January 23, 2019

Baker budget proposes opioid tax for services

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Gov. Charlie Baker's proposed budget includes $266 million for treatment and other services, a $48 million increase over this year.

Gov. Charlie Baker filed a $42.7 billion budget on Thursday that proposes new taxes on pharmaceutical manufacturers to help pay for opioid addiction services.

The budget overall would increase spending by 1.5 percent over the current fiscal year, according to the administration, and includes $133 million in new revenue from anticipated recreational marijuana sales and $6 million from an expansion of the cigarette excise tax to e-cigarettes and vapor products.

After working in his first term to pass two significant bills to fight back against the opioid addiction epidemic, Baker's budget includes $266 million for treatment and other services, a $48 million increase over this year.

To help pay for that investment, the governor is proposing a 15 percent tax on opioid manufacturers on gross receipts from the sale of opioid products.

The governor also wants to give MassHealth, which would see its total budget grow to $16.54 billion in fiscal 2020, the ability to negotiate directly with drug manufacturers over price, and use a public rate-setting process for the high-cost prescription drugs similar to how rates for other Medicaid services are set.

The reforms, the administration estimates, will help save $80 million. In cases where drug manufacturers do not offer rebates to meet the regulated prices, they could be referred to the Health Policy Commission for possible public hearings, disclosure requirements or referral to the attorney general for action under the consumer protection law.

The governor's budget filing is the first step in a months-long process designed to culminate over the summer in a new annual spending plan for the fiscal year that starts on July 1.

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