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CEO DATELINE – Drug distributors group sues to block N.Y. opioid law

July 12, 2018
By Walt Williams

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The Healthcare Distribution Alliance has sued New York State to block implementation of a new law requiring drug companies to pay into a state fund used to combat opioid abuse and addiction.

New York’s Opioid Stewardship Act imposes an annual $100 million surcharge on manufacturers and distributors of opioid medications through 2024, with the money used to help cover the costs of prevention, treatment and recovery programs, according to the (Albany, N.Y.) Times Union.

Drug makers and distributors have been blamed by public health advocates for creating the current opioid crisis by knowingly flooding regions of the country with their products and turning a blind eye to shady pharmacies. The industry denies the allegations.

The New York law is the first in the nation and was touted by supporters as a compromise as Gov. Andrew Cuomo had originally proposed a per-pill tax on opioids to raise money for addiction treatment. At least a dozen other states are considering similar taxes. However, HDA said the law “imposes an unconstitutional $600 million punitive surcharge on pharmaceutical distributors and manufacturers.”

“It bypasses judicial due process and impedes the industry’s comprehensive efforts to mitigate opioid abuse and misuse,” the association said in a statement.

HDA represents drug distributors. The group said distributors “have no role in clinical decisions, nor do they manufacture, prescribe, or dispense opioids to patients. In part because it ignores those facts, the act is flatly unconstitutional.”

The lawsuit was filed in U.S. District Court for the Southern District of New York.