Addressing a room of bioscience executives and state officials, Gov. Ned Lamont said Monday he believes the industry is “invaluable to the future of the state,” and he will propose boosting the research and development tax credit to 90%.
He also asked for the executives’ help in getting prescription drug prices under control.
Lamont was the keynote speaker for the 2025 legislative breakfast presented by BioCT, a nonprofit that supports and serves as the voice for the state’s bioscience industry. The event was hosted by Alexion Pharmaceuticals at 100 College St., in New Haven, and attracted about 200 people.
He told the gathering he is a strong supporter of the bioscience industry.
“I think about each and every one of you, the BioCT and the life sciences, a place where we have an enormous strategic advantage, a lot of growth, a lot of momentum,” he said, “and we’re trying to do everything we can to keep that momentum going.”
He added that the people of Connecticut “want you to stay, want you to grow and want you to expand right here.”
To help with that, he said he “heard loud and clear” from the bioscience caucus that the state was not competitive with its neighbors when it comes to the research and development tax credit, which is currently capped at 65%.
“In terms of the R&D tax credit, we’ve worked to be competitive. So our budget proposal takes that R&D tax credit up to … 90%. It makes us much more competitive.”
Connecticut offers a broadly available credit based on nonincremental R&D spending. It also offers an incremental credit that qualifying businesses can take instead of the nonincremental credit. The state allows corporations to use either of its R&D credits to reduce up to 65% of their corporation business tax liability.
Department of Economic Community Development Commissioner Dan 0’Keefe, who spoke later in the morning, said the tax credit change was a direct result of last year’s BioCT legislative breakfast.
“There was a question from the audience who asked, ‘why haven’t we done that?’” O’Keefe said. “My background is in tech investing. I had no idea we weren’t competitive with Massachusetts.”
Members of the state legislature’s bioscience caucus spoke on the final panel of the event. Sen. Christine Cohen (D-Guilford) said that while the governor’s R&D tax credit proposal is not a done deal, the caucus will advocate for it during the current legislative session.
In his keynote, Lamont also stressed that he needs the help of the executives in the room “when it comes to health care and healthcare costs and pharmaceutical costs.” He then modified the famous quote from President John F. Kennedy, stating that it’s “not what your state could do for you, but what you can do for your state.”
According to Lamont, healthcare costs, and especially state employee and retiree healthcare costs, are rising. “Most of that is related to hospitalizations, which have gone through the roof, and our Medicaid costs are going up by double digits,” he said.
He also said he’s worried about changes coming from the new administration in Washington D.C., saying he expects to see healthcare costs, including Medicaid costs, shifted from the federal government to the states.
“DOGE is the Department of Government Efficiency,” he said. “I call it DOCS — the Department of Cost Shifting,” he said.
Even without that change, pharmaceutical costs have risen dramatically, Lamont said.
“I need your help, in particular when it comes to pharmaceutical costs,” he said. “That’s gone from about 10% of our health care spend to 20% of our health care spend, just in the last five years plus. Tell us how we should manage that.”
Lamont added that the state needs “to get a handle on that, especially when I look at the generic drugs coming down.” He said that, while it’s important to make sure “that you guys get a good rate of return on the incredible investments you’re making,” it’s also important to “look out for the taxpayers long-term as well.”
He ended on a positive note, telling the executives that “you guys are invaluable for the future of the state, and really what makes our country special. … We’re part of a broader ecosystem, but you’re in the hearts of all of that we’re doing. I’m trying to be your partner, every day.”
During a panel discussion following the governor’s address, Robert Popovian, a senior health policy fellow with the Progressive Policy Institute and a senior visiting fellow with the Pioneer Institute in Boston, said pharmacy benefit managers (PBMs) are a major reason for the increases in prescription drug costs.
PBMs manage prescription drug benefits for clients that include large employers, health insurers and others.
“The best way to look at drug pricing is to go back and look at what percentage of that price, of that brand name price, goes back to somebody in the middle of the market, the middleman,” Popovian said. “Over 50% of that goes to the middleman, which provides very little value to the system. And unless pharma companies start talking about this more transparently and openly, they’re going to have a problem long term about justifying their prices, and they’re going to have issues about who is going to study the pricing.”
