New York’s Mayor Bill de Blasio plans to allow the city’s biggest pharmacy benefit manager to sell its own drugs without the state’s help.
The move is one of the biggest in the nation, given the state and federal governments are now paying for more than half of the cost of the new drug-maker’s drug line.
The tax break, which Pfizer paid for under a provision in state law, was the first of its kind in the country and will save the city about $30.5 million over the next two years.
The New York Times reported that Pfizer had spent more than $1 billion on the drug line, and the state Department of Health is forecasting that the tax break will bring in another $1.2 billion over the decade.
De Blasio, who was elected to a second term in November, announced the tax plan on Wednesday, adding that it would not apply to all drugs that are sold in New York.
“This is a big win for New Yorkers and all New Yorkers, and we are pleased to have the city of New York join the other state governments in working to bring down health care costs and improve quality of life for New York residents,” Pfizer CEO Joseph Safra said in a statement.
“This will give Pfizer an opportunity to help save lives and promote the use of new and innovative medicines for cancer, heart disease and other illnesses.”
The move comes as Pfizer is under investigation by the New York State Attorney General for failing to properly report how many of its cancer drugs are prescribed in the state.
Pfizer has said the probe is about the cost-sharing reimbursement it pays to health insurers.
New York Governor Andrew Cuomo has defended the tax breaks as important to keeping people healthy.
“They’re really, really important,” Cuomo said in March, according to Bloomberg.
“They help people keep their health insurance.
If you don’t have health insurance, if you don.t have health care, if there are no options available to you, if your health insurance doesn’t cover cancer treatments, that’s really not a good situation.”
The new tax break also has been criticized by some lawmakers in New Jersey, where one Republican lawmaker said it would allow the state to keep selling Pfizer’s cancer drug, Luminal.
Lumino’s maker, AstraZeneca, said in February that the state would lose $2.8 billion in tax revenue, and New Jersey Gov.
Chris Christie has called the tax package “an attack on the state of New Jersey.”