ICYMI: Real state budget battle about to begin

KEY POINT: "The Senate would give the state’s Health Policy Commission authority to demand information from drug companies that have failed to reach a negotiated price with the state secretary of health and human services...This provision has teeth — unlike the House version which was redrafted at the behest of MassBio, the chief lobbying group for the industry here."

The state budget is where the rubber meets the road of governing. And this week the real give and take begins between House and Senate budget negotiators not over mere dollars and cents — $42.8 billion is the bottom line in both versions — but about the policies that each branch has defined as critical in the year ahead.

Behind closed doors six legislators will exercise their powers to craft new laws, impose new taxes, and generally set the parameters for how much progress this state will make in the year ahead in such critical issues as education and health care.

Oh sure, at the end of the process the budget for the year that begins July 1 will go back to the full House and Senate for a final vote. But make no mistake, this is where the big decisions are being made. This is the proverbial sausage factory — a boutique operation, but one with the power to impact millions of lives.

Amid the thousands of budget line items and dozens of so-called outside sections — budget riders on policy issues — some stand out as being as critically important as they are contentious.

Prescription drug policies: Here we would urge the Senate side to stick to its well-crafted effort to rein in the prices of a relative handful of high-end drugs that threaten to drive up the cost of the state’s Medicaid program, which already consumes about 40 percent of the entire state budget.

The Senate would give the state’s Health Policy Commission authority to demand information from drug companies that have failed to reach a negotiated price with the state secretary of health and human services.

“If after review of records or documents the commission determines that a drug manufacturer’s pricing of a drug may be unreasonable or excessive, the commission shall hold a public hearing,” the Senate language says. Manufacturers would be required to appear, testify under oath and would face penalties for knowingly obstructing the commission’s efforts. Ultimately the case could be referred to the attorney general under the state’s consumer protection law. Net savings to the state are estimated at $28 million.

In other words, this provision has teeth — unlike the House version which was redrafted at the behest of MassBio, the chief lobbying group for the industry here.

Massachusetts is already far behind in drug regulatory and disclosure efforts long underway in neighboring Connecticut, Vermont and New York. To do nothing this year is to fall even farther behind.

New excise taxes: Here again the Senate budget tackles two critical issues the House choose to ignore. The Senate would impose a 75 percent excise tax on vaping materials — or as the budget calls them “electronic nicotine delivery systems.” This isn’t simply a revenue raiser, although it would raise an estimated $24 million a year. The real need is to make the product more expensive to an increasingly youthful cohort of vapers attracted by its bargain price and its flavored products (an aspect of the problem not tackled in the Senate budget).

The Senate also included a 15 percent excise tax on the gross receipts from sales of prescription opioids, the revenue from which — estimated at $14 million a year — would go into the state’s Substance Use Disorder Prevention and Treatment Fund.

UMass tuition freeze: Both the House and the Senate have agreed on the bottom line appropriation for the five-campus University of Massachusetts system. The Senate, however, frustrated with the university system’s regular tuition hikes, opted for the blunt instrument of a one-year freeze on undergraduate tuition and fees.

UMass President Marty Meehan argues that will lead to cuts in the short term and cost more in the long run. What might be a logical alternative is a suggestion in a recent Pioneer Institutereport on university spending — an audit of capital and operating budgets by the state comptroller’s office. After all, where’s the harm in that?

The budget dollars of line items are relatively easy to negotiate — splitting the difference has always been a tried and true tool. Policy issues represent a higher degree of difficulty, but in the cases mentioned above are clearly worth the effort — and the fight.
 

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