse distributor tax loophole, fund addiction recovery

Rep. Lauren Davis, D-32

Olympia—With over half of the House Democrats as co-sponsors, (including Rep. Pollet and Rep. Valdez) Rep. Lauren Davis (D-32) introduced new legislation on Monday to fund addiction pre-treatment and recovery support services by closing the pharmaceutical warehouse distributor tax loophole.

Substance use disorder services occur along a continuum of care that includes three distinct and equally important parts: pre-treatment, treatment, and recovery support. 

Pre-treatment services and recovery support services are critical to engaging individuals in substance use disorder treatment and helping them remain in recovery after treatment completion.

However, since neither pre-treatment nor recovery support services are insurance billable, there is little to no funding for them.

“We send people to treatment over and over but fail to help them stay in recovery by not funding critical recovery support services like housing, employment and education support, and recovery coaching,” said Davis.

Pre-treatment services are especially effective at engaging individuals experiencing homelessness.

“These services meet individuals in active addiction where they are, including in homeless encampments, jails, and hospital emergency rooms to build trust, engender hope, and encourage these individuals to seek help and healing,” Davis explained.

“Pharmaceutical warehouse distributors have played a significant role in the opioid epidemic by serving as purveyors of large quantities of opioids to pharmacies across the state, so it only makes sense to ask them to play an equal role in recovery,” she continued.

Currently, pharmaceutical warehouse distributors enjoy a lower business and occupation manufacturing tax than Boeing. The business case that led to the creation of their tax preference was remedied by the legislature five years ago, but the tax break remains on the books.

Closing the loophole will raise about $20 million per year.

Rep. Lauren Davis, D-Shoreline (32nd Legislative District), represents part of King and Snohomish Counties, including Lynnwood, Mountlake Terrace, Shoreline and part of Edmonds.