FDAnews Drug Daily Bulletin
Pharmaceuticals / Regulatory Affairs

Judge Finds New York Opioid Tax Unconstitutional

Dec. 28, 2018

A federal judge has issued a preliminary injunction against a New York state law that imposed surcharges on opioid manufacturers and distributors.

The Opioid Stewardship Act, implemented in July, set up a $100 million fund to be paid by companies selling and distributing opioids in the state. Each company’s contribution was to be calculated based on the number of containers sold or distributed in the previous year and the total number of morphine milligram equivalents they sold or distributed over the same period.

In the following months, several companies and industry groups sued over the measure. A July lawsuit by the Healthcare Distribution Alliance claimed the law unjustly singles out only two kinds of actors for a crisis that involved numerous others. A September lawsuit from the Association for Accessible Medicines claimed that the law would disproportionately hurt generics manufacturers because generics comprise 90 percent of the volume of prescriptions dispensed but less than a quarter of spending, and the law levies its taxes based on sales volume rather than revenues.

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