Judge Blocks $600M Charge for NY Opioid Crisis

MANHATTAN (CN) – A federal judge ruled Wednesday that the laudable aims to curb New York’s opioid crisis are not enough to make pharmaceutical manufacturers pay $600 million toward the cost of treating drug abusers.

“New York State— like the rest of our nation — is in the grips of an opioid epidemic,” U.S. District Judge Katherine Polk Failla wrote at the start of her 52-page opinion. “To counter that epidemic, New York has taken proactive measures to treat existing opioid addiction, to prevent future addiction, and to educate New Yorkers about the dangers of opioid dependence.”

Despite finding the goals of the so-called Opioid Stewardship Act (OSA) “commendable,” Failla added: “The court cannot permit New York to achieve these goals through unconstitutional means.”

“In other words, New York’s interest in the public health of its residents cannot trump the Commerce Clause,” she wrote. “Additionally, the perhaps-unforeseen consequence that the OSA could well reduce the availability of opioid medications for those who need them also runs counter to the public interest.”

The Healthcare Distribution Alliance, an Arlington, Virginia-based trade group that brought the lawsuit shortly after the OSA took effect in July, accused New York of conducting a “trial by legislature,” sidestepping other pending lawsuits against the pharmaceutical industry.

A month before signing the law, Governor Andrew Cuomo had proposed a 2-cents-per-milligram tax on all opioids in New York as part of his March 2018 budget proposal. The stewardship was set up in its place after Senate Republicans pushed back against a tax.

Cuomo was not named in the lawsuit, which sued the state’s Commissioner of Health Howard Zucker and Attorney General Barbara Underwood, who did not immediately respond to a request for comment. In an emailed statement, Department of Health spokesperson Jill Montag said, "The Department of Health is reviewing this decision and considering all our options. New York State continues to take all steps necessary to fight the opioid epidemic."

Two related lawsuits followed by the Association for Accessible Medicines (AAM) and SpecGx LLC, which challenged a provision of the law forbidding manufacturers from passing the costs of the legislation onto consumers.

“Here, AAM and SpecGx have presented credible evidence that the OSA, and in particular its pass-through prohibition, will cause them to alter dramatically, if not eliminate altogether, their sales of opioid medications in New York,” Failla wrote. “Such wholesale restructuring, undertaken in response to credible threats of million-dollar penalties, suffices to demonstrate irreparable harm.”

The Healthcare Distribution Alliance’s attorney John Calandra also did not reply to an email seeking comment.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit