BOSTON — Senate budget-writers have given a green light to Gov. Charlie Baker’s plan to tax opioid manufacturers to help pay for coverage of substance abuse treatment.
The Senate rolled out its version of the 2020 state budget on Tuesday. The more than $42.7 billion plan for the fiscal year that begins July 1 increases aid for cities, towns and schools; boosts funds for regional transportation, mental health programs, education and charter school reimbursements to school districts; and doesn’t raise sales or income taxes.
The proposal also includes Baker’s plan to impose a 15% tax on overall sales of opioid makers, such as Purdue Pharma. The tax, which is expected to raise $14 million a year, would help pay for more beds in treatment centers, recovery and prevention programs.
It wouldn't apply to opioid distributors, and inpatient treatment and medication-assisted treatment would be exempt from the new levy.
The opioid epidemic has its roots in prescription drugs. Many who became addicted to painkillers such as Oxycontin turned to heroin bought on the street once their prescriptions ran out. More recently, the emergence of the deadly synthetic opioid fentanyl, added to heroin and other drugs, fueled a spike in overdose deaths.
In 2018, an estimated 2,000 people died of opioid overdoses in Massachusetts, according to the state Department of Public Health.
Substance abuse experts say taxing opioid makers will punish an industry that many blame for a wave of addiction, while raising money for treatment and prevention.
"The pharmaceutical industry lied about the opioid epidemic, contributing to the deaths of tens of thousands of people and costing the country billions of dollars a year in long-term treatment," said John Rosenthal, co-chairman of the Newton-based Police Assisted Addiction and Recovery Initiative, a nonprofit that helps people get into drug treatment.
"They should pay for it, and this tax is a start," he added.
States, counties and cities have filed more than 1,000 opioid-related lawsuits against pharmaceutical companies in state and federal courts in recent years.
There are active investigations into the crisis by attorneys general nationwide, including several initiated by Massachusetts Attorney General Maura Healey.
Last week, a federal grand jury in Boston indicted Insys Therapeutics Inc. founder John N. Kapoor and several of the company's executives on racketeering and conspiracy charges, accusing them of bribing physicians to prescribe Subsys, a highly-addictive fentanyl spray, according to U.S. Attorney for Massachusetts Andrew Lelling's office.
"It is beyond time that big pharma contribute more financially to help communities harmed by opioid addiction," said Sen. Diana DiZoglio, D-Methuen, who supports the tax proposal.
Sen. Barry Finegold, D-Andover, a member of the Senate Ways and Means Committee that produced the budget, also backs the tax on opioids.
"Somebody has to pay for the treatment of opioid addiction," he said. "It's a common-sense solution to make those who are producing these drugs pay for the costs to society."
Baker originally asked for the 15% tax as part of his state budget request in January, saying it would force opioid makers to "help pay for some of the carnage they have created."
House Minority Leader Brad Jones, D-North Reading, filed amendments to restore the opioid tax and a tax on electronic cigarettes and vaping products, which Baker also supported. But the proposals were not included in a spending plan approved last week by the Democratic-controlled House.
Overall, the Senate's budget proposal calls for $770 million in tax revenue in the coming fiscal year, including an estimated $42 million from lowering the threshold for out-of-state businesses to collect and pay the state’s 6.25% sales tax.
Sen. Michael J. Rodrigues, D-Westport, chairman of the Senate Ways and Means Committee, said budget-writers didn't agree with all of Baker's proposed tax and fee increases, such as his plan to hike the real estate transfer tax to pay for climate change resiliency and adaptation programs.
"We think there are adequate revenues in the state's coffers, without raising new revenues, to fully fund the state's priorities," Rodrigues told reporters at a briefing Tuesday.
House Speaker Robert DeLeo, D-Winthrop, has said he doesn't want to consider taxes until later in the legislative session, when lawmakers could take up proposals to increase revenue for transportation, education and other needs.
Taxing opioid manufacturers isn’t a new idea. Bills have been introduced as far back as 2015 in at least 15 states to impose taxes or fees. None of them have passed.
Even if the proposal makes it into the final spending plan, it is likely to face a legal challenge from pharmaceutical firms who say the move would result in higher prices for consumers.
New York Gov. Andrew Cuomo proposed a 2-cents-per-milligram tax on opioids as part of a budget last January, arguing that it would offset the cost of dealing with a drug crisis that's widespread throughout his state. The tax sought to raise $600 million from opioid makers and distributors to help pay for drug treatment.
Drug companies sued to block the New York tax, and a federal judge in December struck it down, saying it violated interstate commerce protections in the U.S. Constitution.
Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at firstname.lastname@example.org.