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Tuesday, the Massachusetts Fiscal Alliance sharply criticized Governor Maura Healey’s hidden tax on prescription drugs under the guise of a "pharmacy assessment," which was inconspicuously slipped into her fiscal 2026 budget proposal. The tax, which resurrects a policy from two decades ago, would charge pharmacies up to $2 per prescription, with the funds funneled into the state’s struggling MassHealth program—a system now burdened by new costs associated with the state’s migrant crisis.
“This proposal is a prescription for disaster. It’s a hidden tax that will ultimately be passed on to consumers, raising healthcare costs at a time when families, seniors, and small businesses can least afford it. Governor Healey is asking Massachusetts residents to foot the bill for a broken MassHealth system that is drowning in expenses, largely due to her administration’s inability to address the migrant crisis,” said Paul Diego Craney, Executive Director of the Massachusetts Fiscal Alliance.
The “pharmacy assessment,” buried in Section 78 of Healey’s budget, imposes either a 6% fee on pharmacy revenues or $2 per prescription—whichever is lower. The administration claims that the tax will not impact patients directly, but MassFiscal asserted this notion is misleading, since consumers or their insurors ultimately provide the revenue stream for such businesses.
“This is a tax, plain and simple, no matter what spin the administration puts on it. Pharmacies will have no choice but to pass these costs along to consumers. For most people in Massachusetts, this will mean higher out-of-pocket costs for essential medications,” said Craney.
This is not the first time Massachusetts has attempted such a tax. A similar “pharmacy assessment” was struck down by a Superior Court judge in 2003, who called it an illegal excise tax. Then-Governor Mitt Romney later vetoed an attempt to revive it, citing its disproportionate impact on seniors and those on fixed incomes.
“Governor Healey is recycling bad policy from two decades ago. It didn’t work then, and it won’t work now. The people of Massachusetts deserve better than to have their healthcare costs hiked to pay for a problem the administration refuses to fix,” noted Craney.
According to the Healey administration, the tax is expected to generate up to $145 million annually to prop up MassHealth and prevent pharmacy closures in low-income areas. However, MassFiscal noted that the governor’s approach avoids tackling the root causes of MassHealth’s unsustainable spending growth.
